Rental community startup, Snug.com, today welcomed the release of draft new ACT regulations enabling it’s recently announced product BondCover. BondCover swaps an old-fashioned cash rental bond with a certificate of guarantee, backed by Snug and IAG (Insurance Australia Group).
BondCover provides the same protection as a bond by guaranteeing that the owner will be paid for a valid claim under the lease. BondCover retains the same bond claim process, rights, and obligations for renters and owners. Claims up to $500 are settled within 2 business days and from $501 to the Bond Amount paid within 5 days.
“With 1 in 3 Australian’s now renting, Snug is on a mission to make renting easier so we’re delighted at the progressive approach the ACT to our BondCover innovation.” “The current cash rental bond system is completely outdated, inefficient and unfair. It’s time for Australian Governments to handback $4 billion dollars in cash rental bonds” said Butterworth. Renters can purchase BondCover for around 5 per cent of the face value of the rental bond, and are provided with a certificate of guarantee to give the owner or agent to replace a cash bond. So, a current renter with a $2000 bond could obtain BondCover for around $100 per annum, and receive their $1900 cash back. BondCover was conceived when Snug research on nearly 2 million bonds uncovered that 99 per cent of renters do the right thing: around 80 per cent of rental bonds are refunded without claim, around 19% per cent is largely negotiated then resolved between parties and of the 1% that head to the Tribunal the large majority of renters pay. Butterworth himself also spent time mapping the renting journey and discovering the financial and emotional stress experienced when renting.
“I’ve rented 6 times over 12 years in Sydney without claim, why do I still pay thousands of dollars in rental bond cash?” he says. In building its platform, Snug also conducted extensive legal and actuarial research, and engaged with numerous state governments. Its focus group research on hundreds of renters found that renters are most concerned about their rental reputation and ability to rent their next property, driving their good behaviour. “Snug’s BondCover product has been designed to comply with existing rental tenancy legislation and relevant financial services and insurance regulations. BondCover is a win-win-win for renters, owners and agents. BondCover is good news for rental affordability, and it’s a stimulus to the economy with strong consumer benefits,” continued Butterworth. “The world has changed since the cash bond system was established decades ago. It’s 2017, we have the technology to better manage identity, reputation, and recourse to create a more efficient securitised rental bond system. The days of the cash bond are over,” concluded Butterworth.
Snug received over $400,000 in BondCover applications in the first 8 weeks following the launch 1 Sept 2017. For more information on Snug: www.snug.com
About Snug
Snug (www.snug.com) is delivering a housing as a service (HaaS) through a rental community platform that brings owners, renters, and property managers together by reimagining the renting journey, delivering lower cost and better value experiences. The outcome is a more transparent, respectful, fair, flexible, affordable, and efficient rental system for all Australians. When renting feels good, it’s Snug.
Justin Butterworth is available for interview. Please call 1300 14 7684 to arrange.