If you have to ask the question, what does bond mean in renting, it’s important to read up on how it could affect your rental process.
Experience with paying a security deposit or some kind of upfront cash to ensure your commitment. Whether it’s to open up a new credit card or to guarantee a piece of property, bonds are an essential part of convincing lenders of your financial security.
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Importance of rental bonds
A rental bond is typically priced at four times your weekly rent. To give your landlord a sense of financial security, this security deposit is meant to ensure that there is no room to skip out on paying rent or not paying for property damage.
Luckily, if you have no problems throughout your tenancy, you will be returned your rental bond in full. The goal is to get back all that you put in!
What does bond mean in renting is a question usually asked by first-time renters. There are specific things you need to be aware of because of this so that you do not find yourself in a sticky situation.
Before paying your apartment bond or house bond, you should know how much you will be paying, how the bond is lodged, how to get your bond back, and exactly when to expect to get it back.
How much you will be paying
In normal circumstances, the bond you will be paying is four weeks’ rent. In Australia, though, this cost varies from state to state as well as the amount of rent that you pay.
In New South Wales, you can expect the rental bond to be priced at a flat four weeks’ rent. This is regardless of the specific rent amount.
Similar to New South Wales, in Tasmania, Northern Territory, and Australian Capital Territory, you would have to pay a flat four weeks’ rent, regardless of how much rent you pay.
When it comes to Queensland, though, they expect you to pay four weeks’ rent, which is negotiable if your rent is higher than $700 a week.
Down in South Australia, you would pay a rental deposit of four weeks’ rent if it is below $250 a week. If your rent is above $250 a week, you would have to pay six weeks’ worth of rent for your rental deposit.
How does a bond work?
At this point, you may be wondering, how does a bond work? The term that is typically used is lodging a bond, which means that your landlord needs to take your deposit to Consumer and Business Services (CBS) until the end of the tenancy unless there are claims for cleaning, outstanding rent, or other reasons for payment.
First, you will sign bond lodgment papers that are given to your by your landlord. These papers are meant to specify how much you will be paying and other details of the agreement.
Next, you will have to pay your bond. This will prompt the landlord to submit the money and bond lodgment papers to the bond authority in your territory or state.
By keeping it in this safe place, you and your landlord will be able to access the money once you are planning to leave. So, the question of what does bond mean in renting can essentially be equated to an insurance policy.
If your rental application was approved but you changed your mind, you’re still safe because no lease agreement was signed and you haven’t yet paid the bond.
How to get refunded
When you have finally found the answers to the questions ‘what is a rental bond’ and ‘what is a house bond,’ you can approach the process more knowledgeably. Not only is it an insurance policy for your landlord, but it is also a way to build trust and keep yourself accountable.
To do this, you must know the ins and outs of what you deserve out of your rental bond. This means that when you are prepared to move out, you should know what your property manager is looking for so that you can either refute or look for further explanation.
Knowing how to answer what does bond mean in renting is the first step. Keeping up with rent as well as being aware of any potential damages or issues that you’ve inflicted on the property is the next step.
If everything is in place and up to date, the bond should be readily released to you. Your landlord is responsible for signing the release papers online just like you are. 2-6 weeks is normally how long the landlord has to refund your rental bond.
If an issue has arisen, your landlord has the power to withhold money from your so that they can cover the costs. To dispute any claims, you can go through the tenancy tribunal specific to your state.
When are bonds refunded?
To ensure that you get your bond back in full, you can follow the proper legal procedures and finish up any necessary paperwork. If you complete a thorough entry report that lists existing damage, you are also setting yourself up for success. You can also research how much a bond clean is to know if you need to do the cleaning yourself or can hire someone else.
The question, what does bond mean in renting, is making sure you and your landlord are on the same page. To make sure of this, you can schedule an exit report to compare what was identified in the entry report versus the state of the property at your departure.
If all goes well, you can expect your bond back in four weeks. If there is a dispute or unfinished paperwork, these four weeks can be extended.
What to do in a conflict
Do not fret if things do not go extremely smoothly. You can always enlist the help of a tenancy tribunal, which is where you can share evidence to support your argument.
Always keep copies of receipts, paperwork, or anything else that your landlord is trying to hold against you. Preparation is key.
More on bonds in renting
What’s a holding deposit?
A holding deposit is a sum of money paid by a tenant to a landlord to reserve a rental property. It is also known as a good faith deposit or an application deposit.
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