Bond refund delays are escalating across New Zealand, leaving renters in a precarious financial position and raising questions about the efficiency of Tenancy Services following a major technology overhaul. What was once a typically five-day process is now stretching into weeks, and in some cases, over a month, impacting renters’ ability to secure new housing.
The delays stem from a “large” technology transition undertaken by the Ministry of Business, Innovation and Employment (MBIE) between and , shifting the bond refund system from a paper-based process to an online platform. While the intention was to modernize the service, the transition has demonstrably slowed processing times. Figures obtained by 1News reveal a significant decline in on-time bond returns. In , 98% of bond refunds were processed within the five-day target. However, last year that figure plummeted to 83%.
Specifically, saw 30,546 refunds (17%) taking longer than five working days, with 28,855 (16%) taking between six and ten days, and 1,691 (0.9%) exceeding eleven days. This represents a substantial increase from , when only 0.02% of refunds were delayed.
The financial implications for renters are considerable. Bonds, typically equivalent to four weeks’ rent, represent a significant sum – often nearing $1,000 – that many renters rely on to secure their next tenancy. Joe Mooney, a Wellington student, described the situation as causing “stress matched with dread and hope and expectation,” explaining he had to seek financial support from family while awaiting his refund. Chelsea Skinner, another renter, highlighted the difficulty of accessing funds quickly, stating, “They are thousands of dollars.”
The delays are not merely an inconvenience; they create a tangible barrier to housing mobility. Renters United President Luke Sommerville emphasized the vital role bonds play, stating, “Most renters are paying four weeks’ rent for their bond… They use that cash again for their next rental, like a pot of money. People can’t just pull $1000 out of thin air.”
MBIE acknowledges the problem. Paul Coggan, acting head of tenancy at MBIE, attributed the slowdown to the “bedding-in period associated with new processes and new channels.” The agency has reportedly increased staffing levels dedicated to processing refunds and is working to improve efficiency. Coggan stated that refund times had “significantly improved” in January , falling to six working days, nearing the five-day target.
Tenancy Services is currently advising customers to expect processing times of up to ten working days and encourages those awaiting refunds to check their email, including spam folders, for requests for additional information. The agency has also introduced automated self-service bond refunds for landlords and property managers, aiming to expedite the process for those utilizing the new system. However, the rollout to Property Management Software users is still underway.
While landlords haven’t yet reported widespread complaints, the New Zealand Property Investors Federation President Peter Ambrose noted that landlords are proactively informing tenants of potential delays. This suggests an awareness within the industry of the ongoing issues and a potential for further disruption.
The situation underscores the challenges inherent in large-scale technology transitions within government agencies. While modernization is often presented as a pathway to improved service delivery, the experience of renters awaiting bond refunds serves as a cautionary tale. The delays highlight the critical importance of ensuring a smooth transition and maintaining adequate resources to handle demand during periods of change. The financial strain placed on renters, particularly those with limited resources, raises questions about the adequacy of support mechanisms during these disruptions.
The long-term impact of these delays remains to be seen. However, the current situation is clearly creating hardship for renters and adding to the existing pressures within New Zealand’s housing market. The focus now is on whether MBIE can deliver on its promise of improved processing times and restore confidence in the bond refund system.
