What is a bond in rental?

A bond in a rental agreement is a security deposit paid by the tenant at the start of a tenancy to cover any damage, unpaid rent, or other costs that the landlord may incur if the tenant breaches the lease. The bond is held by an independent state-based authority rather than by the landlord or real estate agent, and it is returned to the tenant at the end of the tenancy (in whole or in part) subject to claims by the landlord.

The maximum bond amount is set by each state's Residential Tenancies Act. In most states the maximum is four weeks rent for unfurnished properties, with some states allowing up to six weeks for premium rent or furnished properties. Specifically: New South Wales, Victoria, Queensland, South Australia, and the Northern Territory cap the bond at four weeks rent in most cases. Western Australia caps it at four weeks for rent under 1,200 dollars a week. Tasmania caps it at four weeks. The Australian Capital Territory caps it at four weeks.

Bonds are lodged with state-based bond authorities. NSW Fair Trading runs the Rental Bond Board. Consumer Affairs Victoria runs the Residential Tenancies Bond Authority (RTBA). Queensland runs the Residential Tenancies Authority (RTA). South Australia, Western Australia, Tasmania, the ACT, and the Northern Territory all have equivalent agencies. The landlord or agent must lodge the bond within a set period (typically 10 to 14 days). Tenants receive a receipt and can later log in online to confirm the bond is held in their name.

At the end of the tenancy, the tenant and the landlord usually agree on whether and how much of the bond should be returned, based on the condition reports and any rent owed. If they do not agree, either party can apply to the relevant residential tenancies tribunal (NCAT, VCAT, QCAT, and so on) to resolve the dispute. Common reasons landlords claim part or all of a bond include unpaid rent, cleaning costs above ordinary wear and tear, damage to walls or fittings, and broken lease compensation if the tenant left before the end of a fixed term.