Page 3711 - Week 10 - Thursday, 14 September 2017

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Title read by Clerk.

MS BERRY (Ginninderra—Deputy Chief Minister, Minister for Education and Early Childhood Development, Minister for Housing and Suburban Development, Minister for the Prevention of Domestic and Family Violence, Minister for Women and Minister for Sport and Recreation) (10.42): I move:

That this bill be agreed to in principle.

I am pleased to introduce the Residential Tenancies Amendment Bill 2017. This bill provides for the regulation of alternatives for bond under the Residential Tenancies Act 1997 and makes necessary changes for the implementation of an online bond system.

Most lessors and tenants choose to have a bond in place when they enter into a residential tenancy agreement. These bonds are lodged with the territory via the office of rental bonds. This is a well-established practice and is familiar to most Canberrans. A similar process for bonds is followed around Australia. The Residential Tenancies Act 1997 does not actually require a bond to be lodged. It allows lessors to accept an alternative to a bond in certain circumstances. It is these alternatives that this bill seeks to regulate.

The government is aware of at least one company taking applications for a new rental guarantee product in the ACT. Any new ideas or commercial products aimed at improving housing affordability need to be well thought out. We need to make sure that these products do not run the risk of leaving people in a worse position and making the goal of secure housing harder to reach.

The government is regulating these new alternatives to a bond in two stages. The first phase will prevent lessors from accepting a commercial guarantee as an alternative to a bond. A commercial guarantee is a three-way contract between a lessor, a tenant and a third party. In this type of contract the third party undertakes to pay for damages caused by the tenant, like actual damage to property or unpaid rent. A commercial guarantee can replace the bond entirely or be a supplement to the bond. These changes are set out in schedule 1 of the bill. If the bill is agreed to by the Assembly, schedule 1 will be taken to have commenced today.

In the second phase lessors will be able to accept commercial guarantees but only if the standard guarantee contract has been registered with the Commissioner for Fair Trading. A standard guarantee contract is all the terms the provider of the commercial guarantee is going to put into the contract they offer to lessors and tenants. If a commercial guarantee is not registered it will not be able to be accepted by a lessor as an alternative to a bond. These changes are set out in schedule 2.

Schedule 2 also sets out the process for applying for the registration of a standard guarantee contract. The commissioner will have 30 days to consider an application and decide if it should be registered. If the commissioner approves a standard guarantee contract, the approval will go into a publicly available register. If the

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