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09-09-2008

Government sitting on $5.7 m in unclaimed rent bonds

NZHERALD

Landlords and tenants have left $5.7 million in unclaimed bonds with a Government department.

The money, paid by tenants to landlords at the start of a tenancy, has been building up for the past 19 years and has left officials who administer the bond scheme with an unexpected windfall.

If a rental property has been properly looked after and the rent is paid in full, tenants should get their bond money refunded after they move out.

Most bonds are refunded but the unclaimed money has accumulated because landlords and tenants have either forgotten about it or decided not to reclaim it, a situation officials said might be the result in many cases of a dispute.

The Department of Building and Housing said the money had been gradually accumulated.

Matt Radley, the department's senior media adviser, said the funds were well-invested and helped to foot the bill for the Government's extensive tenancy services.

"The value of unclaimed bonds as at August 31 was $5,781,941.85, which has been accumulating since 1989. However, this figure is likely to increase following further assessments and transfers. The department is receiving a return of 8.77 per cent on unclaimed bonds," he said.

Asked about the fund's potential to snowball, Mr Radley said the department did not forecast growth in unclaimed bonds.

A tenant representative body wants to get some of the money.

Helen Gatonyi of the Tenants Protection Association (Christchurch) said her organisation was community-funded and would be able to operate better if it got some of the bond money or its interest.

Mr Radley firmly rejected this and said there were no plans at present to use this money to fund the Tenants Protection Association.

"However, interest from the residential tenancies trust account is reinvested in a range of services for tenants and landlords administered by the department.

"These services enable landlords and tenants to meet their obligations with the aim of reducing the need for dispute resolution support.

"These services include tenancy advice, mediation services, bond management and awareness-raising education programmes."

He said the Residential Tenancies Amendment Bill, introduced to Parliament in May, would help the department to return unclaimed bond money to tenants and give it the ability to advertise the names of people entitled to unclaimed bond money.

Bond rules:

Landlords get bonds from tenants.

Bond can be a month's rent or less.

Bonds are repaid if all goes well.

Landlords use bonds to cover damage.

Bonds can also be used for unpaid rent.

Asked about the fund's potential to snowball, Mr Radley said the department did not forecast growth in unclaimed bonds.

A tenant representative body wants to get some of the money.

Helen Gatonyi of the Tenants Protection Association (Christchurch) said her organisation was community-funded and would be able to operate better if it got some of the bond money or its interest.

Mr Radley firmly rejected this and said there were no plans at present to use this money to fund the Tenants Protection Association.

"However, interest from the residential tenancies trust account is reinvested in a range of services for tenants and landlords administered by the department.

"These services enable landlords and tenants to meet their obligations with the aim of reducing the need for dispute resolution support.

"These services include tenancy advice, mediation services, bond management and awareness-raising education programmes."

He said the Residential Tenancies Amendment Bill, introduced to Parliament in May, would help the department to return unclaimed bond money to tenants and give it the ability to advertise the names of people entitled to unclaimed bond money.

Bond rules:

Landlords get bonds from tenants.

Bond can be a month's rent or less.

Bonds are repaid if all goes well.

Landlords use bonds to cover damage.

Bonds can also be used for unpaid rent.

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