Taking a rental bond from a tenant is an important security measure for a rental property owner.  The taking and holding of a bond, however, is a highly legislated area and there are rules that must be followed.  In this article we’ll cover the main things you need to know about rental property bonds.

What is it?

A rental bond is a security deposit paid at the commencement of a tenancy.  The bond is paid back to the tenant at the end of the tenancy, provided there is no money owed for damages, rent or other related costs.  It is not mandatory to take a bond, however, it is strongly recommended to do so to protect your interests as the property owner.

How much bond can be taken?

For general residential tenancies, if the rent is below $700 per week, the maximum bond is an amount equal to four weeks of rent.  If the rent is higher that $700 per week then the amount can be negotiated between the parties, with there being no maximum legislated amount.  In this case, we still recommend an amount equal to four weeks of rent.

How is it kept?

The bond is collected by your rental property manager and submitted to the Residential Tenancies Authority (RTA) in addition to a Form 2 Bond Lodgement Form.  It must be lodged within 10 days of receiving it.

Returning of bonds

When a tenant exits a property we conduct an exit inspection to assess the condition of the property in terms of cleanliness and any damages.  We discuss any issues with the tenant and will usually provide them with an opportunity to fix, replace, repair or clean the items noted.  We can then return the bond to the tenant or make a claim on all or part of the bond to cover any damages or required works and also to cover any outstanding invoices or rent owing.

Where a claim is made on the bond, by either the tenant or the Property Manager without signed agreement from the other party, there is 14 days to dispute the claim otherwise the funds are releases as per the bond claim form.