Rental Bonds

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With renting increasingly the new normal for many, an innovative fintech company has come up with a way to reduce the pesky rental bond payment.
The product, called Trustbond and created by the startup Traity, lets tenants avoid paying a traditional bond and instead pay a premium, which is a proportion of the rent paid for the term of the lease.
The innovative fintech company has partnered with landlord insurance specialist Terri Scheer Insurance to launch Trustbond.
Trustbond provides security to landlord without freezing the savings of tenants in a rental bond using world-first technology that "will ensure trustworthy Australians save thousands of dollars."
A traditional bond is a large sum that is tied up for the duration of the lease while Trustbond will allows tenant to pay a relatively small fee upfront to cover the protection their landlord required.
The Trustbond system will also allow estate agents and landlords to determine a person’s suitability as a tenant while providing landlords with the same level of protection as a traditional cash bond.
Trustbond is being launched initially in South Australia and it is expected will roll out to other states in the coming months. In NSW around 80,000 residential rental bonds, totalling $1.31 billion are held by the NSW Rental Bond Board.
The new product is marketed as a five step process:
<ul>
<li>Go to <a href="https://www.trustbond.com" target="_blank">www.trustbond.com</a>
</li>
<li>Prove you are a trustworthy tenant by building your reputation profile</li>
<li>Replace the cash bond with a Trustbond</li>
<li>Share the Trustbond with your real estate agent or landlord for their agreement</li>
<li>Keep your cash in your pocket for when you need it most</li>
</ul>
Trustbond measures trustworthiness using online data including networks, ratings and reviews from Facebook, Twitter, LinkedIn, Airbnb, eBay and Uber to determine a tenant’s TrustScore.
Once eligibility has been established, the tenant pays an upfront fee that is a percentage of what a conventional rental bond would cost.
As a traditional cash bond might require a tenant to pay $2000, with Trustbond, the tenant might pay around $250 that still covers their landlord for the $2000, freeing up $1750 for the tenant.
The most recent census data revealed the trend towards renting as Australians renting increased from 29.6 to 30.9 per cent in 2016.
The inspiration for Trustbond came from the Traity CEO, Juan Cartagena's own experience of renting property.
As a new resident of the United States with no local rental or employment history, landlords were requesting rental cash bonds of up to $14,000.
He was untrusted as a foreigner, and his landlords requested very expensive bonds as they did not have enough information to trust him.
“Trustbond recognises a person’s digital profile as an asset, putting money back in tenants’ pockets to spend on the things that matter to them,” Traity executive Will Soutar, said.
“It allows people who may have an unconventional working life, such as freelancing, or who have no rental history, greater access to the property rental market.
“In addition to the financial incentives, Trustbond is a better way for tenants to show who they really are.
“It’s a way to build stronger relationships between tenants, landlords and property managers based on trust.”
Terri Scheer Insurance executive manager, Ms Carolyn Parrella, said there were key incentives for landlords to choose tenants who are eligible for Trustbond.
“Trustbond is based on the premise that good online citizens will also be good tenants. Only tenants with a high TrustScore are eligible,” Ms Parrella said.
“Trustbond gives landlords and property managers the ability to rate and review tenants.
“This encourages tenants to be responsible and motivates them to take care of their landlord’s property, in order to keep their TrustScore high.
“Landlords who use Trustbond can save time with automatic verification and screening, fill their properties faster by appealing to a broader pool of tenants and make better decisions for tenant selection.
“These benefits can be achieved with the same level of protection as a conventional cash bond.
“Trustbond covers the same breaches of a tenancy agreement including unpaid rent, damage, broken leases and associated costs, without the need to go to a tribunal.
“We want to take the stress out of investing for landlords, support tenants to feel trusted and remove barriers to entry for renting,” Ms Parrella said.
Visit <a href="https://www.trustbond.com" target="_blank">www.trustbond.com </a>to check your TrustScore and Trustbond eligibility.
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Costly rental bond outlay foregone in fintech Trustbond revolution 

