How to get your rental bond back.
The boxes are packed. The carpet is still gently steaming from the deep clean you gave it last night. Now all that’s left is to get your bond back so you can move onto the next adventure.
As any renter knows, coming up with the initial bond can be a big ask. A bond is typically four weeks’ rent, which is a fair chunk of money to find on top of other moving costs. When your lease is up, getting that money back can make the next move much easier.
But how do you get it returned, and what happens if your landlord wants to keep it? Grace Hooper, Head of Property Management for Independent, says that getting a bond back should be straightforward unless there’s a dispute. “The ACT has recently introduced a new system to speed things up. If there’s a dispute, though, the process can unfortunately still drag on.”
What is a bond?
A rental bond, or security bond, is a payment made by a new tenant when they sign a lease. It acts as financial security for the landlord in case the tenant breaches the lease agreement — either by damaging the property or leaving charges unpaid. “We can’t hold back part of the bond for unpaid rent,” explains Grace. “Usually, bonds are there for security in case a tenant damages the property, takes something that isn’t theirs or doesn’t pay for other charges, like water.”
In the ACT, a bond cannot be more than four weeks’ rent. If you’re renting an apartment for $450 per week, for example, your bond cannot exceed $1800. Your landlord also can’t require an extra ‘pet bond’ if you keep an animal. Your lease will tell you how much your bond is.
How does the bond process work?
Gone are the days when a bond was paid to the landlord via an envelope of cash which you may or may not ever see again. The bond process is regulated to make sure that tenants and landlords are both protected in case of a dispute.
In the ACT, bonds are lodged at the rental bond office, which is part of the ACT Revenue Office. The ACT Revenue Office is responsible for the receipt and management of residential tenancy rental bonds in the ACT under the Residential Tenancies Act 1997 (the Act) and the Residential Tenancies Regulation 1998 (the Regulation).
If there is a property management agency, they will do this part, but landlords can do so if they self-manage. The office will enter it into the Rental Bonds Portal and link it to the agency or landlord’s account. They’ll then provide the bond number and payment reference details to the lodger, who must give the information to you as the tenant.
Keep these: you’ll need them at the end of the tenancy to apply for a refund. If your landlord or property manager hasn’t offered them, make sure you follow up. The last thing you want is to give notice only to find out that your landlord didn’t lodge the bond.
How do I get my bond back?
Getting a bond back in the ACT is fairly straightforward. Once the tenancy is over, you can apply for your bond to be refunded. If the bond was lodged via the Rental Bond Portal, you can apply for the refund online. Otherwise, you will need to complete a Bond Refund form and email it to firstname.lastname@example.org. Read it carefully to check that the refund amount is right and that you agree with it because once the office accepts the form, you can’t submit a revised version.
By March 2020, the vast majority of bonds should have been transferred to the online system,
How long does it take to get my bond back?
“A common question from tenants is 'how long does a landlord have to return a bond?’, but it’s not the landlord who holds the bond,” explains Grace. “The timeframe is entirely up to the rental bonds office."
Getting a bond back used to take a long time. In early 2019, the news reported that getting a bond back in Canberra was taking up to two months, thanks to an influx of new tenants into the market. To be fair, they really were dealing with a lot of extra claims: 3700 bonds between January and March compared to 2700 rental bonds between June and August.
If you’re one of the tenants left waiting, though, ‘fair’ is probably the last thing on your mind. Whether you’re moving to a new rental or buying a home, you’re facing a lot of upfront costs of your own. That $2000 bond would come in extremely handy!
Fortunately, the ACT has recently overhauled its rental bond refund process with the introduction of the Rental Bonds Portal. Beforehand, the office undertook to return bonds within 10 business days. Now the bond refund timeframe in the ACT has been reduced to 48 hours.
“The Rental Bonds Portal should speed the process up significantly, which is great,” says Grace. “The office has only just finished migrating data over, though, so we really need to wait and see what happens over the next year before we can feel confident about the new timeline.”
Will I get my bond back?
"Most tenants get all or most of their bond back,” says Grace. The rental bond office stats bear this out. In 2018, it reported that 15,787 bonds were returned to tenants, with 12,735 returned in full and the remaining 3052 partially refunded.
“When we do keep some of the bond back, it’s usually to pay things like final water usage, replacement keys if the tenant has lost them, or sometimes we have to pay a cleaning service to come in if we discover issues at the final inspection and the property hasn’t been left as the tenant found it. Other times, it might be the tenant has taken something from the property, like a remote control that’s got caught up in their packing boxes.”
Occasionally, there’s a bigger issue.
“We’ve had a couple of properties over the years when the damage to the home cost so much to fix that we had to keep the entire bond back for the purpose. One tenant had put up lots of pictures and attached shelves to the walls in every room. When they moved out, they pulled out the hooks and wall plugs and chunks came out of the wall. We ended up having to do some serious re-plastering and then repaint the whole interior".
“This is why it’s so important that tenants understand what they can and can’t do and that we do regular inspections to spot issues early. It’s as much to protect tenants as it is landlords because if we can prevent these things from happening, tenants are much more likely to get their bond back,” Grace explains.
What happens if there's a dispute?
Because the bond is held with an independent third party, your landlord can’t just decide not to give it back.
“If there are outstanding costs or damages, we contact both the tenant and landlord and see if we can get everyone to agree on how much of the bond will be withheld,” says Grace. “Nine times out of ten, that does the trick. Most tenants are happy to meet the costs if they’ve accidentally damaged something in the property or there's an outstanding bill.”
If your landlord is going to keep some or all of the bond, you’ll get a Bond Refund Notice with the distribution of amounts listed on it. You can either agree and sign it, or lodge a dispute. If you’ve applied for a refund of the full amount and the landlord believes that some are owing to them, they can also dispute it.
If you both agree on an amount, the amount that you’re due back will land in your account via bank transfer.
Any party who wants to dispute the amounts has 14 days to do so. The dispute must be in writing and addressed to the Rental Bonds Office. The Rental Bonds Office will then notify ACAT of the dispute and notify all parties that the matter has been referred to the ACAT.
So how long does a bond refund take if there’s a dispute? “The reality is that if there is a dispute, it’s quite a slow process,” warns Grace. “If it gets to this stage it can get stuck in no-man’s-land because there’s no good automated system to follow up with the parties.” That means that you’ll need to be vigilant about your case and follow up yourself if you want to see any progress.
If you do go to ACAT you’ll need to have evidence to support your claim.
“Usually if we do get a dispute, it’s about the condition of the property,” says Grace. “Since we always do a thorough inventory and condition report at the start of the tenancy, it’s fairly straightforward to show whether the property has been damaged in the meantime.”
What should you bring to the tribunal?
While we can’t guarantee you will get the full bond refund, this checklist might help.
The tenancy agreement, the date the tenancy began, and the type of tenancy
- A receipt for the bond which shows the amount paid
- Evidence about the condition of the property at the start of the tenancy, including the condition report, if the dispute is about damage, and photographs if you have them.
- A final inspection in the ACT should be thoroughly documented with photographs, and you are entitled to a copy of this as well.
- Evidence that you have paid any relevant charges (such as water rates) if the landlord is claiming that these are outstanding
- Preparation and good communication with your property manager can help avoid any disputes and ensure you get your bond quickly at the end of your lease.
If you want to lodge a request for a rental bond return or know the status of your own rental bond, you can check it yourself at the Rental Bonds Portal.
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