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34,000 bonds unclaimed

Nearly $6 million of unclaimed bond money is sitting in a bank account with the Department of Building (DBH) and could be returned to tenants if a bill goes through Parliament.

Tuesday, September 9th 2008, 12:00AM 4 Comments

by The Landlord

At the start of a tenancy landlords can ask for a bond up to the equivalent of four weeks' rent. That money is returned when the tenancy ends and there are no disputes or damages which need to be settled.

However, over the past 19 years 34,166 bonds with a value of $5.78 million remain unclaimed.

DBH, which administers the scheme, says there are a range of reasons why the bonds may not have been returned.

It says the unclaimed money sits in the bank earning interest.

At the moment the department has no way of proactively attempting to contact the owners of the unclaimed bonds.  

However, the Residential Tenancies Amendment Bill, introduced to Parliament in May, will give it the ability to advertise the names of people entitled to unclaimed bond money. If advertising is unsuccessful, the bill will allow the department to request address information of tenants owed unclaimed bond money from the Ministry of Social Development.

The money, strictly speaking, belongs to tenants and is being held in trust by the department. It only becomes the landlords’ money if they make a claim for it which is agreed to by the tenant or upheld by the Tenancy Tribunal.

It is not compulsory for landlords to ask for bonds, but if they do the money must be held by the Bond Centre. The large majority of landlords ask for bond, but Landlords.co.nz understands that quite a few landlords with multiple properties don’t ask for bonds.

Under the law they can request bond equivalent to four weeks' rent. Previously the average bond was around two weeks, but that has increased to be close to the equivalent of three weeks rent.

It says the average bond today is $597 and average unclaimed bond is only $169. This suggests a lot of the unclaimed ones are very old.

DBH says it currently has 420,989 active bonds to the value of $251.73 million. This money is held in the Crown’s consolidated account earning interest. DBH then uses money from the investment to run its services including the Tenancy Tribunal, which addresses complaints between landlords and tenants and for its education programme.

DBH recommends that landlords ask for the maximum amount of bond.


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Comments from our readers

On 8 September 2009 at 1:17 pm Maggi said:
Wondering if it is usual for a property manager to charge a managment fee out of the bond money. Our rental was left a state of disrepair and us out of pocket. The arbitrater told us we could claim our bond money back but we were charged a 71/2 %fee by the property managment company.
On 20 December 2010 at 12:41 am Parveen Kaur said:
Hi There, I had given my property maintenance to Cen21 and my previous tenants left the property with some damages to my property and also they stole the hot water cylinder from my property. i filed a report inthe police station but in vain. I asked Cen21 to claim the bond money but they took no interest didn't co-operate at all to sort the matter out. I have no contact details of the tenants as well. Is there any possibility to claim the bond money for the damages and the theft happened in my property?
Regards
On 11 August 2011 at 4:34 pm chris donkin said:
you can not afford to charge any less than four weeks bond to protect the property owner plus the first weeks rent in advance
On 20 August 2011 at 2:08 pm Kaye Baldock said:
Good Morning

Can you please advise if there is a list of unclaimed bonds that are now in the public domain.

thank you.
Regards
Kaye Baldock
Commenting is closed

 

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China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
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Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
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Heartland Bank - Reverse Mortgage - - - -
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HSBC Premier 8.59 - - -
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ICBC 7.85 7.05 6.69 6.59
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Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
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Resimac - Specialist Clear (Alt Doc) - - 8.99 -
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