Factsheet 03 [PDF]

About the bond

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

The landlord/agent:

• cannot ask you for anything other than a bond in the form of money (you cannot be asked for a written guarantee, for example)
• can only ask for 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 agreement).

The landlord/agent cannot require you to pay more (or another) bond because the rent is increased or because 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 this 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 calendar month in which it is paid.

For bond paid in instalments, the periods for depositing the bond vary according to how soon the total is paid after the first instalment. (Contact NSWFT for more information.)

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

If you do not receive an advice slip, contact NSWFT to find out if the bond has been deposited. 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. 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 old premises agrees to the transfer and is not claiming any of the bond.

Fill in a ‘Transfer of Bond’ form. Have it signed by all the tenants whose names are on the bond advice slip and by the old landlord. Attach this form to the new ‘Bond Lodgement’ form.

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

Claiming the bond back

At the end of the tenancy, fill in a ‘Claim for Refund of Bond Money’ form.

If you agree with the landlord/agent about return of the bond, sign the completed claim 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 you a cheque (give a forwarding address).

If you disagree about return of the bond, you can still make a claim for it by filling in the claim 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 this.

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

Claim by landlord/agent

If the landlord/agent wants to make a claim for 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 for which they are making the claim.

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 so that the bond is not paid out until the CTTT makes a decision.

The CTTT will decide how the bond is to be 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.

The matters for which the landlord may claim from the bond are not limited to these and include rent or other charges you owe under the tenancy agreement.

Bond repayment to former co-tenant

On the request of a former co-tenant, the remaining tenant/s must pay back the bond paid by the former co-tenant – less any rent the former co-tenant owes 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 at the end of their tenancy, they can apply to the CTTT to have the matter resolved. They must within 6 months after the bond is paid out.

Contacts

• Forms are available from 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

January 2011

The information in this factsheet:
• is intended as guide to the law and should not be used as a substitute for legal advice
• applies to people who live in, or are affected by, the law as it applies in New South Wales, Australia.
© Tenants' Union of NSW.