What kind of drugs is this business idea on?

Radical plan that could see the end of rental bonds

hahaha what a joke,

no bond, and this entrepreneurs company makes the final decision!

landlords are going to get screwed from bad and mediocre tenants now that they have nothing to risk

What are these idiots smoking

is this a joke article??? or is it something that may happen

 

Its just insurance. Not a bad idea, but no track record of how it pays out so landlords may not accept it.

 

An insurance company making the final decision? - sounds dodgy as a $3 note. They're going to their best not to pay out on claims. Guess who sufers when they don't pay out?

The legality is dubious. A bond is not compulsory so a tenant and a LL could agree to no bond if the tenant has this insurance. What happens when the tenant cancels the policy after the first month?

No thanks!

 

I actually think this could work well for everyone. It might be simpler to get money out of a major insurer so could be good for landlords.

I guess a LL would want to see it paid in full for the term of the tenancy. What happens after that though if someone overstays?

 

"High barriers to renting"
On what planet is four weeks rent a high barrier to renting?! Especially since there are department of housing bond loans AND multiple companies out there offering easy finance for bonds.

This is a terrifying idea for Landlords and Agents, although a private insurance company can't possibly be worse at making decisions than tribunal.

 

Actually, lots. I remember when I came back penniless from overseas. Was a student....many times that 4 weeks bond plus 2 weeks in advance made things really hard going.

I'm in northern Brissie now and the wages here are tiny. Lots of single parents here feeding the family on 46kpa.

Hard Yakka.

 

@hammer you've only quoted part of the comment- anyone who meets affordability criteria is eligible for an interest free bond loan from the department of housing.

I would argue that as a penniless student you should probably have been considering rooming, though that argument only works in the right situations. I admit that cost of living can be really hard for families on low incomes, because you can't just share a house or flat when you have kids.

 

What they call a barrier of entry to renting is a natural and useful screening mechanism - if someone cannot afford the bond they very likely cannot afford an ongoing rental.

 

Sorry @Tom Rivera I had no idea about bond loans! Wish I had known at the time.....was really really tough.

 

Good points.

There would be nothing to prevent a tenant from cancelling the policy after the first month. I doubt the insurance co would want to get involved in the administrative nightmare of notifying a LL everytime a tenant is a day late with their insurance premium. What happens if the tenant cancels the policy? - the LL is stuck with risk but no bond held.

There would need to be a legislative framework (eg current tribunal system) for LLs to pursue tenants if the insurance failed. Difference with the current system is there would be no bond to claim on.

 

When screening for tenants, top of the priority list is the ability to pay.
If you can't even scrape a deposit together, the probability (in my opinion) of your ability to pay regularly goes all the way down.

Simple logic really. You can't save because you like to spend.
Saving isn't high on your priority.
Therefore when push comes to shove, it is more likely that a person will put paying rental further down the list of priorities.

This insurance is a joke. I wouldn't be accepting anyone on this.

 

At it's face value, me neither. I would like to see the exclusions, which I imagine would be long.

 

Yep. Plenty of this bond schemes have come about, including a local one here which loans the tenant the bond money at very low interest rate - pays it in full to PM at beginning then tenant pays them off.

But if tenant doesn't have ability to pay, nor skin in the game, then exceptions to every rule of course, but its likely they won't be able to afford rent after a while either.

 

Where's your ashtray Shazza?

Don't worry just stub your durry out on the carpet - Bazza took out bond insurance.

There will be an excess, like any other insurance, likely to be at least a couple of hundred.

 

State law would also need to allow such a scheme. Owners would be at the mercy of a insurer paid by the tenant who is hell bent on denying claims. Landlord will always lose. LL insurance AND a bond make sense. LL insurance may not even cover such a scheme loss.

Quote - 55% of NSW rental bonds are returned in full....Thats a lot that arent. This startup is just another "brilliant idea" that would end in tears. Imagine what the premium would be to avoid the 45% of bonds that fail. And I reckon this scheme would become a lender of last resort. Probably 80% failure rate.

April Fools joke ?

 

I don't like the idea of this one when there's no guarantee that a VCAT order will be adhered to, so agents can still go to VCAT, but they'd end up with a pretty piece of paper stating who owes what / a compensation order (vs a bond and compensation order). If they guaranteed to pay out on VCAT orders at least, then it's a step in the right direction. The policy I believe has to be paid up front for the year, and renewed every year (so would be up to the agent / LL to ensure they receive the renewal certificate)

On another note, we do use Easy Bond Pay. So the tenant gets a loan out from Easy Bond pay, the bond is paid to the agent like any normal bond. The tenant and Easy Bond Pay sign the bond lodgement - so the tenant just can't sign the money back, once the loan is paid off, then the bond is solely in the tenants name, no issues.

You would be surprised how often professional divorcees struggle with that initial bond as they often have their funds tied up (owner occupiers, separation then turns into a bitter divorce)...

 

"For disputed amounts under $500, Snug would have the last word, he said, with the renter permitted to present their own evidence."

hmmmm this makes things interesting.

how legal if land lord holds bond rather than the bond board ala commercial in resi tenancy

 

The land lord doesn't hold the bond. The insurer is insuring that a bond will be issued if the property is in poor repair at the end of the tenancy.

 

Easy Bond Pay seems a smart solution.

 

But insurers are smart enough to not cover Bazza in future.