Management of public housing maintenance claims unfair and unreasonable: Ombudsman

 
Monday 30 October 2017
 
The Department of Health and Human Services is failing to live up to its commitment as a ‘social landlord’ and wasting public resources through its inept management of maintenance claims at the end of public housing tenancies.
 
Disadvantaged Victorians are being charged thousands of dollars for the repair of damaged public housing, even when there’s no evidence they caused the damage, Victorian Ombudsman Deborah Glass has found.
 
“The effect on the lives of already disadvantaged people caught up in the department’s egregiously unfair processes cannot be overstated,” Ms Glass said. “The stress of a huge debt which could arrive at random, years after the end of a tenancy often comes on top of the social, economic and other challenges already faced by those dealing with disadvantage. There is the powerlessness of the already powerless, pitted against the State: the refusal of services until they enter a payment plan must be one of the most unconscionable acts of a government department I have encountered.”
 
Ms Glass said her office had uncovered systemic problems in the way the department manages and pursues maintenance claims against former public housing tenants. This included:
 
  • A default practice of raising maintenance claims against former tenants for almost the entire cost of repairing a vacated property, failing to take into account:
    • special circumstances (such as family violence, mental and physical illness or evidence of third party damage)
    • fair wear and tear and depreciation which can add up to thousands of dollars.
  • Sending letters advising former tenants of claims against them to addresses the department knows they have left.
  • Failing to negotiate with tenants or their advocates.
  • In effect outsourcing its responsibilities to determine a debt to VCAT, wasting public resources and breaching its responsibility as a Model Litigant.
  • Withholding future housing from former tenants until a payment plan is agreed to.
 
“The evidence of this investigation is that department staff wrongly assess debts beyond a tenant’s liability, send correspondence to an address they know the tenant has left and routinely use VCAT to determine a debt – in breach of their requirement to be a Model Litigant,” Ms Glass said.
The department is the highest sole litigant on the VCAT Residential Tenancies List and more than 80 per cent of claims proceed uncontested. VCAT rarely awards the full amount claimed; in many cases compensation awarded to the department is half the original claim.
 
Public resources are also wasted by the department’s pursuit of debts against public housing tenants who are ‘judgment proof’ (where an order for compensation cannot be enforced due to the debtor’s financial situation).
 
The department has accepted all 18 of the Ombudsman’s recommendations, committing to many measures including:
  • Removing the requirement for applicants to make a debt repayment plan prior to an offer of public housing where the claim is in dispute.
  • Implementing a change management package to equip department staff with the necessary knowledge, skills and resources so they engage with former tenants when determining the cause of any damage and liability for the repair costs.
  • Establishing a high-level user group for public housing services to monitor the implementation of new and improved guidance.
 
Ms Glass thanked all parties who had contributed to the investigation, including public housing tenants, the Tenants Union of Victoria, Justice Connect Homeless Law, the Victorian Public Tenants Association, Victoria Legal Aid, West Heidelberg Community Legal Service, Inner Melbourne Community Legal, VCAT President the Hon Justice Greg Garde, VCAT CEO Keryn Negri, former VCAT President the Hon Justice Kevin Bell and Department of Health and Human Services staff.
 
 
Media contact: Ainslie Gowan | Tel 03 9613 6235 | Mob 0409 936 235  vomedia@ombudsman.vic.gov.au
 
Further information: Tel 03 9613 6222 | Regional 1800 806 314 | ombudvic@ombudsman.vic.gov.au | Follow @VicOmbudsman