After launching a pilot program of the Rental Bonds Online system in July, NSW Fair Trading yesterday announced the system would be rolled out across the state and believes its adoption could cut through millions of dollars’ worth of red tape each year.
“The new scheme provides tenants with greater confidence that their bond money is securely held in trust, from the moment the payment leaves their account,” NSW Minister for Innovation and Better Regulation Victor Dominello said.
“Rental Bonds Online is expected to reduce red tape for tenants, private landlords and real estate agents by approximately $20 million per year,” Dominello said.
Dominello said NSW Fair Trading currently deals with more than 500,000 paper-based applications for the deposit and refund of residential bond monies each year.
The online system operates by the landlord or real estate agencies registering an account with Rental Bonds Online. They then provide the tenant with a secure link via email.
The tenant then uses that link to create their own account and lodges the payment directly to NSW Fair Trading.
Any bond money to be refunded to the tenant at the end of tenancy is transferred to a nominated bank account.
An early adopter of the system, Bernie Mitchell, principal of Focus Property Management, said the system has made life easier.
“We adopted it when it first came out. It used to be a tenant would come in with a cheque payable to the bond board and we would send it off or the money would go into an agency trust account and then be lodged through that,” Mitchell said.
“Now once we’ve approved a tenant we send them an email and they pay it directly to the board. It’s all tracked and has made life a whole lot easier,” he said.
While he said the system has improved office efficiency, Mitchell said he could see real benefits in the system for private landlords and their tenants.
“It saves a massive amount of time for us, but the transparency it provides is great for private landlords.
“For landlords they don’t have to worry about making sure they lodge the money in time, while tenants get the peace of mind that their money is secure in the right hands.
“I don’t see why it won’t be something that becomes the way of doing things across the country; it’s really just a great system.”
While Farrell and the NSW Government believe the system is a step forward, others aren't so sure.
Property Owners Association of NSW president John Gilmovich believes the onus to lodge a bond to the bond board shouldn't have been placed on the tenant.
"I think the better road to go down would have been to modernise the system so real estate agents could electronically lodge the payment. The tenant would still supply the bond to the agent and then the agent or property manager would disperse it to the bond board," Glimovich said.
"From my point of view there's a bit of concern. For example, what if a tenant lodges the bond late on a Friday and then picks up the keys to a property and moves in over the weekend and then it gets to Monday, they’re all moved in and then their payment bounces for whatever reason?" he said.
"At that point they've taken possession of the property, contracts are signed and it leaves the agents or landlords with little option, so that just raises a few alarm bells for me."
