Renters rejoice: the dreaded double bond dance is over

Moving to a new rental home in New South Wales just got a little cheaper, with the NSW Government announcing yesterday that its Smart Rental Bonds scheme is now available statewide. 

The service allows renters to transfer their existing rental bond directly into a new lease, with successful trials across select regions through the last few months.

This eliminates the need for renters to come up with thousands of dollars upfront for a new property while waiting for their old bond to be released.

What is a rental bond?

A rental bond is a security deposit paid when signing a new lease and provides financial protection for the landlord if a tenant damages a property, breaks the lease early, or owes unpaid rent. 

In NSW, bonds are capped at four weeks’ rent. They’re paid to and held by NSW Fair Trading, with the rules only allowing tenants to request their bond back after they’ve fully left the old property. 

With median rent in Greater Sydney at $750 a week, that means someone hoping to move between rental properties would need to have a $3,000 upfront deposit - a big cost that sits in the list of many other major expenses that are required when moving house. 

How does the Rental Bond Scheme work?

To use the service, renters will need to be moving within NSW, have no changes to the tenants and already have a bond in the Rental Bonds Online (RBO) system. The process would look like:

1. After a renter has applied for and been accepted into a new property, the new property manager will submit a request for the bond through the RBO system
2. The renter reviews and accepts the request, and pays:
3. • The $25 administration fee
   • Any additional bond required
3. The bond is then transferred to the new property
4. After the renter moves to the new property, any claim made by the old landlord for the bond is paid by the NSW government. If this happens, the tenant then pays any money owed to the NSW Government.

Do any other states offer this type of scheme for renters?

• Victoria: Offers a similar Portable Bond Transfer Scheme, with a $25 administration fee
• South Australia: Developing a similar service
• Queensland: Does not have an official service, but bonds can be transferred if both properties share the same landlord or property manager
• Western Australia: Does not offer a bond transfer scheme, but is the only state with a separate bond scheme for pets

No other states have this type of service in place yet.

Getting help with the bond

For many renters, getting the money together for a bond is often the major obstacle stopping them from moving to a new property. 

For those who are struggling, there is assistance from state governments, including options for interest-free loans. Eligibility criteria apply, including income limits.