Big changes for NSW renters as portable bond scheme begins

Starting today, renters in specific suburbs of New South Wales (NSW) can transfer their existing rental bonds to new properties, potentially saving thousands of dollars. The Smart Rental Bonds scheme, introduced by the NSW government, is now operational but is only available in Parramatta, Penrith, and the Central Coast at present. The scheme, delayed a year from the initial plan, aims to alleviate one of the financial burdens renters face when changing residences.

According to John Engeler, CEO of Shelter NSW, the need for thousands of dollars to pay a new bond can be a significant obstacle for low and very low-income renters. The Smart Rental Bonds scheme allows tenants to move their existing bond to a new rental property through an online portal, overseen by NSW Fair Trading. A $25 application fee is required for each transfer, and tenants must choose which bond to move and where to send it.

If the new bond is higher than the existing one, tenants must make a top-up payment. Conversely, if the new bond is cheaper, tenants receive a refund, provided no claims are made against the existing bond.

Landlords' claims against bonds will not change; they can still make claims for unpaid rent or property damage. However, the process will involve the government paying the landlord directly, and tenants must reimburse the government within 28 days. If tenants dispute a claim, it will be handled by NSW Civil and Administrative Tribunal (NCAT).

The government will only pay landlords' claims upon agreement with the tenant or an NCAT order. Initially, only renters moving into properties in Parramatta, Penrith, and Central Coast can use the scheme. Fair Trading Minister Anoulack Chanthivong emphasized the need for a gradual rollout to ensure the system's smooth operation and build trust.

The government initially aimed to launch the scheme by late 2025 but postponed it to mid-2026 for a smoother implementation.

While the Tenants Union of NSW welcomed the scheme, they criticized the $25 fee, arguing it disproportionately impacts low-income renters. However, Chanthivong explained that the fee is a small investment that can save renters up to $4,000, making it a worthwhile trade-off. Despite the fee, Engeler believes it is a manageable cost compared to the potential bond amount.