Complete Guide to Rental Bonds in Australia for Renters

There is a lot to learn about rental bonds in Australia. Understanding the process and costs for lodging a bond, and claiming a bond refund is important to ensure you receive your bond back.

You should check with your local rental bond authority before agreeing and transferring a rental bond between a tenant and owner.


What is a rental bond?

Rental bonds have different definitions across Australia but essentially serve the same purpose.

The NSW rental bond definition is:

“rental bond” means an amount of money paid or payable by the tenant or another person as security against any failure by a tenant to comply with the terms of a residential tenancy agreement.

Bonds are not mandatory, bonds are optional in every state in Australia.

The rental bonds are managed by the rental bond authority in each state in Australia: NSW Rental Bond Board, Queensland Residential Tenancy Authority, Victorian Residential Tenancy Authority, South Australia Residential Bonds Online, Tasmania Rental Deposit Authority and Western Australia BondsOnline, and Access Canberra in the ACT. The Northern Territory does not have a bond board, simply bonds are held by the owner or agent.


Why is a bond needed?

A rental bond is a cash security to protect the owner against damage to the property or other valid amounts owing to the owner by the tenant at the end of the tenancy.

When an owner has a claim, this should firstly be resolved directly with the tenant. If there is no claim the tenant should receive a full refund of a rental bond.

Typically bonds are managed by the residential tenancy bond authority in each state.


Is a rental bond mandatory?

No, bonds are not required. However, nearly almost every residential tenancy lease agreement includes the payment of a rental bond.

Owners offering short term leases of up to 3 months typically would not lodge a bond, especially if the occupants are from overseas due to the complexity of receiving and returning the funds.


How much rental bond is required?

There is a limit to the amount of a rental bond that can be requested in most states. Typically this is equivalent to 4 weeks rental. If the weekly rental is above a certain limit eg. $350 per week, then some states permit a higher amount of bond.

NSW
  • Max 4 weeks rent can be taken as a rental bond
  • VIC
  • Max 1 months rent can be taken as a rental bond unless the rent is above $350 per week, then any amount take be negotiated between the parties. However, unless the property is furnished or a luxury home, the rental bond amount is usually 1 months rent.
  • QLD
  • Max 4 weeks rent can be
  • WA
  • 4 weeks rent

  • Unlimited if the weekly rent is over $500 or owner was living in premises for previous 3 months

  • $100 extra can be charged if tenant has cat or dog to cover fumigation
  • SA
  • Max 4 weeks rent if weekly rent = $250 or less

  • 6 weeks rent if weekly rent > $250
  • TAS
  • Max 4 weeks rent
  • NT
  • Max 4 weeks rent
  • ACT
  • Max 4 weeks rent

  • How is a rental bond paid?

    There are two ways in which a bond can be paid. Firstly to the property manager/real estate agent or the owner. The second method is to the Rental Bond Board (sometimes called the Rental Bond Authority).


    Can I pay bonds in installments?

    Bonds can be paid in installments through a bond loan company. Carefully consider the interest rate and full cost of the bond payment plan including any late fees.


    Where are rental bonds held?

    In most states the rental bond is paid to the Rental Bond Authority. In some states the rental bond is held by the property manager.


    What is the process for lodging a residential rental bond?

    Rental bond lodgement is completed either by paper and/or online. The timeframe of rental bond lodgement is regulated to ensure that bonds are lodged quickly (typically within 10 days or by the end of the month latest).

    The rental bond lodgement process is described across Australia:

    NSW
  • Online – Renters can choose from firstly, using the online Rental Bonds Online website to register and lodge their bond directly, bypassing the agent or owner.

  • Paper form lodgement

  • Bond lodgements and bond refunds are processed by NSW Rental Bond Authority.

    http://fairtrading.nsw.gov.au/

    Bond claim matters are heard by the NSW Civil and Administrative Tribunal.

    http://ncat.nsw.gov.au/
    VIC
  • Online – rental bonds can be lodged with the Rental Bond Authority

  • Paper forms
  • QLD
  • Paper forms only
  • WA
  • Online – only for agents

  • Paper forms – for tenants
  • SA
  • Online – via the rental bonds portal

  • Paper forms
  • TAS
  • Online – only to look up the status of your bond

  • Paper forms
  • NT
  • Paper forms – bonds paid to the owner or property manager
  • ACT
  • Paper forms – paid to the bond authority (Access Canberra)

  • What is the process for claiming a Rental Bond Refund?

    Getting your bond back should be straight forward, however in many cases bond returns take time because of the paper work, processing delays and uncooperative other parties.

    A tenant can claim for refund of bond money with the rental bond authority. Typically a signature is required from both parties approving the refund of rental bond.

    Check if ALL tenants on the lease are required to sign.

    Several states now have a residential rental bond online service. Tenants are able to lodge and receive a bond refunds online using the rental bonds online service. This online bond refund reduces the need for paper bond lodgement forms or refund bond forms.


    How long to Bond Refunds take to process?

    Depending on the State or Territory and whether the bond refund is by a form or by residential rental bonds online, tenants should allow up to 4 weeks for a refund, even if there is no dispute.

    Errors on the form with the bank details can result in delays.

    If property managers or real estate agents are required to lodge a claim in a timely way after you depart the property. Usually around 10 days. If the property manager takes too long, the bond claim may be invalid and you could receive a full refund of your bond.


    What happens if there is a dispute at the Tribunal?

    If an owner or agent is successful in their claim against a tenant, the consumer tribunal eg. NCAT or QCAT will issue an order on the matter. The order is passed to the Rental Bond Authority and the matter is settled.


    How can renters avoid bond dispute and receive a maximum refund of rental bond?

    Renters can minimise claims and ensure a full bond refund by doing three simple things: paying the rent in full during the tenancy, minimising any damage to reasonable wear and tear, and correctly lodging the bond through the proper authority.

    Before entering the property, take good photos and ensure the move in report is accurate.

    During your stay, report any repairs or maintenance required and damage that you cause. It’s better to get these fixed during the stay, than hold everything until the end.

    Before departing a property, ensure the property manager has conducted an outgoing inspection and provided you with a copy of the report. Check if there is any claim proposed. Try to confirm that there is no claim in writing by email as you depart.

    Usually good documentation and communication will avoid a bond dispute.


    What are the consequences for a bond claim?

    Around 20% of bonds are subject to a claim. More than half the rental bond claims are for an amount of under $300. If there is a bond claim, don’t panic and try to not get emotional, address the facts of the claim and communicate by phone or in person to quickly resolve the bond claim.

    If the claim is not resolved, you can take the matter to the tribunal. The tribunal may order a partial refund of rental bond.

    Many tenants choose to directly settle damage or arrears claims with the owner, to avoid a claim on their bond. This is to preserve their no-claim record with the rental bond boards.

    Most bond claims are for rental arrears, property damage and water bills.

    Directly settling bond claims between owners and tenants is the fastest and cheapest option. Pursuing a bond claim through the tenancy tribunal costs time and money for both parties.


    What about my housemate’s bond?

    Some property managers will require all tenants to be on the lease and similarly the bond lodgement form. Check carefully about the lodgement rules in your state.

    Some states will only pay out in equal proportions to all the parties on the lease. Other states will require only one party to be the beneficiary.


    How can sublet share households manage bonds?

    Bonds can be taken privately between individuals. Alternatively, they can be lodged with the rental bond authority.