NSW has become the first state to allow tenants to electronically pay their rental bond straight to the state government, bypassing real estate agents, landlords and paper-based processes.
Innovation Minister Victor Dominello unveiled the state’s rental bonds online service yesterday following nearly six months of testing.
The system lets new tenants pay their security deposit by electronic funds transfer directly to NSW Fair Trading, which is the agency appointed to hold and supervise the money on behalf of tenants and agents.
Previously, payments had to go through real estate agents or private landlords, who were also in charge of getting the money back to departing tenants. The process for making the payments depended on how modern an agent's systems were.
“We are doing away with this cumbersome process by cutting out the middle man and enabling tenants to lodge their bond directly to NSW Fair Trading through an electronic transfer system,” Dominello said in a statement.
“The new scheme provides tenants with greater confidence that their bond money is securely held in trust, from the moment the payment leaves their account.”
The service will be accessible on a mobile device and will also give tenants a view of their rental history online, for use with future rental applications.
The government claims the online scheme has the potential to deliver savings of up to $20 million a year in reduced administration costs for tenants, landlords and agents combined. NSW Fair Trading currently processes roughly 540,000 paper-based bond deposits and returns every year.
More than 2000 agencies and private landlords have already put their hand up to use the online service during a pilot that commenced in July this year.
Paper applications will continue to be available for those who want to use them.