Understanding Bonds in Rental Agreements: What You Need to Know

What exactly does it mean and how much can you be charged?

A security bond essentially acts as a prepayment made by a tenant to cover potential expenses they might be responsible for at the end of their tenancy. These expenses could range from damages to the property or its belongings, outstanding water bills, or unpaid rent.

When a tenant hands over the bond, it’s crucial for the lessor to provide a receipt right then and there. This receipt should include details like the names of those who made the payment, the amount, the date, and the address of the rental property.

It’s important to note that the bond belongs to the tenant and should be lodged with the Bond Administrator, typically Consumer Protection, until the tenancy concludes. If multiple individuals contribute to the bond, such as in a shared household, it’s vital that all their names appear on the lodgement form to safeguard everyone’s share. The Bond Administrator will then furnish the tenant(s) with a record of the security bond payment directly.

Now, what about pet bonds? If tenants are allowed to have pets capable of carrying parasites that may pose a risk to humans, a pet bond might be levied. However, it’s worth mentioning that an assistance dog cannot be subjected to a pet bond.

When it comes to determining the bond amount, there are some guidelines to follow:

For residential tenancies, the bond shouldn’t exceed four times the weekly rent, unless the rent surpasses $1200 per week.

In the case of long-stay tenancies in residential parks, the security bond must also not exceed four times the weekly rent.

Regarding pet bonds, they can only be charged if tenants are permitted to have pets that could potentially require fumigation of the premises upon tenancy termination. The maximum amount for a pet bond is capped at $260, regardless of the number of pets involved.

Lessors or agents are required to lodge the security bond as a single sum, specifying the portion allocated as a pet bond.

Lastly, some tenants may opt for bond assistance, wherein the Department of Communities steps in to pay the bond to the owner or their agent on the tenant’s behalf. This essentially acts as a personal loan from the Department of Communities to the tenant, facilitating their rental in the private sector. Bonds provided by the Department of Communities must be handled in the same manner as any other individual’s bond.

In summary, understanding the ins and outs of bonds in rental agreements is essential for both tenants and landlords to ensure fair and transparent transactions in the rental market.