Housing

Account Management Policy

Policy Last Amended: 31 October 2016

1. Background

Generally, all tenants living in a property owned or managed by the Department of Family & Community Services (FACS) are required to pay tenancy charges. Tenancy charges include rent, water usage, repairs, miscellaneous debts and combined former debt.

FACS 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. FACS 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, FACS 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 FACS manages tenancy accounts. The Account Management and Tenancy Charges Policy Supplement provides further information to support this document.

2. Scope

This policy applies to tenants and former tenants who are living, or who have lived, in a property owned or managed by FACS, including tenants of the Aboriginal Housing Office.

3. Policy statement

FACS  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 FACS immediately if they are unable to make payments. FACS will work with tenants to ensure they meet their obligation to pay their tenancy charges. However, FACS will take eviction action when there are major or persistent arrears.

Former tenants must pay all money owing on vacated accounts. FACS may decide to refer vacated accounts to a mercantile agent for collection, or pursue legal action if former tenants do not make payments. FACS will refund any credit amounts.

Advising current tenants of arrears on their tenancy accounts

FACS  will always contact tenants in writing or via electronic means if their accounts fall into arrears. Additionally, FACS may also contact tenants by phone, or by visiting them in their homes. FACS 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, FACS will work with the tenant to try to resolve the problem. When deciding how to respond to a tenant's account being in arrears, FACS 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 FACS 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, FACS will continue working with the tenant to try to resolve the problem.

FACS  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, FACS may refer tenants to various financial and other support services to assist them in managing their arrears.

Repayment arrangements

If a tenant goes into arrears, FACS will negotiate a reasonable repayment arrangement with the tenant. A debt can be repaid whether in full or by instalments. FACS 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 FACS 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, FACS 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 FACS is unable to negotiate a reasonable repayment arrangement, it will escalate the arrears recovery process. Depending on the circumstances, FACS may apply to the NSW Civil and Administrative Tribunal for a Specific Performance Order, or an order to terminate the tenancy.

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 FACS 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

FACS  may issue a Notice of Termination under 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 FACS 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, FACS will apply for a Warrant of Possession for the NSW Sheriff's Office to evict the tenant. For information on when FACS 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.

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Managing vacated accounts

When a tenant moves out of a property, FACS 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 FACS

When finalising accounts, FACS will automatically transfer balances between the tenant's accounts if the tenant:

  • Has left the property, and
  • Will no longer be housed by FACS.

This means that, if there is a credit balance in one account and a debit balance in another, FACS will use the credit to pay off the debit.

FACS , through Business Services, will manage vacated accounts and advise the former tenant in writing of their final accounts, including whether FACS has transferred any credit balances between accounts and the reasons for the transfer.

FACS  will manage any remaining credit or debit balances as outlined below.

Credit balances

FACS  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,  FACS  will attempt to find the former tenant and refund the money. If the amount is less than $50,  FACS  will refund the money when the former tenant asks for it. However, if a former tenant is deceased,  FACS  will refund any remaining credit balance to the former tenant's estate.

If a joint tenancy ends and is in credit, FACS 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.

Debit balances

FACS  will waive debit balances where t he former tenant is deceased. Where the  former tenant is declared bankrupt, FACS 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), FACS 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 FACS. 

If the debt is more than $50 and the former tenant does not repay the debt, FACS may refer the account to a mercantile agent. Where the debt is less than $50, Business Services, on behalf of FACS, 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 FACS money and reapplies for social housing in the future, FACS 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 FACS property 

Where a tenant will be housed in another  FACS  property,  FACS  will not automatically transfer balances between former accounts or from a former account to a new account.  FACS  will manage debit and credit balances as outlined below.

Credit balances

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.

Debit balances

FACS  will not transfer debit balances in vacated accounts to the new tenancy accounts. However, FACS 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 arrangment to repay the debt and continue making repayments, or FACS 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, FACS will consider various information and evidence. For more information, go to Evidence requirements when making decisions about managing accounts.

4.Legislation and compliance

FACS  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

6. Further information

Appealing decisions or actions

If a tenant disagrees with a decision FACS has made, they should first discuss their concerns with a Client Service Officer. The next step, if they still believe FACS 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 fact sheet, or read the policy Client Service Delivery and Appeals.

A tenant can only ask for a formal review of tenancy charges if:

  • They believe FACS did not calculate the rent subsidy correctly
  • FACS has not correctly credited payments for tenancy charges
  • FACS 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.

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www.facs.nsw.gov.au