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Storey & Gough issues its clients with a regular newsletter which highlights developments which have taken place in the firm. Our latest issue can be viewed below:
August 2015

The rental bond money process: Some things tenants should know

One of the general requirements for tenants is the payment of a rental bond before moving into a property. Once the bond is paid, the money will then lodged with the appropriate state or territory body and the amount of bond will generally be no greater than four weeks rent. The purpose of a rental bond is to cover any costs that may be incurred by the landlord if a tenant fails to pay rent, or there is damage to the property. However, beyond the payment of the bond, there are a number of other aspects relating to bond money that this piece will cover.

The bond

Lodging the bond: either the real estate agent or the landlord must forward the money to the relevant body that holds the bond money within 10 business days. In the event that a bond is not lodged, the agent or landlord may be fined. Upon receiving the bond, the relevant body will provide details of the bond money to the tenant with an advice slip, and a rental bond number. For tenants who have not received the advice, they should contact the relevant state or territory body requesting the advice.

Third parties cannot act as guarantors: landlords cannot ask any family members or friends of a tenant to act as guarantors, or put the names of family members or friends, who are not intending to reside in the property, on a tenancy agreement in order to make the person liable for any debts that a tenant may incur. Such actions are illegal and we can turn to s 160(1) of the Residential Tenancies Act 2010 (NSW) as an example:

“(1) A landlord, landlord’s agent or any other person must not require or receive from a tenant or another person anything other than a rental bond as security for any failure by a tenant to comply with the terms of a residential tenancy agreement.”

One agreement per property: tenants should be aware that for each agreement, only one rental bond is required, or for successive agreements. Additionally, if there is an increase in rent, the agent or landlord cannot ask for more money reflecting the increase in rent.

Getting your bond money back

At the conclusion of the tenancy, the tenant will be able to claim back their bond money and any interest that the bond money has attracted. However, tenants will only receive their bond back if:

  • there is no rent in arrears;
  • they have provided proper notice that they intend on vacating the property;
  • they have vacated the premises in a similar or better condition when compared to the beginning of their tenancy allowing for fair wear and tear;
  • they have not broken the agreement in such a manner that costs the landlord money.

It should be noted that the property must be inspected by either the agent or landlord, and a condition report is to be completed in the presence of the tenant at a mutually agreeable time after termination of the rental agreement. If either the agent or landlord does not complete an inspection at an agreed upon time, it may be a good idea for the tenant to complete an inspection report themselves in the presence of a witness, and any documentation should be signed and dated.

Disputes in relation to the rental bond

If a dispute arises in relation to the rental bond, the tenant can make an application to their state or territory fair trading body requesting a return of the bond without the signature of either the agent or landlord. Tenants should be aware that there are time requirements in the making of an application if there is a dispute relating to their bond, and they should check when an application for the return of their rental bond is to be made.