Rental Bonds – what are they and how do they work?
If you’re considering a move into a rental property, it’s almost certain you’ll need to pay a bond, along with the first month’s rent upon approval.
For many, it can be a stressful time accumulating such a big chunk of cash, especially if you’re still waiting on a return of your previous bond from your last rental property. Often calculated out as four times your weekly rent, a bond is considered by your landlord and property manager as a form of security, to cover any accidental damages or missed rent payments, etc. For many, at the completion of the lease agreement, a full refund of the bond occurs.
Let’s further discuss how does it works, and what happens if you can’t afford to pay it?
How does it work?
At the same moment you sign the lease and take ownership of your new home, you’ll also be asked to make payment of your first months rent, along with your bond. Generally speaking, the bond is a calculation of the first four weeks of your rent however, this can vary depending on which state or territory the property is governed by. Other factors which can alter the bond amount include, property type (furnished or unfurnished), and pets.
Your bond, along with a completed bond lodgement form, will be submitted to the residential bond authority for your state or territory, which ensures it is available to access upon finalisation of the lease, for either a full (or partial) refund direct to the tenant, or for your landlord (if required).
Once the bond has been received by the residential bond authority, your landlord will provide you with a receipt.
When the time comes, how do I claim my bond back?
At the time of finalising your lease, your property manager will visit the vacant property to complete their routine inspection, confirming no property damage has occurred. Once approved, they will then confirm there are no outstanding costs.
If both these factors have been cleared, your property manager will then supply you the relevant paperwork to claim your bond, for you to sign and return. Your property manager will also sign this document and finalise the application to release your bond.
If your property manager deems there to be damage or outstanding costs, your landlord can seek to withhold the required amount to cover losses or repairs. Disputing these claims can be done, if you believe they are unwarranted, however it pays off to communicate and compromise with your property manager prior to this.
Generally, a bond can take around four weeks to process, before it lands in your bank account, so be patient!
What happens if I cannot afford to pay the bond at the time of approval?
For many people, engaging in a new rental agreement is a financially stressful period. From finalising a previous rental property, to outlaying a huge sum of money to secure the next, often prior to receiving your previous bond back, can be tough.
If this is the case, there are reputable companies out there that can help pay the bond and other associated moving costs. Just don’t be afraid to speak up!
Talk to your property manager about it, as they will most often have an established relationship with one or two companies and can help point you in the right direction.
How we can help you….
Our Eview Group property managers have experience in helping individuals move forward, establishing a lifestyle they dream of; whether it’s a family home or shared accommodation.
If you’re considering a rental property, and would like to talk to one of our experienced property managers about how to further explore the rental world, please reach out to your local Eview Group Proud Member agency to discover how our expert, nation-wide team can help you.