Page 1883 - Week 06 - Thursday, 2 May 1991
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disputes. This Bill, drafted into the form of the subsisting and often unsatisfactory Landlord and Tenant Act, will come through further review by the Law Reform Committee. The Bill will not pre-empt major recommendations of that committee that may result from the review.
The proposed legislation requires all bonds to be lodged with the office. It is not considered cost-effective to allow bonds collected by agents to be exempted. Bond moneys invested by the office would be able to earn a higher interest rate than if those bonds were held in a separate agents' trust fund. An agents' fund would also require an effective system for monitoring bond lodgments and payments, which would generate additional administrative costs.
It has also been suggested that the office will do nothing to settle disputes between tenants and landlords and may actually slow down settlement. Currently there is clear evidence that the level of disputation between tenant and landlord has been reduced through the existence of such schemes in other States. There is no reason to suggest that this will not be the case in the ACT after the office has been operating for a reasonable period.
It has also been reported in the media that the office will slow down the return of non-disputed bond moneys. The New South Wales experience has been cited, where it is asserted that it took an average of six weeks to return such moneys. On my advice, this is incorrect. In most cases, undisputed bond moneys which are claimed in New South Wales, as in Queensland, are refunded on the same day. The Office of Rental Bonds in the ACT will follow the same practices operating in those States. Up until now, landlords and real estate agents in the ACT have had a legally required period of 28 days to refund bond moneys. It is quite obvious that the office will be providing a direct service to the majority of tenants not involved in disputation, not just to a minority.
It has also been asserted that the office will provide no tangible benefits to landlords or tenants. One of the central objectives of the office will be to identify key areas of concern in tenant-landlord relations and to fund programs specifically directed towards meeting these needs. In New South Wales, where the Rental Bond Board has been operating successfully for over 10 years, interest earned on bond moneys has funded non-government tenants advice and housing referral services and an array of home purchase assistance schemes.
Finally, there are claims that the office would be a mini-bureaucracy and require $1m a year to staff and operate. The structure of the proposed Office of Rental Bonds will minimise operational costs. Firstly, the permanent staffing structure will be reviewed after operation to ensure that it is cost effective. Secondly, services
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