Renting your first apartment can be both exciting and filled with uncertainty. A landlord will likely require you to pay a rental bond prior to you moving in, and this is to for security to ensure that you comply with the terms of your residential agreement. If you do not abide by these terms, the landlord will keep your bond in case work is required on the property. This Legal Kitz blog will cover all you need to know about rental bonds.
What is a rental bond?
A rental bond is a form of security which is paid by a tenant to their landlord or agent. For residential properties, this is usually four to six weeks of rent and is a one-off payment. These bonds can be lodged via post, handed over in person, or paid at an approved Australia Post. An official number upon receipt will then be issued which can be relied upon for future enquiries and any landlord or tenant who delays the submission of this bond may incur financial penalties. For the duration of the rental agreement, a tenant’s bond will be held at the relevant tenancy bond authority depending on the state or territory as follows:
- Australian Capital Territory – Office of Rental Bonds
- New South Wales – Office of Fair Trading
- Northern Territory – Department of Justice
- Queensland – Residential Tenancies Authority
- South Australia – Residential Tenancies Fund
- Tasmania – Rental Deposit Authority
- Victoria – Residential Tenancies Bond Authority
- Western Australia – Department of Commerce’s Bond Administration Section
What if I cannot afford rental bond?
If a tenant cannot afford a one-off, upfront payment for their rental agreement, they may be able to:
- enter an agreement with the landlord to pay off the bond in instalments over time. This may still be subject to a final date when all payments are agreed to be completed; or
- take out a bond loan. This is subject to the relevant bond loan criteria and eligibility in each state.
When do I get my rental bond back?
Usually agreed on by terms and conditions, this bond will be returned to the tenant by cheque or direct deposit after their tenancy has ceased and they have moved out. This requires an agreement between the landlord and tenant, usually subject to the condition of the property, and is documented through a signed refund form sent to the relevant tenancy office. It will usually take a few days for this refund to return to your bank, but if it takes longer, your landlord or property manager should make efforts to ensure your bond is returned as soon as possible. You can also lodge your own bond return through your state’s tenancy authority to speed up this process provided that your landlord agrees to the release.
Note that there are many forms of tenancy where you may find yourself living with multiple people. If a co-tenant moves out, you may need to submit a change of bond arrangement form signed by all parties in order to refund the departing person’s bond and lodge a new tenant’s bond. It is also possible for tenants to transfer their bond from a current rental to a new property provided that all parties involved agree. This is achieved in a bond transfer form with agreement from the tenant, and past and future landlords with any additional funds required.
To make sure these processes occur smoothly, a few things should be completed to receive a rental bond refund. This includes having a bond clean, a vacant inspection, ensuring all outstanding funds are paid off and making sure an exit condition report on the property is completed. If the property is in the same condition as the entry report, you may avoid completing an exit report. Remember that a bond is a security in case these things aren’t achieved, so you will only get the bond returned once the landlord knows that everything is empty and in good condition for the next tenant.
Why is my bond not being refunded?
Tenancy laws vary slightly between states but understanding your obligations as a tenant under a tenancy agreement is equally as critical to being refunded your bond.
If the property manager finds that the premises has been left in a poor condition, they may decide to hold onto some or all of your bond depending on what needs to be done to restore the good condition of the property. Even a benign reason which is caused by laziness can be mistaken for improper use of the premises. Also, if a property manager determines that you have poor rental behaviour or payments then it is likely that your bond will be withheld.
Here are some common things that are forgotten when completing a final bond clean:
- Fans and filters;
- Ovens and dishwashers;
- Pet-related dirt;
- Mould;
- Gardening maintenance; and
- Minor damage marks on walls and floors.
If a tenant does not receive their bond return because of extensive damages or substantial finances owed, enough that a bond will not cover the full costs, the denial for this refund is likely to be the least of your problems. A substantial breach of your rental terms and conditions may find you blacklisted on a national tenancy database. You may eventually be taken off this, but while on it, most private real estate will never approve you as a tenant.
Your landlord needs to have proof to withhold your bond. For example, if they have claimed you still owe them rent, they will need to supply ledgers/bank statements to prove it. But this also means you may need to provide proof that they shouldn’t withhold your bond refund if you are denied. If a bond refund was refused because your landlord or property manager is unfair, mean or discriminating against you, there are some actions you can take to regain your bond and good rental history back.
What to do if your landlord is withholding your bond unfairly?
If you disagree with your rental bond being withheld, and you need to dispute your bond refusal, the process of dispute will differ depending on your state. Below are the following organisations across Australia that deal with bond disputes:
- ACT: ACAT
- NSW: Fair Trading NSW
- NT: NT.GOV.AU
- QLD: Rental Tenancy Authority (RTA)
- SA: SA.GOV.AU
- TAS: Consumer, Building and Occupational Services
- VIC: Consumer Affairs Victoria
- WA: Department of Mines, Industry Regulation and Safety
To make sure you get your bond back through these agencies, it is vital to provide evidence that you have completed your obligations as a tenant. The following list some key tips to getting your bond back:
1. Keeping records
As a tenant, you should keep track of all the email chains, any rental services and copies of your entry documents. Even a phone conversation may provide evidence that you have followed your obligations and can shield yourself in an area of dispute.
2. Don’t make alterations without permission
Even minor ‘alterations’ can take substantial costs out of your bond.
Something as simple as putting up picture hooks can mean losing part of your bond to cover the cost of patching and painting holes in the walls. And in a 2012 decision, a NSW tenant who built a backyard veggie patch using railway sleepers, lost $1,500 worth of bond after the landlord claimed the cost of returning the garden to its former condition. As a rental tenant, don’t change anything unless you have written permission from the landlord and if you do receive permission, keep a copy of this as evidence to rely on later.
3. Hiring a bond cleaner
To make sure every corner is ready for inspection, hiring a bond cleaner is a great way to ensure a lazy mistake will not result in a poor rental history. Usually if there are any problems with the clean, the cleaners will come back to amend these and can liaise with the property to manager directly to ensure everything is completed. Your landlord can organise this, but organising it yourself will allow to research, compare quotes and get the best deal so that you are getting the maximum amount of money back from your refund. It is also important that you keep the receipt of this bond clean to show your property manager so they know you have completed your obligations as a tenant and have no reason to withhold your bond for a poor cleaning attempt.
4. Completing an entry and exit condition report
Having a completed entry and exit report is a substantial piece of evidence which shields you from false or unreasonable allegations of property damage or alteration. To achieve this, it is important you take photos and double-check any differences. This can also allow you to find any differences that you missed, fix them up and be approved.
5. Keep track of payments
It is crucial to keep track of weekly/fortnightly/monthly rental payments on your end to compare with your landlord’s records. That way, if they try to claim that you still owe them money, you can cross-reference with your own records to confirm. If your records show that you are, in fact, paid up to date – you can provide this information to your property manager or landlord and clear up any confusion. In any case, you can request a rental ledger to see how much money is owed or paid, and when.
6. Know your rights
Above all else, make sure you understand your rights as a tenant before you move into a rental property. Know what leg you have to stand on and what your responsibilities are. Understand the difference between wear and tear and damage. Always pay your rent as scheduled and, above all else, just be a good tenant. If you always do the right thing, there should be nothing that can be misconstrued or used against you.
Legal advice
In a rental market with record-low vacancies and lots of competition, you should be doing everything you can to make yourself an ideal tenant. This means not having a poor rental history that will raise concerns when approving you for tenancy. If you have any further questions about rental bonds or apprehensions surrounding a rental dispute, Legal Kitz is here to help with any concerns you may have! Book here now for your free consultation.