Ensure you never miss an issue of the
real estate business bulletin
PMs implicated in regulatory breakdown

PMs implicated in regulatory breakdown

by Elyse Perrau 0 comments

A new government bond authority could solve the “not uncommon” problem of tenants missing out on reclaiming their security deposit.

The Northern Territory government has released a paper that invites the public to comment on a proposal to establish a rental deposit authority.

The Northern Territory is the only state or territory that doesn’t have a central bond holding scheme, with some agencies pocketing the deposit, according to the paper.

“Tenants’ bond monies within the Northern Territory are currently held by landlords, or their agents, with the interest income generally retained by either the landlord or agent,” the paper said.

It added that the Commissioner of Tenancies only hears a small percentage of bond issues, but this is likely due to tenants not knowing their rights under the legislation.

“In such circumstances, the agent or landlord would generally be obliged to either voluntarily surrender the bond to the tenant, or failing that, the Tenancy Trust Account,” the paper said.  

“It is, however, not entirely uncommon for the landlord or agent to retain the bond.”

The paper said some property managers have also created problems by claiming the security deposit has been spent on repairs or in accordance with the direction of the owner.  

“While there may be some argument for such a response in some cases within the bounds of the agency relationship, this approach significantly undermines the effectiveness of the current system.”

The paper said that a rental deposit authority had been the subject of ongoing discussion for more than a decade.

The government is seeking comments and feedback on the operations of the proposals by 30 April.

[Related: Innovative bond makes payments easier for PMs]

 

PMs implicated in regulatory breakdown
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?