Landlord basics: how do bonds work?
A rental bond is a sum of money – usually equating to four to six weeks’ worth of rent – paid by tenants upon commencement of their tenancy agreement. It provides financial security for the landlord in the event that a tenant breaks any clause of the rental lease, which could include damage to the property or unpaid rent.
A tenant’s bond is held by the Residential Tenancy Bond Authority that exists in each State or Territory and remains with them for the duration of the lease. Upon termination of the rental agreement, your property manager undertakes a ‘final inspection’ of the property to ensure that no breaches of the contract have occurred.
If no issues are identified, you and your tenant are seen to ‘agree’ on the condition of the property, and their entire bond will be refunded. If there are repair issues highlighted, your property manager will contact your tenants and explain the estimated cost of any damages or negligence.
The tenant may accept or dispute this decision using a dispute resolution request - and if no common ground can be reached, the bond claim may be sent to the tribunal. This process can be costly and is bound to strict time limits, encouraging landlords and tenants to resolve their issues through their property manager directly.
Sounds complex? Worry not: contact our experienced property managers who will guide you through the bond resolution process should an issue occur.