Rental Bonds Online (RBO)

 

RBO is a free service provided by NSW Fair Trading for the lodgement, management and release of NSW rental bonds. Changes to the Residential Tenancies Act 2010 (NSW) at the end of January 2017 made it mandatory for landlords and agents to register and offer RBO to tenants signing a new residential tenancy agreement.

Majority of agents working in the property management industry support the use of RBO, and if there is a bond dispute, agents will work with the landlord and tenant to reach an agreement before making a claim on the tenant’s bond. However, the implementation of RBO has come with one significant challenge that landlords and agents are facing.

Prior to Rental Bonds Online commencing, at the end of tenancy, agents would lodge a claim using the red “Claim for Refund of Bond Money” form which can be obtained from NSW Fair Trading. Most tenants were not aware that this form existed, and some tenants believed that it was the agents job to communicate with the rental bond board to release the bond back to them. However due to RBO being an online system, it allows the tenant to claim the bond immediately upon vacating the premises. This has caused an increase in bond disputes between landlords and tenants and has resulted in an increase in cases heard at the NSW Civil and Administrative Tribunal (NCAT).

Section 163 of the Residential Tenancies Act 2010 (NSW) allows a tenant to make a claim for the refund of their rental bond whether or not the tenant and landlord agree to the refund amount.

NSW Fair Trading, Service NSW and the Tenants Union of NSW readily provide information to tenants about how they can make a claim on their bond upon vacating the premises. If the tenant’s claim is the first one received by NSW Fair Trading, the managing agent will be emailed a “Notice of Claim”. The agent can then:

• agree to the claim, or
• within 14 days, inform Fair Trading that you’ve applied to NCAT for a hearing to dispute the claim, or
• take no action, and after 14 days the bond will be refunded as per the tenant’s claim.

Even though this process allows the agent to stop the bond from being paid to the tenant by applying to NCAT, it is a reactive response which costs the landlord tribunal costs and agent fees.

Agents keep asking us “How can we stop tenants from making a claim on their bond first?” Firstly, we must acknowledge that only a very small percentage of tenants will do this, and we cannot stop them as they have a right to claim their money. However, more and more agents are looking at ways to help reduce the number of bond disputes, which may also help with this issue.

For example, a new process can be implemented in your agency called an “End of Tenancy Consult”. This process is designed to assist tenants in achieving a full refund of their bond and is communicated to tenants in a positive manner from a good customer service perspective.

So how does it work? At the time a tenant gives or is given notice to vacate, the agent will book an “End of Tenancy Consult” with the tenant to be held at the property. The agent will conduct a brief walkthrough of the property with the tenant outlining what things the tenant needs to do before vacating the premises.

If you as the managing agent are demonstrating a proactive approach to assist the tenant before they have vacated the premises, there should be fewer issues as the tenant should feel a sense of trust and be more inclined to work with you to finalise their bond.