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‘Smart’ Rental Bonds are almost here. Here is how it will work. 

Home News ‘Smart’ Rental Bonds are almost here. Here is how it will work. 
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‘Smart’ Rental Bonds are almost here. Here is how it will work. 

The portable rental bond system was a NSW Labor election commitment, and after a long time in the making, it is – almost – finally here. 

The NSW Government’s new ‘Smart Rental Bonds’ system is designed to remove the need for tenants to pay a second bond before receiving the first one back. In principle, it enables a tenant’s existing bond to move with them from one tenancy to the next, easing a major upfront cost when relocating. 

Here’s how the process, managed by NSW Fair Trading, works in practice: 

  1. Tenant initiates the transfer through their Rental Bonds Online account when they are preparing to move.  
  1. The new tenancy is set up and the tenant nominates that their existing bond will be reused.  
  1. The previous bond is assessed. Any claims by the landlord or agent on the old tenancy are resolved first.  
  1. The remaining bond amount is transferred directly to the new tenancy.  
  1. Any shortfall is paid by the tenant, or any excess is refunded.  

This system reflects what tenant advocates, including Shelter NSW, have long pointed out. Moving homes is expensive and puts significant financial pressure on tenants. This is even more difficult when people have been forced to move rather than by choice. Portable bonds recognise a simple but important principle that bond money is the tenant’s money, held in trust, and not an other sort of additional fee to be paid to access housing. 

While portability reduces the need to find large sums up front, charging tenants to access their own bond risks undermining the reform. Shelter NSW is disappointed to see that a fee has been introduced to use the Smart Rental Bonds system. For low-income renters, even modest additional costs can create barriers to moving, especially in urgent situations. 

There is a strong case that system improvements of this kind should be funded publicly, not through ‘user pays’ charges on tenants. The benefit of portability should not be offset by new costs imposed, with the most impact on those least able to afford them. 

Smart Rental Bonds is a welcome – though minor – reform, but its success will depend on how fairly it is implemented. Keeping costs down and maintaining the principle that bond money belongs to tenants will be critical to ensuring the system delivers genuine relief.