Millions in tenancy bonds lost

The Government pocketed more than $37 million in unclaimed tenancy bonds in the past two years, some dating back to before 1989.

With between 4000 and 6000 bonds going unclaimed or uncollected annually, there are calls for changes to ensure tenants are able to get refunds they are entitled to.

Minister for HousingPhil Twyford said a review of the Residential Tenancies Act this year aimed to make life better for renters, however there were no plans to look at changing the process around unclaimed bonds.

Wellingtonian Dylan Gray, 23, felt the sting of losing her bond during her last year of university, and was only able to afford the next bond with the help of her mother.

‘‘Many of my friends don’t have parents who can support them like mine did. They end up living in cars or really bad places as they can’t afford losing their money,’’ Gray said.

Gray paid an outgoing tenant $300 for their share of the bond, passing a completed bond transfer form to her landlord. When the tenancy ended five months later, she found the form had never been lodged.

‘‘Basically after three months of trying to get anything I gave up.’’

Under the Residential Tenancies Act 1986 bond money is paid into the Residential Tenancies Trust Account, which, if unclaimed six years after the end of the tenancy, belongs to the Crown.

Outstanding unclaimed bonds dating to 1986 were vested with the government in 2016, where it was treated as general income, resulting in $32.6m from more than 121,000 bonds being taken.

This process now happens annually, with $4.6m more entering the government coffers in 2017.

A Tenancy Services spokeswoman said it was unclear how this amount would change year-toyear, and there was no recording of why tenants failed to claim bonds.

According to an official information response from the Ministry of Business Innovation and Employment, Tenancy Services was not required to notify tenants of unclaimed bonds, however a separate team was being set up to do so.

Renters United organiser Robert Whitaker said money from unclaimed bonds should be invested back in tenants in some way, perhaps on advocacy services.

Tenancy Services operations are offset by interest earned from the Residential Tenancy Trust Account, as well as fees from dispute resolution services.

During the 2016/17 financial year the trust account earned $20.6m in interest, constituting the majority of Tenancy Services funding.

This did not constitute a surplus, but a spokeswoman said if there were a surplus it would be directed to Treasury’s consolidated fund.

From 2015-2017, the number of unclaimed or uncollected bonds equalled roughly 3 per cent of bonds lodged.