Page 4256 - Week 12 - Tuesday, 24 October 2017
belongs. While we place great importance on working with innovators, we do not support innovation that does not take account of the impact on the vulnerable people in our community.
The products proposed to be regulated by the bill operate by a three-way contract between the landlord, the tenant and the company. Each product operates slightly differently but the end result of a claim is that the tenant will have to pay back any amount of money that has been paid to the landlord by the company. The company may engage debt collectors and may charge interest on the amount owing.
The products that this bill will regulate are relatively untested in the Australian rental market. We do not know the impact they will have and what consequences may flow from them. We do know that renting is at record highs and there are changing perceptions in our community about the role of renting in the housing market. Regulation plays an important role in maintaining a robust and fair market where there is otherwise a disparity in power between players.
The bill is structured in three schedules. The first schedule prohibits landlords from accepting an alternative rental bond product when entering into a rental agreement with a tenant. These products will be known as commercial guarantees under the Residential Tenancies Act.
Schedule 1 will be taken to have commenced on the day the bill was introduced, which was 14 September this year. This provides the space for the government to assess these products and to work with stakeholders to develop a regulatory framework for allowing them to operate in the ACT. I am pleased to advise the Assembly that this work has already commenced and that the organisations who represent vulnerable tenants have already engaged in the process. I thank these groups for the work that they do for our community and for giving this and other government processes so much time to ensure that Canberra is a community where no-one is left behind.
The Deputy Chief Minister discussed the government’s rental bond loan scheme. I would like to remind members of this scheme, as Mr Steel has also done. The scheme offers up to 90 per cent of the rental bond amount under a tenancy agreement. Bond loans are interest free, and they are paid back to the ACT government over 20 months, starting no later than three months from the date of the loan. People who qualify for a bond also receive a grant of $100 to assist with the costs of the new tenancy.
The second schedule of the bill provides that a landlord can only accept one of these products, known as commercial guarantees, if the product has been approved by the Commissioner for Fair Trading. The contract associated with commercial guarantee is described as a standard guarantee contract. The second schedule provides that a regulation may be developed setting out matters that the Commissioner for Fair Trading can consider when making their decision about whether a standard guarantee contract can be registered.