A rental bond is requested by landlords from a signing tenant(s) as financial protection should the tenant breach their lease agreement.
The bond requires an official document to be prepared which is then deposited in an approved ‘bond trust’ managed by each state government or approved financial institution. It is the responsibility of the landlord or property manager to lodge the bond lodgement form and money with the relevant state department. Make sure you obtain a receipt for your bond.
The amount of the bond is specified in the lease document and the maximum can vary from state to state. The equivalent of four weeks’ rent is common practice plus an additional amount in some cases where pets or furnished properties are involved.
You will normally complete a bond lodgement form. The bond money is then lodged into a joint account between you and the landlord, which normally accrues interest for the term of the tenancy.
In the event that there is no damage to the property over and above ‘normal wear and tear’ expected during the term of your tenancy, the bond amount is returnable to you. You will need to fill out some type of ‘bond release’ form.
A bond should only be drawn upon by the property manager or landlord to recover costs related to the end of a lease agreement.
If an agent or landlord needs to recover costs associated with the end of the lease, for example unpaid rent, or repair of damage caused by you, then only the exact costs associated may be claimed, with the remainder returned to you.
These costs are normally agreed between you and the landlord or property manager. In the event of a dispute, either party can submit a claim to the governing bond authority or nearest local court in your state with details of the claim, of which the other party will receive notice and a period in which to reply.
Nobody wants the hassle of a court proceeding, so it is best to first discuss this thoroughly and fairly with your landlord or property manager to try and come to an agreement.