Renting Basics - Rental Bond Fact Sheet

Renting Basics - rental bond fact sheet_Blog

What is a rental bond?

A rental bond is money paid by the tenant to the landlord or agent at the start of a tenancy agreement. It is a form of security that is held at the local bond authority for the duration of the rental agreement. It is paid in addition to rent or rent in advance.

For residential properties you can be asked to pay between four and six weeks bond depending on what state you are living in.  It is a one off payment.

Bonds can be lodged in person at the real estate agency, ask them about their payment processes. You will sign a form on the day you pay and be issued with an official number soon after (you will receive a payment receipt on the day). This number will be used for all future enquires you have regarding your bond.

If a co-tenant moves out, you will need to submit a change of bond arrangement form in order to remove the departing person, you will be responsible for refunding them any money, as the bond will now be in your name. All people involved must sign the form before submitting it to the relevant office. In the case of wanting to add a new tenant to the bond, you will need to enquire with the landlord or your property manager as to their process, in many instances the new tenant will be asked to submit a tenancy application form for approval.

How much bond can be taken?

Usually the bond payment will consist of four weeks rent, for unfurnished premises. In some states once your rent is higher than a certain figure, this amount can be increased.

When is a bond taken?

A bond can be taken only after the prospective tenant has been approved for the property, it is usually paid when signing the lease agreement.

What happens once bond money is taken?

When the bond, is received by the property manager, it is sent to the local Bond Authority within the legislated time frame for that state or territory and held in a trust account for the period of the tenancy. After five to 10 working days, a receipt for the bond is sent directly to the tenant with a rental bond number. Upon vacating the property, a form is filled out by the property manager to refund the bond money where the tenant has not breached their tenancy agreement.

Tenants should be aware that the rental bond must be in the form of money and not a written guarantee.

How to get your bond back

A good guide to work from to ensure you get a full bond refund is ensuring all rental payments & invoices are made up to date (check your “rent paid to” date) Also review the condition report you signed when you moved in – the property should be returned in the same or better condition than when you moved in, less wear and tear. If you are unsure, please enquire with your Landlord or Property Manager.

The simplest action to make sure your landlord is satisfied at the final inspection is to keep things clean and well-maintained from the beginning. It's easy when you start a tenancy to put cleaning on the back burner, safe in the knowledge that you'll have time for it later.

Keeping a clean household, whether you're living alone, with family or in shared accommodation, only becomes more difficult when you neglect it. If things get out of hand, you can bring in professional cleaning help. The costs of household services however - which have risen almost 2 per cent in the last year - can add up, leaving you opening your wallet just to try and get money back.

Follow your tenancy agreement

For better or worse, everything required of you is laid out in your tenancy agreement, the legal document you signed at the beginning of your stay. Before scheduling your final inspection, carefully go through your agreement, checking off your obligations.

In some cases there will be conditions that differ between tenancies, so make sure to read everything carefully, following the agreement to the letter. Your opinion on whether your carpets need steam-cleaning is irrelevant - if you agreed to it, it's your responsibility and you must follow through.

Refunding the rental bond

Once you have agreed with your landlord or property manager regarding how the rental bond will be refunded, a signed refund form must be submitted to the relevant government office. Typically, bonds are credited by cheque or direct deposit.

In cases where the tenant and landlord disagree on how the bond should be refunded, one party must submit a refund form to the relevant government office. The office will then notify the other party and begin the dispute resolution process. The situations are often mediated at the local tribunal or court and if mediation doesn’t resolve the issue, the tribunal or court will hear the matter and make a decision.

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