Factsheet 03 [PDF]

As a tenant you have rights under the Residential Tenancies Act 2010 and Regulation. This factsheet explains the law in NSW about rental bonds.

About the bond

The bond is money you pay at the start of the tenancy as security in case you do not follow the tenancy agreement.

The landlord/agent can only ask for:

• a bond in the form of money (you cannot be asked for a written guarantee, for example)
• one bond for the one tenancy agreement.

The most bond you can be required to pay is an amount equal to 4 weeks rent (that is, the rent you agreed to pay at the start of the tenancy).

The landlord/agent cannot require you to pay more (or another) bond when the rent is increased or if a new tenant moves in under the original tenancy agreement.

You cannot be required to pay a bond before you sign a tenancy agreement.

Paying the bond

You can pay the bond:

• as a lump sum, or
• in instalments starting from when you sign the tenancy agreement – if the landlord agrees.

When you pay the bond, the landlord/agent must give you:

• a receipt for any payment/s you make – unless details of the payment are recorded in your tenancy agreement
• a 'Bond Lodgement' form with details about how much bond you have paid.

You and the landlord/agent should sign the lodgement form.

Help to pay the bond

The 'Rentstart' scheme can help people renting in the private market to pay the bond. Apply through your local Housing NSW office.

Deposit of the bond

The landlord/agent must deposit the bond with NSW Fair Trading (NSWFT). For lump-sum payments:

• a landlord must deposit the bond within 10 working days after it is paid
• an agent must deposit the bond within 10 working days after the end of the month.

For bond paid in instalments, the periods for depositing the bond vary according to how soon it is paid off. (Contact NSWFT for more information.)

Once the landlord/agent has deposited the bond, NSWFT will send you a deposit notice and a rental bond number. Keep these in a safe place with your tenancy agreement.

If you do not receive a deposit notice, contact NSWFT to find out if landlord/agent has deposited the bond. If the landlord/agent does not deposit the bond within the required period, they can be fined up to $2,200.

Change of shared tenancy

To change the names of the tenants registered for the bond, fill in a 'Change of Shared Tenancy Arrangement' form (from NSWFT). Have it signed by the outgoing and incoming tenants and the landlord/agent and return it to NSWFT. Note:

• At least one of the original tenants must remain in occupation for you to use this form.
• If any of the tenants used 'Rentstart' to help them pay the bond, you cannot use this form.
• Using this form does not mean that you are sub-letting to anyone else or transferring a tenancy to anyone else (see Factsheet 18: Transfer and sub-letting).

Transfer of bond

You can transfer your bond to a new tenancy if:

• the same tenants are all moving to the new tenancy
• the landlord/agent of the original tenancy agrees and they are not claiming any of the bond.

Fill in a 'Transfer of Bond' form (from NSWFT). Have it signed by:

• all the tenants named on the bond deposit notice
• the original landlord/agent.

Attach this form to the new 'Bond Lodgement' form.

You cannot transfer the bond if any of the tenants used 'Rentstart' to pay the bond.

Claiming the bond back

At the end of the tenancy, fill in a 'Claim for Refund of Bond Money' form (from NSWFT).

If you agree with the landlord/agent about return of the bond, sign the completed form and have the landlord/agent sign it. Return the form to NSWFT by post, fax or in person. NSWFT can deposit the money into your bank account or post a cheque to your new address.

If you disagree about return of the bond, you can still make a claim. Fill in the form with the amount that you want paid to you. You do not need the landlord's/agent's signature. Return the form to NSWFT.

NSWFT will give the landlord/agent written notice that you have made a claim. If the landlord/agent does not dispute it, NSWFT will pay your claim after 14 days.

If the landlord/agent disputes your claim, they must apply to the Consumer, Trader and Tenancy Tribunal (CTTT) within 14 days of receiving the notice and tell NSWFT in writing that they have done so.

The CTTT will decide how the bond will be paid out.

Claim by landlord/agent

If the landlord/agent wants to make a claim from the bond without your agreement, they must give you:

• a copy of the condition report completed at the end of the tenancy agreement
• copies of estimates, quotes, invoices or receipts for work they are claiming.

They must provide these to you within 7 days of making the claim.

NSWFT will give you written notice that the landlord/agent has made the claim. To dispute their claim, you must:

• apply to the CTTT for an order to pay all or part of the bond to you (within 14 days of receiving the claim notice – use the 'Rental Bond Application' form from the CTTT)
• give written notice to NSWFT that you have made the application.

The CTTT will decide how the bond is paid out.

Even if NSWFT has paid the landlord's claim, you can still apply to the CTTT for a refund of all or part of the bond. You must apply within 6 months after the bond is paid out.

What the landlord/agent may claim for

The landlord/agent may claim from the bond:

• the reasonable cost of:
  • repairs – if you, another occupant or a guest has damaged the premises or goods leased with the premises (other than fair wear and tear)
  • cleaning – if you have not left any part of the premises reasonably clean
  • replacing locks or other security devices – if you have altered, removed or added these without the landlord's consent.
• rent or other charges you owe under the tenancy agreement.

The landlord/agent is not limited to claiming for the above.

Bond refund to former co-tenant

On request, the remaining tenant/s must pay back a former co-tenant's bond – less any rent owed or other reasonable costs – within 14 days of the request.

This does not apply if:

• the former co-tenant's liabilities exceed the amount of bond they paid, or
• the former co-tenant has been excluded from the premises by a final apprehended violence order.

If a former co-tenant disagrees about how the bond is paid out to them, they can apply to the CTTT to resolve the matter. They must apply within 6 months after the bond is paid out.

Contacts

• NSW Fair Trading: phone 133 220, www.fairtrading.nsw.gov.au
• Housing NSW: phone 1300 468 746
• Consumer, Trader and Tenancy Tribunal: phone 1300 135 399, www.cttt.nsw.gov.au

March 2012