TENANCY TIPS:
Bond
** this
page last updated: 06/07/09**
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Bond lodgement and refund
processes are regulated by the Residential Tenancies Act 1997 (RTA). The
terms of your tenancy are set out in the RTA and are known as the ‘standard
tenancy terms’ (STT).
What is a bond?
A bond is a landlord’s security in case a tenant leaves owing rent or does
damage to the property that has to be repaired. A landlord does not have to
ask for a bond. However, if they do, the bond cannot be more than 4 weeks'
rent (s
20 RTA).
AT THE START OF A TENANCY
How is bond lodged?
If your landlord or their agent requires a bond, you
can pay it directly to them (cl 20(a) STT). A receipt must be provided.
If you pay your bond directly to a landlord, they have 2 weeks to lodge the
money with the Office of Rental Bonds (ORB).
(cl 20(c) STT). If you pay it to a real estate agent they have 4
weeks to lodge it. You can lodge the money yourself, although the
landlord/agent can refuse you possession of the premises until you produce
evidence that you have lodged the it with the ORB (s 24 RTA and cl 19 STT).
The bond should be lodged in the names of all tenants who paid a proportion
of it. The ORB will provide a receipt. If you don’t receive a receipt within
a few weeks contact ORB to check that it was lodged.
If the landlord/agent hasn’t lodged the bond you can apply to the ACT Civil
and Administrative Tribunal (ACAT) for an order requiring them to lodge it. The landlord can also face a maximum penalty of $2000 for failure to
lodge it (RTA s
23(3)).
Condition reports (‘inventories’)
No later than the day after you move in,
the landlord/agent must provide you with 2 signed copies of a condition
report
(or “inventory”) stating their assessment of the condition of the property,
and any goods leased with it (s29 RTA).
You have 2 weeks to return 1 copy to them.
Take the time provided because it gives you an opportunity to live in the
property and identify problems that are not immediately visible. If you
agree with the report, simply sign it and return the copy to the
landlord/agent.
If you don’t agree with part or all of the statements, add your own
comments, then sign and return their copy.
It is very important that you keep a copy of the report with your comments.
Keep it with your lease and other documents.
Remember:
The condition report is
viewed as evidence of the condition of the property at the beginning of the
tenancy (s 30 RTA). The
landlord, or their agent, may use the lack of detail to claim for damage
done before you moved in.
It is very important to
complete the condition report in as much detail as possible.
It is also advisable to take photos or video the premises at the same time.
If you
don’t receive a condition report you should document this, advise the
landlord/agent in writing that it hasn’t been received.
You should also do your own condition report. If, at the
end of the tenancy, no condition report is produced by the landlord/agent,
then what you say should be accepted by the ACAT as evidence of the
condition of the premises at the start of your tenancy.
Changes in
shared tenancies.
If there are changes to
shared tenancy arrangements during your stay in a property, and the changes
affect tenants who were listed at the ORB, you must fill out a
"Transfer of Bond"
form and advise the ORB of the changes. This is very important because the
ORB will only release bond to those tenants listed with them.
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AT THE END OF YOUR TENANCY
It is essential that you end your tenancy and finalise your responsibilities
for the house with a final inspection.
As a tenant you are expected to return the property in
substantially the same condition and level of cleanliness it was in at the beginning of the tenancy
(as noted in the condition report),
allowing for fair wear and tear (cl 64).
You cannot be made to
improve the property
(cl 65 STT).
Do I have to have my place professionally cleaned?
Your legal obligations as a tenant are
as noted above.
The methods you use to
achieve this are entirely a matter for your discretion. NOWHERE in the RTA
or the STT is it stated that you have to use professional cleaning or carpet
cleaning services at the end of your tenancy.
In some circumstances professional cleaning will be necessary, but if you
can return the premises to the appropriate condition such cleaning services
then you have fulfilled your legal obligations under the RTA and SRTT.
The Final Inspection
The final inspection takes place in the
last month of your tenancy at a time agreed between you and your landlord/
agent.
It is important that
you attend this inspection.
Return
all keys
at the inspection and ask for a receipt.
You may be held liable for rent and any damage while you retain
access to the premises. If your landlord/agent refuses to accept the keys,
the safest method for returning them is by registered mail. Include a note
stating the address of the rental premises you are leaving and the date you
were last on the premise, as the tenancy ends on the date you vacate (cl
97(2) STT). Add that they refused to accept the keys.
Ask for a copy of the
report at the end of the inspection.
A landlord/agent cannot add items that need repairing, restoring or cleaning
after the final inspection has been conducted and you have vacated the
premises and have no control over what is happening there.
