Page 1989 - Week 06 - Tuesday, 5 June 2018
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which, over a period of time, will eventually amount to considerably more than a bond would have or from vulnerable people because either they do not understand the situation or because they are simply and understandably desperate to get into a house. It is my understanding that if a tenant becomes part of a dispute it could be particularly financially difficult for them compared to the current situation, which can be difficult enough for tenants.
By the very nature of their business model, these rental bond guarantee companies place themselves between tenants and landlords. The terms and conditions of one such company, Snug, state:
The Lessor appoints Snug as its attorney and agent to take action against the Tenant/s in the Lessor’s name on our behalf in respect of the Claim Amount (Recovery Action) and agrees that:
a. Snug will have full discretion in the conduct of the Recovery Action; and
b The Lessor will provide all information and do all things that Snug reasonably requests, in a timely manner, to enable Snug to conduct the Recovery Action.
The regulations introduced earlier this month mean that the tenant-landlord relationship cannot be subrogated in this way, nor can the provider of a rental bond guarantee be a party to a tenancy dispute. Perhaps most importantly the regulations will stipulate that the provider cannot recover an amount from the tenant which is greater than what could be deducted from a bond. The measures that I expect will be passed today do not prevent the use of bond guarantees but they provide additional protection to a tenant in the event that they enter into one, and I think this protection is well needed.
One of the other things we need to think about is why people are even interested in rental guarantees like Snug. There are prospective tenants who, while they can pay their rent, do not have the easily available funds to pay a bond up-front. Because of that the ACT government offers an interest-free bond loan scheme, administered by Housing ACT, and the recent debate about rental bond guarantees has served to highlight the difficulties in accessing such a loan.
The ACT Housing website just says people must meet an income test based on their household size, but it does not appear to give any information online about what the test would be. Instead the website very helpfully suggests that people “obtain a rental bond application kit from the central access point”. This turns out to be Nature Conservation House in Belconnen, which is not going to be convenient to everybody who is hoping to rent in the ACT. I intend to follow up on this. Given it is 2018, surely there is some way that you could apply for a rental bond loan online or at the very least access all the information that you need so that you can find out whether you are likely to be eligible thus making it worthwhile to make the trek out to Nature Conservation House.
The rest of the ACT government has been moving on to digital access for information and I would hope ACT Housing could do this as well. Or if they have and I have not found it, I apologise but suggest they could improve their website so that people can
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