RENTAL GUAR­AN­TOR LEG­IS­LA­TION SPARKS CON­CERN IN THE ACT

Elite Property Manager - - READER PROFILE -

Af­ter months of ne­go­ti­a­tion, the ACT Gov­ern­ment has this week en­acted leg­is­la­tion that al­lows li­censed com­mer­cial bond guar­an­tors to op­er­ate within the Ter­ri­tory.

The move en­ables renters to pay a fee to a com­mer­cial guar­an­tor rather than fork­ing out the cash re­quired for a bond. While the ini­tia­tive has been wel­comed by com­mer­cial guar­an­tors such as Snug, it’s be­ing eyed with cau­tion by the real es­tate in­dus­try and rental bod­ies alike.

Snug ex­plains their ser­vice sees renters pur­chase BondCover for around five per cent of the face value of the rental bond. A renter with a $2,000 cash bond could ob­tain BondCover for around $100 per an­num and put the bal­ance of $1,900 to­wards other uses.

Should a claim be con­sid­ered valid, the ten­ant can ei­ther pay up or Snug will hon­our the claim and then re­coup their costs.

But the REIACT, agents and even renter rep­re­sen­ta­tives are tak­ing a more cir­cum­spect view.

Lind­sey Burne is the Di­rec­tor of LJ Hooker Dick­son and LJ Hooker Wo­den, and noted his agency would not be an early adopter of the ser­vice.

“We want to watch with some cau­tion to see how this plays out in the next 12 months.”

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