Account Management Policy
Last published 01 Nov 2018
Generally, all tenants living in a property owned or managed by the Department of Communities and Justice (DCJ) are required to pay tenancy charges. Tenancy charges include rent, water usage, rental bond, repairs, miscellaneous debts and combined former debt.
DCJ establishes a separate account for each tenancy charge, so there is an account for rent, an account for water usage and an account for each other tenancy charge. DCJ will manage these accounts throughout the tenancy by placing charges on these accounts when they become due, for example, a weekly rent charge, and ensuring tenants meet their obligation to pay those charges.
When a tenant moves out of a property, DCJ will calculate all charges and payments relating to the property. Any credit or debit amounts remaining are known as vacated accounts.
The intent of this policy is to explain how DCJ manages tenancy accounts. The Tenancy Charges and Account Management Policy Supplement provides further information to support this document.
This policy applies to tenants and former tenants who are living, or who have lived, in a property owned or managed by DCJ, including tenants of the Aboriginal Housing Office.
3. Policy statement
DCJ is able to apply and recover tenancy related charges in accordance with the provisions of the Residential Tenancies Act 2010 and the Housing Act 2001.
Tenants have a legal obligation to pay their tenancy charges as they become due. If tenants do not make payments, their accounts will fall into arrears. This will result in a breach of their tenancy agreement.
Tenants must notify DCJ immediately if they are unable to make payments. DCJ will work with tenants to ensure they meet their obligation to pay their tenancy charges. However, DCJ will take eviction action when there are major or persistent arrears.
Former tenants must pay all money owing on vacated accounts. DCJ may decide to refer vacated accounts to a mercantile agent for collection, or pursue legal action if former tenants do not make payments. DCJ will refund any credit amounts.
Advising current tenants of arrears on their tenancy accounts
DCJ will always contact tenants in writing or via electronic means if their accounts fall into arrears. Additionally, DCJ may also contact tenants by phone, or by visiting them in their homes. DCJ will act quickly to ensure that tenants pay their tenancy charges on time, and to help prevent the debt from escalating.
Managing current accounts in arrears
Whenever a tenant's account goes into arrears, DCJ will work with the tenant to try to resolve the problem. When deciding how to respond to a tenant's account being in arrears, DCJ will consider the following factors:
- The tenant's payment patterns.
- The amount of time the tenant has been in arrears and the arrears amount.
- The reason the tenant is in arrears.
- The tenant's capacity and willingness to repay the arrears.
- The need for involvement of support services.
- Previous arrears patterns, including the steps that have been taken to resolve the problem.
Consideration of these factors will assist DCJ to determine when to:
- negotiate a repayment arrangement
- apply for a Specific Performance Order
- issue a Notice of Termination
- apply for an order of Termination and Possession.
Both before and after taking any of the above actions, DCJ will continue working with the tenant to try to resolve the problem.
DCJ reserves its right to issue a Notice of Termination in accordance with the Residential Tenancies Act 2010 if there have been breaches of the residential tenancy agreement.
Referrals to support services
Where appropriate, DCJ may refer tenants to various financial and other support services to assist them in managing their arrears.
If a tenant goes into arrears, DCJ will negotiate a reasonable repayment arrangement with the tenant. A debt can be repaid whether in full or by instalments. DCJ expects the tenant to make a commitment to repay all debts, including those from a previous tenancy, and to repay them within a reasonable timeframe.
Where a tenant advises DCJ of financial or other difficulties that affect their ability to afford the proposed repayment amount, they will need to supply evidence of their financial position. Upon the presentation of such evidence, DCJ may consider a lesser payment arrangement. For more information on the type of evidence to supply, go to Evidence requirements when making decisions about managing accounts.
Where DCJ is unable to negotiate a reasonable repayment arrangement, it will escalate the arrears recovery process. Depending on the circumstances, DCJ may apply to the NSW Civil and Administrative Tribunal for a Specific Performance Order, or an order to terminate the tenancy.
Tenants who are required to pay a rental bond
Where a tenant is required to pay a rental bond DCJ will provide the tenant with details of the bond at sign up or when the bond is applied during the tenancy. Missed bond payments will be managed in the same way that DCJ staff currently manage other tenancy charges that are owed by the tenant. For more information on rental bonds go to the Rental Bonds Policy.
Specific Performance Orders
A Specific Performance Order requires a tenant to correct a breach of their tenancy agreement. It is an order granted by the NSW Civil and Administrative Tribunal under Section 187 of the Residential Tenancies Act 2010. For information on when DCJ will apply for a Specific Performance Order, go to Dealing with a breach of the tenancy agreement under the During a Tenancy Policy.
Notices of Termination
DCJ may issue a Notice of Termination under Section 156C for rental bond or Section 87 of the Residential Tenancies Act 2010 requiring the tenant to vacate the premises on a specific date due to a breach of their tenancy agreement. For information on when DCJ will issue a Notice of Termination, go to Dealing with a breach of the tenancy agreement under the During a Tenancy Policy.
Orders of termination and possession
An Order of Termination is an order granted by the NSW Civil and Administrative Tribunal, which legally ends the tenancy on a certain date. An Order of Possession sets a date by which the tenant must vacate.
