Rental bonds, also known as security deposits, are used to protect landlords from the tenants who break their tenancy agreement. They can also protect the rights of tenants by ensuring that their deposit is returned if they meet their obligations.
Here are some reasons why rental bonds are important:
Protects Landlords – Rental bonds protect the landlords from the tenants who damage the property, don’t pay rent, or breach the tenancy agreement.
Protect tenants’ rights – Rental bonds ensure that tenants receive their deposit back if they meet their obligations.
Encourage tenants to comply – Rental bonds can encourage tenants to comply with the tenancy agreement.
Help maintain a good living environment – In strata properties, rental bonds can help ensure that tenants follow the rules and regulations.
In New South Wales, the maximum rental bond that can be charged is four weeks’ rent. The bond must be deposited with the NSW Rental Bond Board.
The Residential Tenancy Agreement says:
61. The tenant agrees:
61.1 to pay the rent on or before the day which the term of this agreement begins; and
61.2 not to apply rental bond towards payment of the rent without prior written consent of the landlord.
Sometimes we find tenants stop paying rent as soon as they lodge their intention to vacate. This is a breach of the Tenancy Agreement without the Landlords prior written consent. The tenants’ assumptions are that there will be no claims on the Bond by the Landlord or Agent. This is impossible to know until the Bond Inspection is completed.
The Bond Inspection should be done together as soon as possible once the tenant is satisfied that they have met their obligations. The Landlord or Agent must invite the tenants to attend the inspection.
The entry condition Report is needed to complete the Bond Inspection. Tenants are not liable for Fair Wear & Tear. Any disputes about how the Bond is disputed are ruled on by the Tribunal. Either party can lodge a claim with the Tribunal.
Please give Steve Arnold a call if you would like to discuss the contents above. Steve has over 35 years of experience in Residential Property Management.
(02) 4969 2600 | 0419 947 980 or mail@arnoldproperty.com.au
