Yahoo Finance Landlord's 'ridiculous' $50K insurance proposal for Aussie renters
A tenant advocate isn't mincing his words over the controversial idea.
An Aussie landlord who suggested renters should take out $50,000 worth of insurance instead of a bond has earned the ire of tenants already battling a tight rental market and high cost of living.
"I would love to see a system where a guarantee was given by a tenant, similar to a bank guarantee, for say $50K, in lieu of a bond," the property owner said online. "These could be provided from an insurance company for a premium based on the length of the lease. A landlord could claim on this policy in the event of damage and/or non-payment of rent."
Tenant advocate Jordan van den Berg said the proposal was "ridiculous" and "absolutely nuts", and that it was essentially saying, "I'd like my tenant to pay for my landlord’s insurance".
"It's an investment property. Investments come with risks," he told Yahoo Finance, adding that housing was a human right.
"Buy your own policy. Don't get the tenants to do it. Tenants pay a bond already."
Renters and landlords slam proposal
In the proposal, originally posted in a Facebook group for landlords, the man said that if the tenant's guarantee was claimed against, it would "obviously be looked upon poorly by the insurer", adding that this would make things more difficult and expensive for a tenant to take on insurance for another rental property.
"Therefore it is unlikely they will be able to rent a property again. [A] Good incentive for tenants to tow [sic] the line!"
RELATED
The post received a mixed reaction from other landlords. While some argued rental bonds and landlord's insurance were sufficient to cover damages to their rental properties, others claimed $50,000 wouldn't go far enough, with one member suggesting bonds should actually be increased to three months' worth of rent from the standard one month.
Other landlords slammed the idea, saying there was no need for property owners to ask for coverage up to $50,000. "How about you keep your property maintained so you don't need to dip into a large fund of other people's money? I've claimed against a bond a few times but never ever anywhere near the full bond," one member commented.
The post later found its way to a group for Aussie tenants, where the landlord's suggestion sparked outrage. Several members said if they had that sort of money, they'd choose to buy instead of rent.
"We are renters, they think we have a spare $50K for them to steal from?" one asked rhetorically.
Van den Berg said the proposal would never get the green light because banks often wouldn't lend to buyers unless they had insurance on a property.
"It's an argument about nothing," he said.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.
