New changes to the Residential Tenancy Act 2010 are coming into effect as of the 30th January 2017 that it is now mandatory for all private landlords and agents to be registered with Rental Bonds Online and must now invite tenants to lodge their rental bonds using the system.
Rental Bonds Online is an online service from the NSW Department of Fair Trading that helps helping tenants, agents and private landlords to lodge, manage and refund bond money easily and securely.
This is a welcome change to the industry that will look to rule out any ongoing misuse of bond money. We have previously discussed the risks and occurrence of the misappropriation of bond money with agents getting into hot water due to bond theft. By introducing the mandatory lodging of tenant’s bond money, the State will look to crack down on any instances of foul play involving bond money.
Creates a more streamlined bonds process
Setting up your account is a straightforward process with bond money quickly and easily transferred using BPAY.
Tenants can manage their own bond returns
The system enables clients to see the status of their bond lodgement and return at a glance.
Less double handling
Less double handling of funds from the tenant to the agency then the agency disbursing funds from their trust account. There is less room for error and less hands in the pie.
With tenants paying their bond direct it creates a more transparent process with less likelihood of issues down the track.
LOOKING ON THE BRIGHT SIDE – TRANSFER OF RISK
For those Agency Business Development Managers, familiarising yourself with the new laws before they come into effect will demonstrate to potential clients your understanding and uptake of current legislation.
Invite your tenants to use this service to demonstrate your dedication to business best practice. It confirms to your clients that they should trust an agent with looking after their investment so the risk is transferred.
KEEPING TRACK OF YOUR COMMUNICATIONS
Especially in the early days when the new laws are coming into effect and people are adapting to the new system, it is wise to maintain records of all communications with your clients inviting them to the new system.
Keep track of emails and communications in your Property Management Software to ensure you are covered down the track should any issues arise of future claims placed by the tenant.
Not complying with the new changes come January 30th will see you hit with a pretty hefty breach.
If a landlord or agent or fails to invite a tenant to lodge their bond using RBO, prior to accepting a bond will be found guilty of breaching the Act and a penalty of $2,200 will apply.
Fill out the Registration Form to sign up as a managing agency. RBO will email your log-in and information on how to invite your tenants to the new system.
In conclusion, familiarise yourself with the changes and the system before January 30th. Be sure to fully inform your new tenants of the new procedures from February onwards.
- Information for Tenants – Rental Bonds
- Fact Sheet for Managing Agents – Rental Bonds Online
- Agency Registration Form – Rental Bonds Online
If you find you still have questions about the new system, visit the NSW Fair Trading FAQs.
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~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 19 years industry experience. Don’t trust just anyone with your trust accounting. Trust End of Month Angels and get back to what you do best – growing your business.