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A jail term has been suspended for a real estate leasing agent in Sydney after he pleaded guilty to stealing more than $210,000 worth of rental bonds refunds while the tenants were still in occupation.
Matthew Thomas Williams was sentenced to two 15-month jail terms for dishonestly claiming the refunds of 42 rental bonds from the NSW Rental Bond Board. 
The jail term was suspended on the condition that the 36-year-old enter a good behaviour bond.
He was disqualified from holding a real estate licence for a period of 10 years.
As a real estate licence holder, Williams had access to the Rental Bonds Online system that enabled him to lodge rental bonds on behalf of his agency’s tenants, which he later refunded into his own account during ongoing leases.
Williams fraudulently accessed the bonds while working at different real estate agencies based initially in Glebe and then Double Bay.
The Minister for Better Regulation Matt Kean told Fairfax Media that Williams had used his position of trust to claim the rental bonds of tenants, and used the money primarily for gambling.
His deception was uncovered and reported to Fair Trading by his employer after a tenant requested a bond refund.
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Jail term suspended for Sydney inner west leasing agent after rental bond fraud

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Rental community platform startup, Snug.com, is set to launch a surety bond which it says will free up renters’ cash while also providing protection to landlords. 
The surety bond, BondCover, swaps the traditional cash rental bond with a certificate of guarantee, backed by Snug. 
This guarantees that the owner will be paid for a valid claim against the rental bond using the same claims process, rights, and obligations for renters and owners – but without tying up thousands in cash. 
Owner claims are paid within two business days by entering the Tribunal order number.
Snug says its product is designed to free up $4 billion worth of rental bonds.
Snug founder said that the current cash bond system is outdated, and the “resulting liquidity and opportunity cost for renters is astronomical”.
“With 2.5 million renters across Australia, it’s time to recognise good renting,” he said.  
“BondCover provides the necessary protection to owners, but in a way that doesn’t lock down renters’ precious cash for no good reason – a win-win for all parties. And imagine the returns if renters had invested $4 billion in the Sydney property market, paid off debt, or invested in Amazon shares over the past 5 years instead!”
Renters can purchase BondCover for around 5 per cent of the face value of the rental bond, and are provided with a certificate of guarantee to give the owner or agent to replace a cash bond. So, a current renter with a $2,000 bond could obtain BondCover for around $100 per annum, and receive $1,900 in cash back.
Snug will open BondCover applications to renters on September 1.
BondCover was conceived after Snug research found that 99 per cent of renters do the right thing: around 80 per cent of rental bonds are refunded without claim, and almost all of the remaining 20 per cent is largely negotiated then resolved between parties. 
In building its platform, Snug conducted legal and actuarial research, and engaged with state governments. 
Its focus group research on hundreds of renters found that renters are most concerned about their rental reputation and ability to rent their next property, driving their good behaviour.
“Snug’s BondCover product has been designed to comply with existing rental tenancy legislation and relevant financial services and insurance regulations. This is digital innovation in housing, that’s good news for affordability, and it’s a stimulus to the economy with strong consumer benefits,” continued Justin Butterworth.
“The world has changed since the cash bond system was designed. It’s 2017, we have the technology to better manage identity, reputation, and recourse to create a more efficient securitised rental bond system. The days of the cash bond are over,” concluded Justin Butterworth.
Snug was one of the first startups to be housed in IAG’s onsite accelerator, Firemark Labs.
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Startup Snug to launch surety bond to unlock renters’ bond cash

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The new strata building bond and inspection scheme in New South Wales will start 1 January 2018 following a change to the original commencement date of 1 July 2017.
This scheme will only apply to construction contracts signed (or where there is no contract and building work commences) from 1 January 2018 according to NSW Fair Trading and will not require developers of new strata schemes to lodge defect bonds before 31 December 2017.
The starting date has been due to put procedural and professional requirements in place before commencement.
This includes:
<ul>
<li>the new standards and procedures relating to strata-specific building inspections</li>
<li>new digital business processes to support bond lodgement and processing of the scheme. </li>
</ul>
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Date change for NSW strata building bond scheme

