An ASX-listed insurer has teamed up with a Spanish start-up to provide an ever rising number of renters with an alternative to stumping up for a costly bond at the beginning of a tenancy.
The tie-up between
Suncorp Group and online reputation company Traity will see the insurer offer a surety bond called Trustbond to landlords via its Terri Scheer landlord insurance network.
Suncorp is preparing to offer the product to tenants to enable them to pay a premium, which is a proportion of the rent paid for the term of the lease, instead of a traditional bond that can often be worth thousands of dollars paid upfront,
Australian Financial Review reported. Through the product, a renter paying a $2,000 bond would instead pay a one-off fee of $250 that would cover the same breaches of a tenancy agreement, including unpaid rent, damage, broken leases, and associated costs.
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Trustbond measures the potential trustworthiness of renters through the use of blockchain. It uses data from social networking sites, such as Facebook, Twitter, Linkedin, Airbnb, eBay, and Uber, to determine a tenant’s TrustScore.
Juan Cartagena, Traity chief executive, said South Australia is the only state in the country that has tenancy laws that allow for such an option.
“Currently it is a no-go in Queensland and the law is unclear in NSW, so we are getting further legal advice. We hope to get an agreement from the authorities because Trustbond will help people access affordable housing,” he told
AFR. “Some tenancy laws have not caught up to the changing demographics where more people are renting, but we believe that this can change.”
Louise Dwyer, EGM of global partnerships at Suncorp, said that for many people, “renting is the new normal,” and being able to help these people use their capital in a different way is a “huge advantage” for their customer base.
“It [Trustbond] helps to make the rental market that much more affordable and we can use the data to make different decisions about lending criteria in the future,” Dwyer told
AFR.
According to the most recent census, Australians who own their own home dropped from 32.1% in 2011 to 31% in 2016. By contrast, people renting rose from 29.6% to 30.9% in 2016.
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