A world-first technology is hoping to make renting more accessible to trustworthy Australians.
Fintech company Traity has launched Trustbond, powered by landlord insurance company Terri Scheer.
Trustbond helps tenants to rent a home and provide security to their landlord without freezing their savings in a rental bond.
It helps landlords to determine a person’s suitability as a tenant whilst providing landlords with the same level of protection as a traditional cash bond.
Traity measures trustworthiness using online data including networks, ratings and reviews from Facebook, Twitter, LinkedIn, Airbnb, eBay and Uber to determine a tenant’s TrustScore.
Once eligibility has been established, the tenant pays an upfront fee that is a percentage of what a conventional rental bond would cost.
For example, a traditional cash bond might require a tenant to pay $2000.
With Trustbond, the tenant might pay a much smaller fee of around $250 for the term of the lease that still covers their landlord for $2000, freeing up $1750 for the tenant.
The inspiration for Trustbond came from Traity CEO Juan Cartagena and his own experience of renting property.
As a new resident of the United States with no local rental or employment history, landlords were requesting rental cash bonds of up to US$14,000.
“Trustbond recognises a person’s digital profile as an asset, putting money back in tenants’ pockets to spend on the things that matter to them,” Traity country manager, Will Soutar, says.
“It allows people who may have an unconventional working life, such as freelancing, or who have no rental history, greater access to the property rental market.
A traditional bond is a large sum that is tied up for the duration of the lease.
Soutar says Trustbond allows tenants to pay a relatively small fee upfront to cover the protection their landlord requires.
“In addition to the financial incentives, Trustbond is a better way for tenants to show who they really are. It’s a way to build stronger relationships between tenants, landlords and property managers based on trust.”
Carolyn Parrella, Terri Scheer insurance executive manager, says there were key incentives for landlords to choose tenants who are eligible for Trustbond.
“Trustbond is based on the premise that good online citizens will also be good tenants. Only tenants with a high TrustScore are eligible,” Parrella says.
“Trustbond gives landlords and property managers the ability to rate and review tenants. This encourages tenants to be responsible and motivates them to take care of their landlord’s property, in order to keep their TrustScore high.
“These benefits can be achieved with the same level of protection as a conventional cash bond.
“Trustbond covers the same breaches of a tenancy agreement including unpaid rent, damage, broken leases and associated costs, without the need to go to a tribunal.
“Owning a rental property is a significant investment. We want to take the stress out of investing for landlords, support tenants to feel trusted and remove barriers to entry for renting.”
Trustbond is being launched in South Australia and will roll out to other states in the coming months.
In time, Traity plans to donate one in 30 products to people who have experienced domestic abuse, to help them move into safer accommodation.