Time to get down to the nitty-gritty financials – the rental bond. So what is it, and how does it work? Are there options if I can’t afford to pay the bond right away?
A rental bond is a payment that is requested on behalf of owners from a signing tenant as financial protection in case there’s a breach of the lease agreement. You typically pay a bond to a landlord or property manager before you move into your new house.
So how does the bond work?
The bond requires an official document to be prepared, which is then deposited in an approved ‘bond trust’ managed by each state government or approved financial institution.
It is the responsibility of the landlord or property manager to lodge the bond lodgement form and money with the relevant state department. Make sure you obtain a receipt for your bond.
The amount of the bond is specified in the lease document and the maximum can vary from state to state. The equivalent of four weeks’ rent is common practice, plus an additional amount in some cases where pets or furnished properties are involved.
You will normally complete a bond lodgement form. The bond money is then lodged into a joint account between you and the landlord, which normally accrues interest for the term of the tenancy.
Your rental bond will be released at the end of your tenancy, where you may receive a full or partial refund.
Rental bond facts
- In most states, rental bonds are up to four weeks rent, but in VIC, QLD, SA and WA there are variations
- Your bond payment is required at the start of a tenancy
- The bond must be lodged with the state bond authority (except in the NT)
- Agents do not receive any commission on the rental bond
- If you have a pet, pet bonds may also be charged in some states
- At the end of your tenancy, an exit Property Condition Report will be conducted. Costs for repairs required (other than what is considered ‘fair wear and tear’) may be deducted from your returned bond
- If your property is not found to be cleaned to a ‘reasonable standard’ the cost of a clean may also be deducted from your returned bond
What if I can’t afford to pay the rental bond straight away?
Rent.com.au’s research reveals a key insight: One of the biggest struggles renters encounter in the moving process is coming up with the rental bond.
Paying a few weeks in advance, combined with the burden of hefty moving costs can be a stretch on many budgets, especially when the bond hasn’t yet been returned from a previous rental.
Expanding the family or moving to a more expensive suburb can induce stress when combined with unwanted financial frustrations like paying the rental bond. Many renters simply prefer to save their money for other things in the moving process.
Queensland renter Donna Sooalo was in the process of moving home when she came across rent.com.au’s product RentBond. Looking for immediate financial assistance, RentBond, an easy and innovative way to have the bond paid upfront with 3, 6 or 12 months to pay it off, fit the bill.
“It was great timing,” Donna said. “RentBond was easy to apply for and saved me an enormous amount of hassle financially while I moved from one place to the next. I’d recommend RentBond to anyone who finds themselves in a similar situation going forward.”