Bond Basics: 5 Things You Need To Know

By Anika Legal | Thu 17th March '22

Bonds Basics

If you have ever rented a property before, you’ve probably had to pay a sum of money upfront before moving in. This is called a bond.

This article will cover:

  • What is a bond?
  • When do I pay a bond?
  • Why do I pay a bond?
  • Where does my bond go?
  • What do I do at the end of my tenancy?

Key takeaways:

  • A bond acts as a guarantee to your rental provider that you will follow the rules set out in your rental agreement
  • Your bond will typically be paid after you have signed your rental agreement, and before you move in
  • Your rental provider should submit the bond to the Residential Tenancy Board Authority (RTBA) within 10 business days of receiving it
  • The RTBA hold onto the bond for the duration of your tenancy
  • If there have been no issues or disputes throughout the tenancy and you leave the property in the same condition you found it in, your bond money will be returned to you upon moving out
  • If your rental provider does keep your bond money, they should show that they’ve taken necessary care to keep the costs to a reasonable amount
What is a bond?

So, what actually is a bond? A bond is like a security deposit that is paid to the Residential Bond Authority (RBTA), and can only be used to cover liabilities such as unpaid rent, damage to the property and other matters. It is typically around four weeks’ worth of rent and it is paid upfront, before moving in. Where there is more than one tenant, it is typically divided evenly between tenants of a property.

Why do I pay a bond?

A bond essentially acts as a guarantee to your landlord that you will follow the rules set out in your rental agreement. This ensures that if you or your guests cause any damage to the property, or you miss paying certain bills or rent, then your rental provider can recover these costs and is not left out of pocket.

When do I pay a bond?

Your bond will typically be paid after you have signed your rental agreement, and before you move in. Before paying your bond your rental provider must give you a copy of the condition report of the property for you to check before or immediately after moving in. You need to return the report to your agent or landlord within 5 business days of moving in.

Completing a condition report
Where does my bond go?

Once you have paid your bond, by law, your rental provider must lodge the bond with the Residential Tenancy Board Authority (RTBA). They'll hold onto the bond money for the duration of your tenancy.

The RTBA will send you a receipt with your 'bond number' once they've received it. You can use this bond number to search for your bond on RTBA’s website.

Your rental provider has a legal duty to submit your bond to the RTBA within 10 business days of receiving the bond. If you do not receive a bond receipt from the RTBA within 15 business days of lodging your bond to your rental provider, you should notify the RTBA.

What do I do at the end of my tenancy?

Typically, at the end of your tenancy, if there have been no issues or disputes and you leave the property in the same condition you found it in, your bond money will be returned to when you move out.

Your rental provider can only claim your bond for certain reasons. To minimise the likelihood of them trying to claim your bond, you should:

  • Notify your rental provider of any deterioration in the conditions of the property due to fair wear and tear as soon as you notice it, and ask them to repair it;
  • Ensure there is no outstanding damage caused to the property by you or your guests when you leave;
  • Ensure that you do not take any goods that belonged to the property upon leaving, such as washing units or curtains;
  • Ensure that you leave the property reasonably clean;
  • Ensure that any changes that you made to the property throughout your tenancy were made with permission and, if the conditions of the permission required it, revert the changes;
  • Ensure that you have paid all unpaid bills that you may be owing to the rental provider; and
  • Ensure that you have no unpaid rent owning.

Your rental provider cannot claim to pay for repairs that are ‘fair wear and tear’ of the property that have occurred over time while living there. Examples of this would be faded curtains or worn carpets.

With that said, if your rental provider does keep your bond money, it is their duty to show that they’ve taken necessary care to keep the costs to a reasonable amount.

Additionally, after your tenancy has finished, you have the right to attend a final inspection with your rental provider while they complete an exit condition report. This can be useful for peace of mind, ensuring that you both are on the same page when it comes time for your bond money to be returned or claimed.

What should I do next?

Whether you or your landlord are trying to negotiate the amount that is paid back at the end of your tenancy, we can guide you through the steps involved. Contact us today to get started.

We last updated this page in March 2022. Please remember that this is only legal information. If you're thinking about taking action, you should chat to a lawyer for advice about your situation first.

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