Tasmania’s Tenants Union wants slice of rental bond interest

More than 47,000 bonds are held by the Rental Deposit Authority, and generating millions of dollars in interest, the Tenants Union says. Here’s how they would like some of that spent.

Tasmania’s renters’ bonds generate more than $2.6m in interest.

As its caseload increases each year, the Tenants Union in Tasmania wants increased funding for its vital advocacy services – including more of the $2.6m interest paid on renters’ bonds.

When moving into a rental property, renters are required to pay bond of four weeks’ rent which is held by the Rental Deposit Authority during the tenancy.

At the end of the tenancy, the bond is returned to the renter or part of it paid to the landlord.

Tenants Union principal solicitor Ben Bartl said the Rental Deposit Authority held 47,736 active bonds totalling $68.6m as at July 2024.

He said the interest accrued on the bonds held for the 2023–24 financial year was $2.6 million, an increase of $614,000 on the previous year.

“It is 100 per cent renters’ money. The Tenants’ Union receives $280,000pa from the State Government but $2.6m is added to State’s coffers through the interest accrued from renters bonds,” Mr Bartl said.

“Renters are missing out on the advocacy they need whilst the state government pockets the surplus.

“We strongly believe that tenants’ money should be used to fund advocacy services such as ours, particularly given the fact that we receive the least funding of any tenant advocacy service in Australia.

“Our funding has not kept up with demand, with telephone advice increasing by 30 per cent and our casework increasing by 40 per cent over the last five years.

“A recent review found that renters in Tasmania receive the least funding per rental household of any tenant advocacy service in Australia and even if our funding was doubled we would still be below the national average.”

Ben Bartl principal solicitor Tenants Union of Tasmania. Picture: Nikki Davis-Jones

Mr Bartl said as at June 30 last year, the Rental Authority had processed 15,981 bond claims, including disputed claims.

The Tenants’ Union receives $280,000 a year from the state government and $215,000 in federal funding.

A recent submission to the Review of the National Legal Assistance Partnership noted that Tasmania received $7.63 per rental household from the state and federal governments, whereas in Queensland it is $14.95 per rental household, in the Northern Territory $16.34, NSW $16.46 and Victoria $19.08.

“The state government is not pulling its weight,” Mr Bartl said.

“Over the last five years, demand for our service has increased with the number of cases going to court increasing by 40 per cent and telephone advice increasing by 30 per cent.”

A Government Spokesperson said the Residential Tenancy Act 1997 limits how security deposit interest can be used.

“Security deposit interest becomes part of the funds of the Rental Deposit Authority, which can only be used in the performance of its functions and exercise of its powers,” he said.

“This means the interest earned on security deposits cannot be used to fund the Tenants’ Union of Tasmania.”