Despite what some agents claim, a landlord cannot do an inspection
after you have vacated, if they want to do an inspection it has to be with
you at the final inspection.
When you move out make sure the landlord /agent has your forwarding
address and contact the ORB to confirm they also have your forwarding
details.
What can the landlord claim?
The RTA clearly states the
only
grounds for claiming amounts from your
bond (s31 RTA). The most common
are:
-
The cost of repairing damage other than fair wear and tear that was
caused by you;
-
Rent owing under the lease at the time it terminates (This doesn’t
include rent costs related to leaving a fixed term lease early;
is an entirely separate issue);
There are some additional grounds that are rarely if ever used.
For detail go to the bond information on our website.
Remember
that the bond money is your money. The
landlord or agent must be able to support any claim they make on your bond
money with evidence.
What is ‘fair
wear and tear’?
‘Fair wear and tear’
is a very old phrase that has been used in tenancy agreements for centuries.
There are two parts to its meaning:
-
‘Fair’
relates to the
cause
of the damage. It says that for damage to be excused, it must have
occurred in the course of
fair use
of the property for residential purposes. Something like carpet
deterioration in high traffic areas of the premises (e.g. hallways)
could definitely occur in the course of fair use and be excused. On the
other hand, it would be hard to argue that motor oil stains on a lounge
room carpet occurred during fair use. This type of damage would almost
certainly be considered to fall outside fair wear and tear.
-
‘Wear and tear’ refers to the
effect
of the damage, and limits the severity of allowable damage. Minor scuff
marks on walls, sun-fading of curtains and minor oil stains on a
concrete driveway would all likely constitute fair wear and tear. On the
other hand, a large red wine or cordial stain on the carpet would
probably be considered to be more than merely wear and tear, even though
such a stain clearly could have happened in the course of
fair use.
What is ‘fair wear and tear’ depends on the facts of each case. If you and
the landlord can’t agree, it will be decided in the
ACAT.
The
Member
will consider the condition of the property at the start and the end of the
tenancy, as well as the general age and condition of the property.
Evidence of the condition of the premises
The best evidence that you can have is
visual evidence,
video and/or
photographic.
Take the time to record all rooms inside the premises, and (if applicable)
the outside too. If any areas are raised as an issue at the final inspection
(eg an area of carpet, or a crack in the shower screen, etc) then take
additional close up photos of these areas.
You could also arrange for a reputable third party—eg, a work colleague,
friend, or neighbour— to go through on the day of the final inspection and
make a written statement about the state of cleanliness and general
condition of the premises on the date you vacate.
This extra effort could make all the difference when it comes to getting
your bond money back!
Claiming the
refund of your bond
You and the landlord/agent can both sign the ‘Refund of Bond’ form.
You
can then take the signed form to the ORB and receive a cheque for the agreed
amount immediately. It can be lodged by post or
fax. The claim will be processed within 3- 4 working days, and a refund
cheque sent by post or by electronic funds transfer straight into your bank
account.
Never sign
a blank bond form!!
Even
if you have a verbal agreement with the landlord/agent, insist on the
amounts and details being included on the form before you sign it.
If there is a
dispute you can always lodge a Refund of Bond form without your
landlord/agent signing off on it.
If you
don’t agree that you are liable for alleged damage, you can still claim the
amount you think is relevant, sign the claim form and lodge it with the ORB
without the landlord's signature.
The ORB notifies the
landlord/agent
that they have received a claim for the
bond. The
landlord/agent
has 10 working days to dispute this
claim. If they don’t dispute your claim within that time your bond will be
released to you.
If they dispute your claim,
the disputed amount is withheld by the ORB, and
any undisputed amount returned to you. The matter will then be listed for a
conference at the ACAT. At the conference a facilitator will try to assist
both parties to reach a negotiated outcome, but only orders that both
parties agree to can be made at the conference. If an agreement can not be
reached at conference then the matter will proceed to an ACAT hearing where
binding orders will be made by a Tribunal Member.
It is worthwhile to write to the landlord/agent when you lodge your claim,
advising them of your actions and stating why you are not legally liable for
the damages they are claiming (sign, date and keep a copy of the letter).
This may be enough to deter them from disputing your claim.
Bond forms are available from the Office of Regulatory Services website
noted below.
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All bond forms are available for download
here
This is a summary of your rights and
responsibilities.
If you have a specific
problem, you should seek more detailed advice.
The
information provided is based on the current state of tenancy law and details
may change.
Tenancy Tips © 2009 Tenants' Union ACT
The support of the ACT Government through the Dept. Justice & Community
Safety is gratefully acknowledged
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