REAL ESTATE AGENT & RENTALS
eCollect collects debts owed to real estate agents for unpaid commission and advertising.
We also collect debts owed for residential and commercial tenancy rental.
The procedures for rental recoveries vary from state to state.
Victoria
Rental transactions in Victoria are governed by the Residential Tenancies Act 1980.
This and other Victorian legislation can be viewed at www.legislation.vic.gov.au.
Before any debt recovery action can be taken, an order for payment of money needs to be obtained from the Victorian Civil and Administrative Tribunal (VCAT). This can be done by the landlord's real estate agent, the landlord personally or by eCollect staff. If eCollect staff are engaged to do this, a charge of $370.00 inclusive of GST and the VCAT application fee is payable to eCollect by the landlord. This amount is not usually recoverable from the tenant.
Assuming that an order from VCAT has been obtained, eCollect will accept rental debt recovery assignments on a "no-recovery no-cost" basis.
eCollect's usual fee (excluding GST) is:
debts under $1,000 50% of each amount recovered
debts $1,001 - $3,000 35% of each amount recovered
debts $3,001 - $5,000 25% of each amount recovered
debts over $5,000 20% of each amount recovered
eCollect will not accept rental debt recovery assignments unless the landlord can provide a current address and phone number.
Landlord's Action
The Landlord needs to:
- send a copy of the VCAT order + any information about the debtor to eCollect preferably in electronic format (scanned file or fax). The debtors current address, phone and email contact is a minimum. The more information that is provided to eCollect, the higher become the chances of collection;
- obtain from VCAT a certified copy of the order capable of registration in the Magistrates Court. This can be requested by letter or in person and is simply a reprint of the order made by VCAT and signed by an authorised representative of VCAT. Provide the a certified copy of the order to eCollect;
- read and acknowledge the eCollect engagement authority.
eCollect Initial Action
- make contact with the tenant and make demand for payment. E C Legal, the eCollect in-house legal firm may be engaged for this purpose (the E C Legal cost is paid by eCollect);
- obtain payment or make a payment arrangement;
- undertake basic location searches if the tenant does not respond;
- record all action on the eCollect website.
All of the eCollect action can be viewed by the landlord online at www.eCollect.com.au. The landlord will be provided with a login and password.
Possible Courses of Action
Our general experience with rental debt recoveries is that they are one of the more difficult types of debts to recover with the main problem being an inability to locate the tenant.
If our basic location searches do not reveal a current address, then eCollect can undertake a comprehensive location search on the landlord's behalf. This is done at a cost of $200 + GST which is paid by the landlord only if a positive location for the tenant is found. The comprehensive location search cost is not recoverable from the tenant and is only done with the authority of the landlord after a report from the eCollect account manager.
If the eCollect initial action fails to bring a result, then, E C Legal, eCollect's in-house legal firm may need to be engaged to:
- register the VCAT order in the Magistrates Court of Victoria. E C Legal will charge $100 + GST to do this or the landlord may choose to do this personally. The registration cost is not recoverable from the debtor;
- once the VCAT order is registered in the Magistrates Court of Victoria, the debt may be listed with the various credit reporting agencies as a default. This may prevent the tenant from getting credit which in turn may prompt payment of the debt. There is no charge to the landlord for this;
- once the VCAT order is registered in the Magistrates Court of Victoria, various enforcement processes can be undertaken by E C Legal. Each of these enforcement processes have costs associated with them which are payable to E C Legal but are recoverable from the tenant. Some enforcement processes to be considered are:
Summons for Oral Examination. This compels the tenant, on pain of imprisonment, to attend at the court and give a statement of their assets, liabilities, income and expenses and other circumstances. Approximate cost $350;
Warrant to Sheriff. This sends the sheriff to seize and sell goods belonging to the tenant. Approximate cost $300;
Attachment of Earnings. This requires the employer of the tenant to deduct a certain amount from the tenant's wages and pay this direct to eCollect. Approximate cost of $650.00.
There are a number of other enforcement measures that require advice from a qualified lawyer. E C Legal staff will explain the above and other enforcement measures available to you once eCollect exhausts its initial action without success. E C Legal will provide an exact cost for each enforcement measure before commencing work on the landlord's behalf. E C Legal will not charge for the explanation and advice about the enforcement options and there is no obligation for the landlord to continue.
Other states
eCollect does not currently accept engagements for rental recoveries in other states.
Ref: CLIENT INFO SHEET - Rental Recoveries
Authorised by: James Woods
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Last Update: Thursday, 13 November 2008
