We always say in our initial presentation of our product is that our preferred position is that when you send a debt recovery to us that you first obtain a tribunal or court order.
Why? Well there are several reasons.
There are many instances where we have been sent a debt for collection which has not been supported by a tribunal or court order and we try our utmost to get the debtors to pay the debt. If the debt is clear cut – i.e. rent, cleaning, carpets etc. – then in about 60% of cases the debtor will acknowledge his/her indebtedness and voluntarily enter into a payment arrangement The operative word here is ‘voluntarily’ as without a tribunal or court order there is absolutely nothing we can do to force payment other than the threat that they will be on the defaulting tenant database. To some tenants this means nothing until the next time they try to rent and are knocked back.
What the Tribunal Order does is give us the right to take legal enforcement action against the debtor
In the remaining 40% of cases the debtors are ‘street wise’ and when they are aware that we do not have anything to enforce against them, will simply tell us (often in no uncertain terms) where to go.
What the Tribunal Order does is give us the right to take legal enforcement action against the debtor (see Fact Sheet on Debt Collection).
Our aim is to make the defaulting tenant accountable to you and your landlord. One of the ways to assist us in doing that is to obtain the tribunal or court order so that we can legally enforce the debt.
We have had some feedback along the lines – ‘Why can’t you obtain the tribunal or court order’.
The simple fact is that we are not authorized to obtain it. The only person/s who can obtain the order are either the landlord or their duly appointed managing agent.
Some others say it is not worth going to tribunal or court – it is too complicated, the paper work is confusing, it takes too much time, the Tribunals are always on the tenant’s side, the landlord will not pay for us to go to Tribunal, etc.
Can we make this comment? It is not difficult in any Australian jurisdiction to prepare an application to Tribunal or Court. And if your application is prepared thoroughly you will get a fair hearing.
Remember as part of the service to our clients we offer an advisory service. We are more than happy to assist in the preparation of applications and advise what you will need to present your application.
In terms of time and cost, yes it can take several hours out of your day waiting around for a hearing. And yes, there is a cost involved. Invariably management agreements provide for a cost to the landlord for preparation of the application and an hourly rate for appearance at the Tribunal. Many landlords baulk at the suggestion of having you go to the Tribunal because of this cost resulting in either (a) you not going or (b) going to the tribunal and not charging the landlord.
The Tribunal is an independent umpire.
We know of some agents who have gone to the tribunal and requested that as part of the order the tenant pay compensation for the preparation and application. Except for one agent we know of, these requests have been declined. Why? Well the ability to charge for preparation and appearance is set out in the management agreement – i.e. the contract between you and the landlord. This agreement does not bind the tenant.
Therefore our suggestion is that you make it a special condition of the tenancy agreement that in the event of an application having to be made to the tribunal and an order is made in favour of the landlord, then the tenant agrees to pay an agreed fee for (a) preparation and (b) your attendance.
There is another reason why we are of the opinion that it is in your interests to obtain a Tribunal Order. The Tribunal is an independent umpire. In the main the system works well with the Tribunal acting as the final arbiter of issues between a landlord and tenant. Yes, we are aware of allegations of bias and some suggestion that some Tribunal members are heavily swayed in favour of the tenant. While there may be some instances of this, in the main we have found it not to be the case. If your application is prepared in a concise, logical and diligent manner, this will be acknowledged by the Tribunal and you will be guaranteed a fair hearing. If your application is ill prepared, relevant documents or evidence not available, then you will pay the price. It does not matter whether you are in the Tribunal or the High Court of Australia – preparation and preparedness are the key.
However, back to the independent umpire. In most cases the issues are clear cut – rent, cleaning, gardening etc.
However, in some they are not. Take for instance carpets. You may have a situation where the tenants have been there for two years and the carpets were in a reasonable state however during the tenancy the tenant’s children seriously marked them with crayons. No amount of cleaning will get rid of the marks. Your landlord tells you he wants the tenants to pay for replacement carpets. In fact, the landlord is insistent upon you claiming the replacement cost from the tenant. The only problem is that the carpets were 12 years old. Generally, the rule of thumb as far as the Tribunals are concerned is that the life of carpets in rental premise is 10 years. However, you follow your landlord’s instructions and apply for compensation. If the Tribunal makes the decision for you, then the landlord has nothing to come back at you about – the independent umpire has made the ruling.
There is a third and more compelling reason why you should obtain a Tribunal Order.
When you use a company such as Barclay MIS Protect & Collect, our sole objective is to get the debt repaid to your landlord. In order to do that in many cases we have to resort to legal enforcement procedures (again see Fact Sheet on Debt Collection).
Apart from Tasmania and Western Australia where residential tenancy matters are heard in the Magistrates Court, all other States have residential tenancy matters determined in the various Tribunals (VCAT, CTTT etc.).
When we receive the recovery instructions from you, we ask you to obtain a certified Tribunal Order. Once we have the original of that document and are also confidant that we have a current location for that debtor, we then proceed to register the Tribunal Order in the appropriate Court – e.g. Magistrates Court in Queensland, Local Court in New South Wales.
Once registered, it then becomes what is referred to as a ‘judgment of the court’. These judgments are ‘harvested’ by the licensed credit reporting agencies in Australia – Veda Advantage, Dunn & Bradstreet, etc. These are the companies that are authorized to provide an individual’s credit history to providers of finance and credit. When they harvest this information, they place it on the individual’s credit file as an unsatisfied judgment.
This means that when your defaulting tenant goes to apply for finance – whether it be to buy a house, a car, a flat screen TV or even apply for a mobile phone plan, the companies they apply to invariably do a credit check on them. What comes up is the unsatisfied judgment. This will mean they will not get the finance and will have resolve the matter with the creditor – your landlord – before a finance application is reconsidered.
In total therefore, it is our strong recommendation that it is in your and your landlord’s interest in all cases to obtain a Tribunal Order.