If a tenant fails to move out of the property by the date in the possession order, DCJ will apply for a Warrant of Possession for the NSW Sheriff's Office to evict the tenant. For information on when DCJ will apply for an Order of Termination and Possession, go to Dealing with a breach of the tenancy agreement under the During a Tenancy Policy.
Managing vacated accounts
When a tenant moves out of a property, DCJ will reconcile all charges and payments relating to the tenancy. At the end of this process, there may be amounts remaining in the accounts. These amounts may be debits or credits.
Tenants who vacate and are no longer being housed by DCJ
When finalising accounts, DCJ will automatically transfer balances between the tenant's accounts if the tenant:
- has left the property, and
- will no longer be housed by DCJ.
This means that, if there is a credit balance in one account and a debit balance in another, DCJ will use the credit to pay off the debit.
DCJ, through Vacated Accounts Management Team, will manage vacated accounts and advise the former tenant in writing of their final accounts, including whether DCJ has transferred any credit balances between accounts and the reasons for the transfer.
DCJ will manage any remaining credit or debit balances as outlined below.
DCJ will refund credits where:
- an account is in credit, or
- an extra deduction has been made from a tenant's Centrelink payment after they have left the property, or
- the tenant's financial institution has deducted an additional amount by direct debit after the tenant has left the property.
If the total credit amount is more than $50, DCJ will attempt to find the former tenant and refund the money. If the amount is less than $50, DCJ will refund the money when the former tenant asks for it. However, if a former tenant is deceased, DCJ will refund any remaining credit balance to the former tenant's estate.
If a joint tenancy ends and is in credit, DCJ will divide the amount equally amongst all the former tenants. One of the former tenants may provide written authority to pay their share, or a nominated amount of their share, of the refund to another of the former tenants.
DCJ will waive debit balances where t he former tenant is deceased. Where the former tenant is declared bankrupt, DCJ will seek to prove any debt with the Trustee in Bankruptcy. Where a debt is accrued as a result of rental subsidy fraud (not non-disclosure), DCJ will seek to recover the debt following the former tenant’s discharge from bankruptcy. Any debt accrued by the former tenant after the date of bankruptcy will be actively pursued by DCJ.
If the debt is more than $50 and the former tenant does not repay the debt, DCJ may refer the account to a mercantile agent. Where the debt is less than $50, Vacated Accounts Management Team, on behalf of DCJ, will manage debt recovery action. There are statutory limitations on recovering former tenant debts depending on the length of time that has passed. For more information see Assessing former social housing tenancy debts under the NSW Limitation Act 1969.
If a tenant leaves their property owing DCJ money and reapplies for social housing in the future, DCJ may restrict the services available to the former tenant. For more information, see the Eligibility for Social Housing Policy.
If a joint tenancy account is in debit, all the former tenants are liable for the debt. If one of the former tenants reapplies for assistance, they will have to arrange to repay all money owing.
Tenants who vacate their current property and are going to another DCJ property
Where a tenant will be housed in another DCJ property, DCJ will not automatically transfer balances between former accounts or from a former account to a new account. DCJ will manage debit and credit balances as outlined below.
Tenants may agree to:
- transfer a credit balance to pay off a debit balance on their former or new tenancy accounts, or
- transfer a credit balance to their new tenancy account.
DCJ will not transfer debit balances in vacated accounts to the new tenancy accounts. However, DCJ will manage debt recovery action as part of the current tenancy. Under Section 140 of the Residential Tenancies Act 2010, a tenant who has an outstanding debt from a former tenancy make a reasonable arrangement to repay the debt and continue making repayments, or DCJ may take action against their new tenancy through the NSW Civil and Administrative Tribunal.
Evidence requirements for managing accounts
When making decisions about managing accounts, DCJ will consider various information and evidence. For more information, go to Evidence requirements when making decisions about managing accounts.
4. Legislation and compliance
DCJ is able to apply and pursue tenancy charges in accordance with the provisions of the Residential Tenancies Act 2010 and the Housing Act 2001.
5. Related Information
- Tenancy Charges and Account Management Policy Supplement
- During a Tenancy Policy
- Eligibility for Social Housing Policy
- Client Service Delivery and Appeals Policy
6. Further information
Appealing decisions or actions
If a tenant disagrees with a decision DCJ has made, they should first discuss their concerns with a Client Service Officer. The next step, if they still believe DCJ has made an incorrect decision, is to ask for a formal review of the decision. For information on how reviews work, the tenant can ask a Client Service Officer for a copy of the appeals and reviewing decisions factsheet, or read the Client Service Delivery and Appeals Policy.
A tenant can only ask for a formal review of tenancy charges if:
- they believe DCJ did not calculate the rent subsidy correctly
- DCJ has not correctly credited payments for tenancy charges
- DCJ cancels their rent subsidy.
The tenant cannot ask for a formal review if rental arrears results in eviction proceedings. In these cases, an independent body called the NSW Civil and Administrative Tribunal (NCAT) will hear the matter. The role of the NCAT is to resolve disputes between tenants and landlords.