What is a rental bond

You’ve found the perfect rental: three bedrooms, large windows with lots of light and a beautiful outdoor area to entertain. What’s even better is it is now yours to enjoy for at least the next 12 months. All you need to do now is sign the lease and part with a sum of money known as the ‘bond’. 

It is a practice we all become accustomed to when renting, but have you ever wondered what exactly the bond is, where it goes and who decides if you get it all back? 

What is a bond?

The bond is essentially a security deposit and is usually of similar value to one month’s rent. It is applied to provide financial security to the property owner against certain costs they may incur due to tenants. This could include late payment, excessive wear and tear or damage to the property caused by the leaseholder. The bond also provides incentive to you, the tenant, to look after the property and pay your agreed rent on time.

Top tip: A bond can be no more than the equivalent of four weeks rent and cannot be increased during occupancy.

Who holds the bond?

Rental bonds in Tasmania are held by a third party, this is the Rental Deposit Authority (RDA). In May 2019, the bond process was updated with a new system called MyBond. In the past it was necessary for tenants to visit a Service Tasmania Outlet to lodge their tenancy bonds with a bond lodgement form, now the whole process can be completed online.

If an agent is managing your new rental property, the agent will guide you through the finer details of lodging your bond. Your bond is able to be paid once the owner or / agent has completed the bond lodgement in MyBond. Once this has occurred you will receive a notification from MyBond prompting you to make payment for the bond.  Payment can be made either online through MyBond’s payment system, or at Service Tasmania Shop using your bond number. 

If you are dealing directly with the property owner it is worth noting that it is illegal for landlords to directly accept a bond payment from tenants. The owner instead needs to direct you to make your payment through the MyBond system.

The RDA will hold your money until the tenancy is complete.

Top tip: Create an email folder (or hard copy folder)with all of your essential rental information, including your bond number and lease agreement.

What if you can’t afford to pay the bond immediately?

Paying four weeks of rent on top of moving costs could weigh heavily on your budget, particularly if your bond from your previous tenancy has not yet been returned. You may have options, though.

If you are a low-income earner and don’t own any significant assets such as land or property, you may be eligible for housing assistance services, including Anglicare Private Rental Support Service (PRSS) or Housing Connect services. To learn more, visit www.anglicare-tas.org.au or www.dhhs.tas.gov.au

How can you protect your bond?

Once your tenancy has begun, you will review and complete a condition report. This report is important as it allows you to record the general condition of each room of your rental property when you first move in. Within two days of the lease commencing, you should record the condition of the property in as much detail and accuracy as possible and return one of the copies to the landlord or agent while keeping an additional copy for yourself. This information is essential as it can be used to assist in the case of a bond dispute when the lease has ended.

Ultimately, the bond belongs to you and it should be refunded in full unless the agent or landlord can prove that deductions should be made. If you look after the premises and continue to pay the agreed rent until the end of the tenancy, you should have no issues with receiving your bond back.

How do you claim your bond back?

Chances are, there will come a time when you want to move on from what you have come to call ‘home’. Once you have loaded up your car, vacated the property and returned the keys, your landlord or agent will inspect the premises and consult the original condition report to assess the final condition of the property. Within three days of vacating (and all keys returned), the property agent / owner must either refund the bond or start a claim through MyBond. If action has not been taken within the three days, the owner / agent must notify you of the reason for the delay.

If the property owner or agent is happy with the home or they want to make a bond deduction that you agree to, all you need to do is agree to the claim through MyBond. 

At times, it may not be that simple. If the agent or landlord wants to make a claim for the likes of damaged property or missed payments and you do not agree, you have 10 days to lodge a dispute through MyBond. If you do not lodge your dispute within 10 days, the bond will be paid out as claimed by the owner / agent.  

How is a bond dispute managed?

A ‘Bond Dispute Notification’ or ‘Bond Claim Notification’ will be issued. If all involved are unable to come to an agreement within 10 days, the Residential Tenancy Commissioner (RTC) will step in to investigate and determine a decision.

This conclusion could take up to 15 days and is based on the evidence provided, whether it is from one party or both. Evidence can include rent or cleaning receipts, ‘before’ and ‘after’ images, the lease agreement or any relevant correspondence. 

After the RTC has come to a conclusion, both yourself and the agent or landlord have seven days to lodge an appeal to the decision. If an appeal against the decision is not submitted, the bond will be paid based on the RTC’s conclusion. 

Top tip: Don’t forget to update your contact details inMyBond to ensure you continue to receive correspondence regarding the bond.

At the end of the day, a bond is put in place to protect the property owner from any negligence, but the money is ultimately yours. If you understand your lease requirements, look after the home and fix any issues as they arise, keep up-to-date with your payments, and accurately complete the condition report, it will help to ensure you get all of your bond back.

For more information, talk to Fall Real Estate’s friendly staff or visit www.cbos.tas.gov.au