How to prevent and manage bond

Thursday 16 May 2019

Almost every tenant has paid their bond with the full expectation that ‘nothing will happen’ and they’ll get all of their money refunded when they vacate the property. This is not always the case however and often tenants are left perplexed as to why their bond or a portion of it was retained. Knowing your rights as a tenant is extremely important for exactly this reason, because you can then be adequately prepared to challenge a damage claim, if you believe it has been lodged unfairly. It also means you can avoid the worst case scenario which is ending up at the tenancy tribunal.  


Take responsibility for the condition report

There are a number of things you can do to get a dispute resolved, however the first and most important step is to review and complete your condition report accurately and diligently when you first move into the property. In the case of a dispute arising – especially if a different property manager (who may be more meticulous that the previous one was) does the inspection – you can simply refer back to the condition report to determine whether the issue was there prior to your tenancy or not. To really reinforce the importance of a condition report, let’s go over the basics.      

For those new to the rental property market, a bond is a fixed amount of money – usually the equivalent of 4 to 6 weeks rent – that is paid to a specific authority (it varies from state to state) to cover any damage to the property while you live there. Damage attributed to you will be defined by the difference between the ingoing condition report, which is approved by both the property manager and the tenant, and the outgoing condition report when you vacate. When you are given the keys to a property, you will be given a ‘condition report’ that documents all rooms, fittings and fixtures in the property and their existing condition, as of the date you were given the keys. It’s the tenant’s responsibility to review the report, confirm they agree with the property manager’s assessment, and make notes if there is something they disagree with. Most condition reports will also have photos that accompany the report, which you should also review and submit your own if the photos in question do not represent the reality. An example might be a wide shot of a bedroom wall and a note in the report stating ‘walls in good condition’; your note in response might be ‘large black scuff mark on lower section of bedroom wall’ which you would then also supply a photo of. 

It’s really important to take the condition report seriously, not only because it’s the thing that will determine what will happen to your bond when you vacate, but also because it may come down to ‘your word’ against that which was recorded at the beginning of your tenancy – especially if your property manager changes during your tenancy. Rental property managers see hundreds of properties every year and though it’s their job to document things precisely, brevity can take priority sometimes and for a tenant waiting on their bond to be refunded, the devil is in the detail. That scuff mark could turn into a dispute over whether the wall needs to be repainted or not, which could mean your whole bond would be retained to cover the costs of the painter, all because neither you, nor the property manager at the time paid enough attention to the condition report. 


Know your rights and responsibilities

As well as being well across the condition report, you should also be very clear on what your rights and responsibilities are as a tenant. These are detailed officially in your lease agreement and can also be found on your state’s Consumer Affairs website. The majority of bond disputes come from the landlord, making a claim against the tenant. If you know what your rights are, you are in a good position to defend yourself against the claim, sort it out and move on. If however you don’t, you may end up succumbing to the pressure and losing your bond in the process. It helps to know your rights regarding rental property repairs and maintenance too as these can vary from state to state, agency to agency, and even property to property!

Tenancy laws vary slightly from state to state but each state or territory has its own Residential Tenancies Authority or Tenancy Association. You’ll find these via your favourite search engine. If the landlord is making a claim against you as the tenant, then contact your RTA for advice about whether you are actually in the wrong or not. They should be able to advise you as to whether the landlord has grounds for the complaint and what you can do in this instance to argue your case. Most RTA’s have FAQs pages on their website that can also be helpful. If you believe the landlord is at fault then you should contact your RTA before lodging your complaint to confirm your rights and validate whether you have grounds for complaint.


Deal with any issues before your final inspection

Another way to avoid disputes is to make sure you do a thorough job of cleaning and repairing the property before your final inspection. Doing this with the condition report in your hand can be useful so you have something to compare it to. Things can look quite a bit different over time and your memory is not to be trusted when it comes to how clean the oven really was when you moved in. As you work through the condition report you may notice small things here and there that need to be repaired. You can aim to do this yourself, but it’s also worth calling your agent to clarify whether the issue in question would be considered wear and tear or not. A few scratches on floor boards are probably ok but broken tiles maybe not for example. A common mistake many tenants make is requesting to hang pictures early in their tenancy, but then forgetting the approval came with the condition that all hooks be removed and walls repaired when you vacate the property. This is a simple enough job and your local hardware store can advise you on what tools and products you need to deal with this quickly and effectively.    

If you have the budget for it, getting professional cleaners in and requesting a ‘bond clean’ not only means you don’t have to do the dirty work, it can also be an endorsement to the property manager that you took it seriously. When arranging the final inspection, you can then email them the receipts for things like bond clean, carpet cleaning, pool cleaners, gardener etc. Property managers generally will find less reason to nit-pick if they know professionals have been through the property. 


Talk about immediate solutions

 In most cases, the property manager simply wants the property to be in good condition for their landlord and if you show you are willing and able to deal with the issue, you can avoid any part of your bond being used for that purpose. Communication is key to this and if you keep the lines of discussion open, take the emotion out of it and show them you are proactive about sorting things out, in most cases property managers will be cooperative. Things like marks on walls and stains on carpets should all be considered wear and tear, however if the property manager disputes this, offer some solutions such as a professional cleaner, or a second shot at cleaning the walls. If you have a friend or relative who is handy, maybe they can help you out to patch up holes or do small repairs where needed. It’s better to try to resolve these issues yourself and pay out of your own pocket, because ultimately this will be a more cost-effective solution than having it taken out of your bond. It also helps the property manager who, in reality would probably prefer the issue was resolved, over having to call tradespeople and chase up repairs over a period of days, or sometimes weeks. If the agency takes charge of the repairs, it may cost a lot more, given that many use their own professional (and expensive) contractors.

Other issues such as not paying the rent on time can be trickier to resolve, but good communication throughout your tenancy is key. Ideally you would avoid being blacklisted as a tenant in the first place by paying on time, clearly communicating if your rent might be late and paying up the balance as soon as you are able to. However, if this happens numerous times in succession, the landlord may have little choice not only to blacklist you, but to lodge a claim against you for unpaid rent.

So, as is the case with many things, prevention is the best solution! Being a good tenant is not hard and it will pay off for you in the end. Keep records of all communications, and try to always email your property manager rather than call, throughout your tenancy so you have a digital paper trail of your role as the tenant for that property. It’s also a good idea to read over your lease every time it’s renewed just to make sure you’re still clear on what you have to do and to make yourself aware of any changes.