I just noticed the Bond Assist banner in the forum header above here. Do you have any experience? Good idea, bad idea? IIRC there was a similar bond-help service mentioned on PT a while ago - can't recall the name - and the sentiment here was quite negative. What do you think from the LL perspective?
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Having regard to my personality with reference to the RTA I have chosen to ask the moderators to remove the total content of this post and replace it with this text as time has passed and precludes my editing.
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Yip. Section 18A (1) is clear. I previously wrote to them and they say that they get around it by using the term "guarantee" as allowed in the RTA.
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"The s18A definition of "security" specifically excludes "any guarantee". S2 of the Act provides that "guarantor" means a person who guarantees the performance of the tenant's obligations, or who indemnifies the landlord against loss that he or she may incur in respect of the tenancy, or who assumes liability for the performance of the obligations of the tenant, and "guarantee" has a corresponding meaning. The definition of "person" in the Acts Interpretation Act 1924 includes a company...
Therefore re: comments above, the guarantor is a different person (a large insurance company). The beneficiary is the landlord and the guaranteed party is the tenant. Bond Assist is optional and is often presented to the landlord by the tenant as an alternative means by which to secure the tenancy. Of course the Landlord can reject this and insist on 'Bond' or the landlord can consider a combination of both Bond and a Guarantee or a Guarantee on its own.
"The Act does not permit a landlord and tenant to agree that the tenant will pay an insurance premium in lieu of a bond"
However, the Act permits a landlord and a tenant to agree that the tenant will procure a guarantee of it's obligations under a tenancy agreement. Bond Assist is a guarantee. It is procured by way of a fee as opposed to an insurance premium.
Bond Assist specifically provides a Guarantee for 5 weeks cover and as a Guarantee (not security as defined under the Act) cannot be considered 'Bond' by definition and therefore not capped at 4 weeks and not required to be 'paid' to the Department of Building and Housing.
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Im not sure I understand how this works?
The tenant pays your company $2.20 a week or what ever to be covered by the guarentee, however this guarentee is for insuring against dodgy tenants who do damage/ don't pay rent and yet we are suposed to trust they are paying you each and every week for the guarentee??
When they stop paying / bounce a payment etc what happens...
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Hi Meccachic. Thanks for the comment. The tenant pays a single upfront fee for the purchase of the Guarantee. (no weekly payments or premiums).
The Bond Assist Guarantee will cost the tenant 23% of the cover required i.e. if the weekly rent is $400 and you want the maximum of 5 weeks cover (in this case being $2000), then the tenant will pay $460 for the issue of the Guarantee. The amount of cover is flexible (1 week through to 5 weeks). The tenant only ever pays 23% for the cover needed.
Tenants are subject to credit checks etc
The Guarantee lasts for 3 years with an auto-renewal each 3 years so you remain fully covered.
At the end of the tenancy you can claim against the Guarantee by tenant acceptance or Tribunal Order.
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Having regard to my personality with reference to the RTA I have chosen to ask the moderators to remove the total content of this post and replace it with this text as time has passed and precludes my editing.Last edited by donna; 28-06-2013, 04:15 PM.
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Some landlords like it and some do not. It's your choice of course
"Tenant will procure a Guarantee"... simply means the section that talks about landlord and tenant negotiating the terms of the tenancy. Nothing in the Act prohibits the tenant from purchasing a Guarantee provided it is not "demanded" or "required". The purchase of a Guarantee is not "key money"... not "outgoings". It is an optional way of providing additional security for a tenancy in addition to or in place of traditional bond.
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"Tenant will procure a guarantee"
Nothing in the Act prohibits the tenant from purchasing a Guarantee provided it is not "demanded" or "required"
It is an optional way of providing additional security
18A (1)
11 (3)
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1. Bond Assist takes the form of a guarantee rather than an insurance product. To a certain extent it parallels in concept to a typical on demand bank guarantee.
2. S18A of the Act, introduced in 2010, provides that a landlord must not require security other than a permitted bond. "Security" is defined as "any interest in property or the power to exercise the right of the tenant including the authority to cause an account to be debited or the means to obtain money from a third party"
3. However, S18A of the Act specifically excludes a prohibition on guarantees. By implication the Act permits Landlords to obtain guarantees in respect of tenants obligations. Bond Assist is a Guarantee and therefore on the basis of S18A permitted under the Act.
See definitions etc above.
I will comment on 11(3) shortly
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Having regard to my personality with reference to the RTA I have chosen to ask the moderators to remove the total content of this post and replace it with this text as time has passed and precludes my editing.Last edited by donna; 28-06-2013, 04:16 PM.
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Why would you refuse them the tenancy? Why would you not accept 4 weeks bond lodged with the DBH if the tenant does not want to buy Bond Assist?
Bond Assist is an alternative that should not be demanded or required (as previously stated). Anyway in most cases it is the tenant asking the landlord to accept Bond Assist.
For a 'newbie' it's pretty easy. a) 4 weeks bond with DBH or b) Bond Assist .... as the tenant is buying the Guarantee... let the tenant choose?
Our product has been reviewed by various law firms and it does not breach the law as you state above.
I see that you also offer Guarantees. Interesting
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Originally posted by NZG View Posta) 4 weeks bond with DBH or b) Bond Assist .... as the tenant is buying the Guarantee... let the tenant choose?
Did I miss something or did I read that correctly?
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Having regard to my personality with reference to the RTA I have chosen to ask the moderators to remove the total content of this post and replace it with this text as time has passed and precludes my editing.Last edited by donna; 28-06-2013, 04:26 PM.
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