In November last year, the ACT government passed amendments to the Residential Tenancies Act to legalise “bond guarantees”. The amendments are to commence from May 7, meaning agents could ask renters to pay a third-party for a “commercial guarantee”, instead of lodging a cash rental bond. People who rent would have to pay a fee to this third-party company.

On the surface, this is good news. Instead of having to shell out thousands of dollars for a deposit, renters could pay a couple of hundred dollars and be done with the hassle of bonds.

But really, the only ‘innovation’ here is making renters pay for a product that is essential insurance for landlords.

Here’s what wrong with ‘bond guarantees’. Firsty, they require an annual fee. While a bond is a refundable deposit, these annual fees are money down the drain. And the fee isn’t a premium for insurance – renters are still liable for any payout for claimed damage to a property. So if you end up losing some of your bond at the end of a lease, you’re hit twice: the annual fee to the third-party, plus the loss of bond money to the landlord.
Second, they won’t give renters more choice. Canberra’s rental vacancy rate is currently 0.6% - for every 1000 rental properties only six are available for lease. If a landlord insists on a bond guarantee, applicants who prefer a bond and refuse have little chance of securing the lease.

It’s no secret that the way rental bonds are managed is a problem. Rogue agents do their best to hang onto bonds - money that doesn’t belong to them. Renters suffer when they have paid a bond for a new place while still waiting on the refund from their old one. Yes, bonds are a problem. So was the cane beetle. But bond guarantees are just another cane toad.

And for renters who might not have the upfront cash for a bond, the ACT government already offers no-interest bond loans. So rather than pay a fee to a profit-driven company, renters who struggle with bonds should consider getting in touch with Housing ACT.

Bond guarantees are part of a worrying trend of self-professed disruptors claiming to make life easier for renters when they are just serving landlords. Similarly, we’ve seen rent-bidding apps claiming to make it easier for renters to secure properties, even as they fan the flames of a red-hot rental market. But at a time when more Australians are locked out of home-ownership, people who rent don’t need disruption. We need change.

It’s not too late for the government to stop, think, and consult properly on these changes.

The simplest option would be for Gordon Ramsay, our Attorney-General, to specify that the amendments won’t commence until a later date. This would allow more time for regulations to be publicly scrutinised and for the government to listen to renters.

With more Australians renting, more companies are seeing an opportunity to profit. They say that they’re on the side of renters, while they whisper in the ears of property investors about more convenience and higher return on investment.

But more renters should mean that things get better, not worse. Instead of falling for the siren song of disruption, we should go down the path of countries like Germany and Sweden and make sure that renting is a genuine alternative to home-ownership – that renters have homes that are stable, affordable and liveable.

People who rent already have an app where we furiously compete with one another to try to get strangers to let us into their homes. It’s called Tinder. We don’t need another app. What we need is decent laws for decent homes.

Joel Dignam is the founder of Better Renting, a community of renters working together for stable, affordable, liveable homes.