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A financial product allowing renters an option to pay rental bonds off in instalments is being offered through BondSure.
Tenants can apply online to have rental bonds up to $5,000 paid on their behalf by BondSure, to be repaid over 6 or 12 months.
Australian lawyer and insurance entrepreneur, Michael Wood, created BondSure and said recouping bonds can also be a real nightmare for some tenants when accidents or disputes over cleaning put the bond in jeopardy.
“BondSure aims to help address these issues by providing consumers with a viable alternative to paying a bond by cash or credit card, and is the only product on the market that helps tenants protect their bonds against financial erosion,” he said.
“BondSure is a compelling alternative to Payday Lenders which we believe have been exploiting the residential bond market by offering loans to consumers with comparison rates of over 150 percent and repayment terms as small as four weeks in some instances.
The bond can be taken without the insurances and the insurances without the bond. The insurance can be continued if the lease runs longer than 12 months.
Former general manager of CENTURY 21 Australia, Paul Mylott, has been appointed chief executive officer. He said the insurance component of BONDSURE will lead to less bond disputes for tenants, property managers and landlords
“BondSure utilises identity and credit check providers and an online credit worthiness assessment to qualify  tenants, which is an aspect of the product that we expect will be warmly received by landlords,” said Paul Mylott.
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“Estate agents need only register once, providing bank details for the bond transfer, and then check the rental address inserted on the site at the time of signing the lease. Otherwise it’s all done by the tenant and BondSure. 
<a href="https://www.bondsure.com.au" target="_blank">Click here</a> to find out more.
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Property 101: Households can now insure rental bonds

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Rental Bonds Online is a new service helping tenants, agents and private landlords lodge and refund bond money securely and easily.
Tenants can now pay their bond direct to NSW Fair Trading using credit card or BPAY. Agents or landlords can lodge bonds in minutes, at any time, without having to post lodgement forms.
All parties are kept informed through SMS phone notifications and email updates.
Understand how Rental Bonds Online makes bond transactions more convenient. Watch our 3-minute introduction to the service:
<a href="https://youtu.be/5rRUdOgQEnY" target="_blank" title="Rental Bonds Online - the smart way to manage your bond (video)"><img src="https://www.fairtrading.nsw.gov.au/biz_res/ftweb/Images/About_us/Online_services/Rental_bonds_online_video.jpg" alt="Rental Bonds Online video" width="225" height="175"></a> Watch the video - Rental Bonds Online: the smart way to manage your bond (Internet Explorer users please right click on the video and select ‘Open link’ to watch.)  
The video is also available in the following languages:
<ul>
<li>
<a href="https://www.youtube.com/watch?v=zEXcnl6sjLI" target="_blank">Rental Bonds Online: the smart way to manage your bond (video in Arabic) </a> 
</li>
<li>
<a href="https://www.youtube.com/watch?v=ane7EYv-uSA" target="_blank">Rental Bonds Online: the smart way to manage your bond </a><a href="https://www.youtube.com/watch?v=ane7EYv-uSA" target="_blank">(video in Chinese)</a> </li>
<li>
<a href="https://www.youtube.com/watch?v=HL6a9ujyDSI" target="_blank">Rental Bonds Online: the smart way to manage your bond</a><a href="https://www.youtube.com/watch?v=HL6a9ujyDSI" target="_blank"> (video in Korean)</a>
</li>
<li><a href="https://www.youtube.com/watch?v=mzpKX9XQUnE" target="_blank">Rental Bonds Online: the smart way to manage your bond (video in Vietnamese)</a></li>
</ul>
Agents, private landlords and tenants can access the Rental Bonds Online site using a desktop computer or any mobile device such as a tablet or mobile phone.
<ul>
<li>A new feature released in late 2015 directs tenants using their smartphone to a version of the Rental Bonds Online site optimised for smaller devices.  This gives tenants access to all the core functions on Rental Bonds Online so they can create an account, lodge and claim bond money, and check the status of their bond. They can also navigate to the full site if they need to access other functions within Rental Bonds Online.</li>
</ul>
How to register and find out more
Visit the relevant page to you to learn more, including how to register as a Rental Bonds Online user:
<a href="https://www.fairtrading.nsw.gov.au/ftw/About_us/Online_services/Rental_bonds_online/For_property_agents.page" target="_blank" style="line-height: 1.3em;">For property agents</a> <a href="https://www.fairtrading.nsw.gov.au/ftw/About_us/Online_services/Rental_bonds_online/For_tenants.page" target="_blank" style="line-height: 1.3em;">For tenants</a> <a href="https://www.fairtrading.nsw.gov.au/ftw/About_us/Online_services/Rental_bonds_online/For_private_landlords.page" target="_blank" style="line-height: 1.3em;">For private landlords</a>
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