A new rental bond subscription service, which has the potential to save tenants thousands of dollars as well as ease the demands on property managers, has been launched.
Instead of tenants being forced to front up a typically large security deposit when they rent a property, Bondable allows them to instead pay an ongoing subscription fee of $19.99 per month.
Bondable Founder Jeremy Hastings said the current bond process punished renters with good credit scores and solid rental histories.
“I think that the challenge of the existing ecosystem is that everybody pays this really heavy bond up front and you’re kind of punished for people being good,” Mr Hastings said.
“Around 92 per cent of bonds are resolved without any issue at all.
“So why do we have a system that essentially assumes a tenant’s a bad actor.”
Mr Hastings said the Bondable subscription service would be offered to quality tenants who passed a standard set of rental checks.
“Our view is, let’s trust tenants,” he said.
Bondable also helps both tenants and landlords at the end of the lease when the property is about to be returned to the rental pool.
Oftentimes, if there is a dispute between the tenant and landlord, the matter is forced to go to the tribunal, which can take weeks or even months to be resolved.
Mr Hastings said Bondable would manage any claims by the landlord or tenant and ensure payouts happen quickly.
They also offer a mediation service to help resolve any issues and look to keep matters out of the tribunal, which can also punish tenants even though they may be within their rights to dispute a claim.
He said Bondable could also dramatically cut down on the workload for property managers around bonds and maintenance issues.
“Agents can lodge a claim and use Bondable’s digital mediation service to efficiently offboard the tenant,” he said.
“In the meantime, landlords and agents can rest easy knowing Bondable will instantly pay the value of the claim, up to one month’s rent, while the claim is being mediated and settled between the tenant and landlord.”
Mr Hastings said they had been testing the product across Victoria and are now rolling it out more broadly, with NSW to follow in the coming weeks.
“I think what we learned over 18 months of testing was we needed to find a solution for tenants, property managers and landlords,” he said.
“With the objective of reducing the number of issues that end up in tribunals.
“So the time that we’ve taken to come to market with this product is really about solving for everybody’s problem, not just solving for one party.”
According to Mr Hastings, tenants continue to pay the ongoing subscription fee for the duration of their tenancy and there is no cap.
However, a tenant would need to lease a property for more than 10 years to reach the same level as a standard security bond.
“While traditional bonds still have an important role to play, we believe there is a clear need and rising demand for a new way to bond that says goodbye to hassle and hello to stress free renting,” Mr Hastings said.
President of the Real Estate Institute of Victoria (REIV), Jacob Caine said Bondable could significantly help property managers.
“Part of the appeal of the product from a property manager’s perspective is that in order to qualify for the product, you have to go through a fairly strenuous credit check,” Mr Caine said.
“Which means that the people that are going to use this product have got the means and the capacity to pay for it.
“That is an extra layer of accountability that doesn’t necessarily exist with the traditional bond system.”
He said the mediation service would also benefit property managers and tenants.
“It’s good for renters and it’s good for rental providers because you can go into a forum if there is a disagreement about what needs to be taken from the bond,” he said.
“There’s a space which doesn’t go into the realms of VCAT, which often takes forever to actually find a time and where decisions can at times be quite arbitrary.”
