Photo Courtesy: Jacob Sobi collected from Unsplash
The rental bond is a part of most of the rental agreements. However, there are a lot of people who do not understand how rental bond works. There is huge confusion and question amongst the renters about rental bond money and rules about its distribution. In this article, I am trying to explain the rental bond and legal rights of the renters (tenants) and rental providers (landlords) around it.
1. What is the Rental Bond?
At the start of a tenancy, if you are asked to pay money as a deposit, that is called the rental bond. It is a form of security, in case you will have a dispute with your rental provider at the end of the tenancy over damages caused to the property or cleaning or unpaid rent. Australian rental laws dictate that if you pay a bond it must be held by the bond authority until your tenancy ends.
According to the new rental laws in Victoria, the rental provider cannot ask you to pay a bond which is more than one month’s rent, if your rent is $900 per week or less.
In Victoria, if the rental provider is asking you for a bond, he/she must strictly comply with the following legal requirements:
complete and sign a bond lodgment form;
give the form to you to sign at the time you pay the bond;
give you a copy of the form. you should also ask for a receipt, especially if you pay by cash;
lodge the form and your bond money with the Residential Tenancies Bond Authority (RTBA) within 10 business days. You should receive confirmation within 15 business days. If you don’t receive the confirmation, please contact the RTBA on 1300 137 164;
give you a signed condition report, either electronically or two paper copies before you move in.
2. How do you get your rental bond back?
As a renter, if you have paid all your rent and left the property in good, clean condition when you move out, you should be able to get your bond refunded in full.
You can apply to the Authority (RTBA) to have all or part of your bond released after you vacate the rental property. The Authority will notify your rental provider of your claim. Your rental provider will have 14 days to advise whether there is an application before the Tribunal (VCAT) claiming repayment of the bond. If the rental provider does not let the Authority know in writing that the claim is subject to an application to the Tribunal, the Authority will repay your bond money.
If you have moved out of your rental property but haven’t got your bond back, you should apply to the Tribunal (VCAT) as soon as possible. There is no cost for applying for the return of a rental bond.
3. When can a rental provider claim the bond money?
A rental provider or agent can claim the rental bond in the following situations-
If you have caused damage to the rental property intentionally or by failing to take reasonable care;
If you have failed to return the property in a reasonably clean condition, the cleaning expenses can be claimed;
If you have abandoned the property;
If you have not paid your bills for the property;
If you have lost the goods that belonged to the rental provider;
If you have not paid the rent fully.
Rental providers cannot make claims for ‘fair wear and tear’ caused to the property. An example of fair wear and tear could be, carpets wearing out over a long time. A rental provider also has to mitigate loss. This means that if they are claiming your bond, they need to show that they have taken reasonable steps to keep the costs down.
4. How can you protect your rental bond?
Moving in: condition report and photos-
As per the rental agreement, generally, as a renter, you have 5 business days from the move-in date to complete and return your condition report. You should use this time to check your rental property thoroughly and include lots of detail in your condition report.
If you do not agree with what the rental provider has written about the condition of the property, make your notes in the condition report and add photos to establish your point. A detailed condition report and lots of photos can help you protect your bond against claims by the rental provider at the end of your tenancy.
You can also send a copy of your photos to the rental provider if you think there are substantial differences between the rental providers’ statements and your statements in the condition report.
Moving out: final inspection-
At the end of your tenancy, the rental provider, or their agent, completes an exit condition report. You have the right to attend the final inspection with the rental provider. You should take a lot of photos at the end of the tenancy inspection. It will help you to defend any claim of damage by the rental provider and ensure the refund of your bond.
5. What is fair wear and tear?
Rental providers cannot claim bond to cover fair wear and tear of the rental property.
Fair wear and tear is the deterioration of the property because of:
reasonable use of the property;
natural environmental forces.
Reasonable use of the property means use that most people would think is fair. The law does not define exactly what reasonable use is. If people cannot agree on what is reasonable, they can apply to VCAT to decide for them.
Examples of fair wear and tear are-
faded curtains or
worn kitchen benchtops or
worn carpet.
Ripped or torn curtains, or broken benchtops, might be considered damage.
If you need help with rental issues or tenancy law in Victoria or you need to find a property lawyer in Melbourne, who can help you with your rental dispute, please contact us on www.lawcircuit.com.au or call us at 0418361798 or email us at bonhi@lawcircuit.com.au
We will help you to find the appropriate legal services in Melbourne to solve your legal issues. We are here to make your legal journey easier.