Rent cheats now owe $10m

2 February 2005

South Australian Housing Trust tenants owe more than $10 million in rent and bills, with almost one-third of residents carrying a bad debt.

Housing Trust figures show the average bad debt of the 13,027 tenants who owe money is $780.

This represents an average of nine weeks' rent per tenant.

The trust now will use a campaign of face-to-face contact to encourage debtor tenants to pay up.

Meetings with trust debt managers will replace the correspondence system used until now.

Figures for 2003-04 also show that of the trust's 45,000 tenants, 7470 were responsible for $3.7m damage not considered to be reasonable wear and tear. This was up from $2.3 million in 2001-02.

Housing Minister Jay Weatherill said that to help rein in the debt, a system involving 114 managers visiting tenants would replace the current reliance on letters and warnings.

The plan would also act as a prevention measure to stop tenants building up debts they would later struggle to pay.

"The trust is changing the role of its housing managers to enable more time to be spent on customer contact including debt management and improved debt follow-up processes with an emphasis on personal contact," Mr Weatherill said.

The policy is a result of a review of the effectiveness of debt management in the last financial year.

It follows a trend of increased evictions because of bad debts, up from 309 in 2002/2003 to 381 in 2003/2004, which the trust tries to avoid because there is less chance of being paid back.

The number of bad debtors and the amount they owe also increased by almost one-third in four years. In 2001, 12,000 tenants owed $7.63 million, or $630 each.

Shelter SA executive director Gary Wilson welcomed the use of meetings rather than paperwork to resolve debt issues, which he said often had a simple explanation and short-term resolution.

"It is not in anyone's interest for the Housing Trust to evict people because it ends up costing the community far more than the original debt," he said.

Mr Wilson said may debts were caused by immediate financial pressures and could be resolved if trust staff sat down with tenants to seek solutions. "It can be hard for tenants who might be worried about feeding their kids one week and that is why they haven't temporarily paid their rent for a week," he said.

Mr Wilson said face-to-face contact had been identified by the Government's Social Inclusion Unit as an effective way of avoiding homelessness, by counselling people who were in debt.