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ALTERNATIVE products to rental bonds will now be regulated following the passage of the “Residential Tenancies Amendment Bill” by the Legislative Assembly today (October 24).
The bill means that any alternative products to rental bonds will be required to be approved by the commissioner for Fair Trading before they are offered on a commercial basis.
Attorney-General Gordon Ramsay says the ACT government has become aware of at least one company developing a product that is an alternative to a bond.
“The ACT government supports innovation but also wants to safeguard consumers,” he says.
“These new laws will not affect rental bonds or non-commercial arrangements such as those between family and friends.
“Swift action is being taken to make sure consumers are well protected before they enter into contracts for these products.”
These alternative products, known as “commercial guarantees”, may not require a full upfront outlay of cash in a bond, but still may see the tenant having to pay if there is damage to the property.
“New products could cut upfront costs for people trying to rent a home in the ACT and we want our community to have access to these emerging choices, providing adequate consumer protections are in place,” Minister Ramsay says.
“We need to ensure such products are appropriately regulated to support and safeguard the community.”
The details of the application process for businesses developing a product alternative to a bond are being co-designed with key stakeholders.
Consultation with targeted industry and community stakeholders is now under way, with peak housing, property, legal and community services bodies invited to contribute to modelling the regulation.
Mr Ramsay says lessors and tenants should not purchase an alternative to a rental bond, such as a commercial rental guarantee, until the product has been registered by the Commissioner for Fair Trading.
“The Scheme offers up to 90% of the rental bond amount under their tenancy agreement. The bond loans, which are interest-free, are paid back to the ACT government over 20 months,” he says.
More information about the scheme is available by calling Housing ACT on 13 34 27.