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Housing debts will no longer be 'through the roof'

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Justice Connect

Dear friends,

This week, after a 14 month own-motion investigation, the Victorian Ombudsman released her report on the management of maintenance claims against public housing tenants.

The Ombudsman’s report refers to the processes of Victoria’s Department of Health and Human Services for calculating and pursuing debts against public housing tenants as ‘egregiously unfair’.

Together with our friends in the legal assistance sector, Justice Connect Homeless Law made substantial contributions to the investigation, including oral interviews, working with clients to arrange for a detailed review of their housing files, and our position paper, "Through the Roof: Improving the Office of Housing’s policies and processes for dealing with housing debts" (Through the Roof).

Through the Roof contained 13 case studies and data from 52 Homeless Law clients who were provided with legal representation to address debts claimed by the Director of Housing. It showed that in 93% of finalised matters, the debts were reduced in part or full as a result of legal representation.

The evidence painted a picture of significantly inflated compensation claims being pursued against highly vulnerable people, which – if defended – were almost always reduced.

Read the full Through the Roof report here

The systemic problems identified in the Ombudsman’s report mirror Homeless Law’s concerns. They include:

  • Pursuing debts where damage was caused by family violence, third parties or fair wear and tear (contrary to DHHS policies).
  • A default practice of lodging claims against former tenants for almost the entire cost of repairing a vacated property (which is identified as particularly troubling “considering the age and condition of many public housing properties”).
  • Over-reliance on VCAT to determine claims and reluctance to negotiate or provide evidence before hearings. The Ombudsman’s report identifies that the Director of Housing is “a disproportionate applicant to VCAT”, accounting for over 20% of all applications to the VCAT Residential Tenancies List. Eighty per cent of these hearings go ahead without the tenant (including because correspondence has been sent to an old address).   
  • The use of debt collectors who receive a commission on the amount of money repaid to DHHS, which deters these companies from referring matters back to DHHS for review.
  • “Withholding future housing from former tenants until a payment plan is agreed to” (see Rachael’s story). The Ombudsman quotes Homeless Law:

“People are in a desperate position, they will accept liability, they will sign that repayment agreement because they’re homeless and their first priority is getting housing”.

Rachael's story

Rachael was a single mum living in a public housing property in regional Victoria. She entered rehab to get help with her substance dependence and, while she was in there, she was evicted for missing her rent. The locks were changed, so she wasn’t able to tidy the place up or move out properly, and the Director of Housing got a compensation order for about $8,000 for alleged damage and cleaning.

When she got out of rehab, Rachael had no home to return to and it wasn’t long before she ended up in prison. 

Over seven years later, it was confirmed that Rachael hadn’t really been behind in rent when she was evicted. She had been paying rent consistently, but hadn’t submitted her paperwork, so the rent had been increased to ‘market rate’. Once it was retrospectively recalculated, it was found she didn’t owe money for rent at all.

Despite this recognition that she had been evicted from her home for money she was subsequently found not to owe, the Director of Housing continued to pursue Rachael for the $8,000 for damage and cleaning.  They were unwilling to negotiate and insisted on going back to VCAT.

Rachael was homeless when she got out of prison and unable to reunite with her young son. She could not be offered a public housing property because of the old housing debt. 
Eventually, including as a result of the Ombudsman’s investigation, Rachael’s debt was reduced by two-thirds. 

She has now been safely housed, but it was a long and unjust path and her story brings to life why these reforms are so important.

The Ombudsman makes 18 recommendations, all of which the Victorian Government has accepted.  These include:

  • Stopping alleged debts from blocking access to housing. The requirement for people to make a debt repayment plan before getting an offer of public housing will be removed where the debt is in dispute. A user group will be established to monitor the implementation of these changes.
     
  • Better, clearer communication with tenants. This includes genuine efforts to contact tenants after a tenancy has ended; clear correspondence, which informs people of the basis of the claim, relevant guidelines, right to seek review or to appeal and contact details for tenant advocacy services; and full disclosure of documents and evidence that will be relied on at VCAT.
     
  • Training, support, oversight and cultural change. The report identifies that local housing staff, on average, manage 230 tenancies a year, which allows approximately 10 minutes per tenancy per week. These staff are doing a tough role and need improved processes and/or resourcing, together with ongoing training and practical guidance, to support consistent application of policies and appropriate decision-making. This should be accompanied by greater oversight by managers and team leaders regarding raising a maintenance claim, taking a claim to VCAT, reviewing a claim or considering a disputed claim that has already been decided by VCAT in the tenant’s absence.  

We congratulate the Victorian Ombudsman on this comprehensive investigation and the Victorian Government on their commitment to implementing the recommendations of the Ombudsman to create a fairer, more accountable system for working with their tenants.

Homeless Law also highlights the links between evictions from public housing, which mean people are unable to exit their properties in an organised way, and alleged debts.  We are optimistic that many of the changes coming out of this investigation, including better training, support and oversight, will also contribute to making evictions from public housing into homelessness an absolute last resort.

A huge thanks to our pro bono lawyers at our partner firms for their work on compiling case studies and data and, importantly, for their dedicated legal representation of Homeless Law’s clients. Thank you also to our clients who shared their stories and hung in there and to our partners in the legal and homelessness sectors for their commitment to improving the systems and processes that prolong homelessness and exacerbate hardship.

We look forward to working with the Government, our colleagues in the legal assistance and community sectors and Victorians who live in public housing to help turn these recommendations into meaningful and long-term change.   

Read the full Through the Roof position paper here

For more about the impact of housing debts on victims of family violence, see our report: Keeping Women Housed: Two years, ten client stories and ten calls for change 

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Justice Connect
Level 17, 461 Bourke St,
Melbourne, VIC, 3000

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