Housing and Tenancy

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Bond

What is a bond?

A bond is defined as an amount payable by a tenant or resident to secure his or her performance and observance of the tenancy/residency agreement and provisions of the Act (s 3).

What does the Act require?

If a bond is required, the following steps must be taken at the start of the tenancy:

  1. a Bond Lodgment Form must completed and signed by the landlord
  2. The form must then be signed by the tenant/resident.
  3. The landlord then has 10 business days to give the bond and completed form to the Residential Tenancies Bond Authority (RTBA).
  4. If a tenant pays a bond before they enter into occupation, the landlord must give 2 copies of a condition report which details the condition of the premises. The condition report should be signed by the landlord. Within 3 business days after entering into occupation of the premises, the tenant must return one signed copy with comments where appropriate.
  5. Maximum bond of 4 weeks rent applies unless certain exceptions apply (see section 31). 
  6. Not more than one bond is payable in respect of continuous occupation, as long as the weekly rent is less than $350 per week (section 34). 

Bond – what happens at the end of tenancy?

At the end of the tenancy the bond is generally returned to the tenant if both parties agree (s 412). If agreement is reached a bond claim form should be completed, signed and lodged with the RTBA. If the parties cannot reach agreement, either party may apply to VCAT. Tenants must apply under section 416 and landlords under section 417 of the Act. Section 417(2) states that landlords must apply within 10 business days after (a) the tenant provides vacant possession or (b) the landlord becomes aware the tenant has abandoned the premises. Despite this, commentary suggests a landlord may seek an extension of time in which to apply under section 126 of the VCAT Act. Tenants may apply to VCAT for return of their bond at any time after they have vacated. 

See the Consumer Affairs Victoria website for bond claim forms. 

Checklist - In relation to bond, the key issues are:

  1. Tenants and residents should never sign a blank Bond Claim Form.
  2. If a tenant pays a bond, the landlord must provide the tenant with 2 copies of a condition report (s 35) before the tenant enters into occupation
  3. If a tenant cannot get the landlord to agree to payment of the bond he/she must apply to VCAT
  4. The landlord may only apply within 10 days of the tenant vacating or becoming aware that the tenant has abandoned the premises although this period may be extended.
  5. The landlord cannot charge more than 4 weeks rent for bond and cannot ask for more than 1 bond (subject to exceptions, see sections 31 & 34)

Important!

 

Tenants/residents should never sign a blank Bond Lodgment Form as this would enable the landlord to provide incorrect information to the RTBA and would be ultimately very difficult to challenge.