What exactly is a Rental Bond?
Put simply, a rental bond is an amount of money paid to an agent or landlord prior to the beginning of a tenancy. The local bond authority holds this payment as security for a rental home, and held for the entire agreement. This payment can be made in addition to, or as an advanced rental payment.
Depending on which state you plan on renting in, anywhere between four and six weeks rent can be asked for upfront as the rental bond for a residential property. The rental bond is also a one-time payment and can be submitted to the real estate agent personally. Different agents may have different methods of bond lodgment.
Once paid, a receipt will be issued and a bond lodgment number will be provided to you after signing the necessary paperwork. You can use this number for any bond-related enquires you may have later on.
In the event that a co-tenant decides to move out, you will be required to submit notification of a change in the bond arrangement. The entire bond will be held in your name, and any part of their initial payment must be refunded. If you’d like to add someone else to the bond arrangement, you’ll have to discuss this with your property manager and undertake their necessary processes.
How much bond is usually required?
In most cases, four weeks rent is generally taken in order to secure a rental agreement. Some locations where median rents tend to be significantly higher, a six-week bond payment may be asked for.
When is the bond required?
The bond payment is taken after the tenant has been officially approved to rent the property. It is then paid at the same time the rental contract is signed.
What happens next?
After your property manager has received the bond, it is sent to the Bond Authority respective to the state you’ve applied in. The tenant receives a receipt between five and ten working days after payment. Once the tenancy agreement ends, the property manager is responsible for lodging release documents, so the tenant can be refunded. If there are no breaches in the agreement throughout the duration of the tenancy, the tenant will be refunded the full amount.
Otherwise, an appropriate amount could be deducted as compensation for repairs, etc.
Getting your bond back
One tip for getting back a full bond amount is to ensure all rental payments are up to date. Review the condition report and make sure that the property is left in at least the same condition that it was in when your tenancy commenced.
Keeping the place clean and undergoing routine maintenance yourself gives you the best chance of success when it comes to a bond refund. Ensure you abide by the terms in your agreement right from the beginning and you shouldn’t have a problem getting your bond back. Check off each responsibility as you review the agreement prior to the final inspection.
Remember, you must honour everything you agreed to in the agreement, regardless of your personal opinion. For example, you may not think a spare bedroom’s carpets need to be steam-cleaned if you haven’t used them often, however if this is included in the contract you still must organise to get them professionally cleaned.
Receiving the refund
Once you’ve sorted out how you will be refunded with your agent, a form is signed and submitted to the rental office for the bond to be officially released.
Sometimes the tenant and landlord may not agree on a method for the bond to be refunded. In this instance, the parties are notified of the situation by the rental office and a resolution process begins.
If this cannot be resolved through a mediation process, the matter will then need to be heard in court.