Page 4254 - Week 12 - Tuesday, 24 October 2017

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Treasury and Economic Development Directorate, before they can be accepted by landlords in place of a bond.

The regulatory requirements will henceforth be subject to statutory instruments and not require further legislative changes, allowing the government and the commissioner to respond to the flow of events in the market and any potential loopholes or evidence of exploitation as they arise. This bill also has retrospective effect so as to ensure that it covers the market from the outset.

The government will be able to require commercial guarantees to include certain terms by making regulations. The commissioner will have to consider those terms in deciding whether to approve a bond guarantee contract. The commissioner will also be able to set conditions on the grant of an approval. Whatever individual rules the government puts in place, they will be guided by the principle that no commercial guarantee situation should result in the lessee being in a worse financial position than they would have been in the default bond payment scenario.

For example, the government may decide as part of the requirements that tenants will not be liable for further payment to a landlord if their bond is claimed for damages beyond the gap between the initial fee that they have already paid for the bond guarantee product and the amount in damages owed, up to the amount paid to the landlord. The government may also decide to regulate the exact specifics of any proposed repayment plans, including the period length and interest rate.

It is important to note that Housing ACT already has an excellent bond loan program that is both generous in its financial provisions and comprehensive in its eligibility criteria. Housing ACT currently offers an interest-free loan of up to 90 per cent of the total bond amount to people who wish to access the private rental market, and $100 of that can be offered as a grant which does not require repayment, depending on income and asset assessments.

To ensure that people have financial certainty, which is also critical for those on lower incomes or whose work hours fluctuate, Housing ACT has a pre-approval period of 90 days for prospective tenants under the loan program so that they can be ready for any property that they are given the okay for at any given moment. Once a property is secured and the tenants have moved in, Housing ACT will transfer the loan to the Office of Rental Bonds themselves and provide a generous three-month grace period before the small repayments need to commence. The bond loans offered are interest free.

The program is not just available to low-income earners like students. It is available to middle-income earners as well, subject to a means test. The introduction of a bond insurance scheme in this bill is not so much about filling a gap in the current market, because the ACT government already has a rental bond scheme; it is about improving consumer choices and making sure that those choices are properly regulated.

This bill will facilitate the direct debiting of traditional bond payments and an online system of bond payments as well. This will be a significant improvement from the

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