Real Estate: Buying and Selling

An increasing number of young people are deciding to look into homes for rent rather than to buy, as the terms associated with house purchase can often be too onerous for them. This has led to a significant increase in the rental property market across Australia to meet demand. The process involved when moving into a rental property can be quite different, of course and one of the challenges many young people face is the lodgement of a security bond. Is this always necessary and what is the procedure involved?

Where Does the Bond Go?

While there is no law requiring the landlord to collect a security bond, it is almost always the case. At one time, it was simply given to the landlord or owner and kept in their bank account. This may still be true in a few places, but largely, any bond needs to be held by a central, regulatory authority instead.

How Much Is Involved?

Usually, a bond will be the equivalent of four weeks rental, although once again there is no minimum requirement. The tenant will need to come to an agreement with the property owner or landlord. They will then need to make sure that they lodge the amount directly with the regulator using the method stipulated by the particular authority.

Do Roommates Share?

If you are sharing a property with another tenant, then both people should be on the lease and the bond lodgement form. Sometimes, a particular state will refund the bond equally to all the parties on the lease, but other states may name one beneficiary and repay to that party only.

What About a Claim?

The landlord or owner will seek the bond as security against damage within the property, or in case the individual in question does not pay rent on time. If there is a dispute, it's normal for both parties to figure it out, and if they cannot come to an agreement, then the landlord or owner can lodge a claim with the authority for part or all of the bond money.

What Should Renters Do?

For the renter, it's very important to ensure that the monthly amount is paid on time and in full and to keep the property in good condition. Wear and tear is one thing, but wilful damage or negligence is quite another. They should take photographs when they enter the property and ensure that the moving report is comprehensive and accurate. If any repairs and maintenance are needed when they are living there, then they need to fully document that and make the landlord aware of the situation as and when it happens. When moving out, always attend the outgoing inspection so that you know if a claim is likely, and ideally, get that in writing before you move on.

Getting Full Information

Have a word with your real estate agent to determine the level of bond attached to each property you look at and make sure that you understand the entire procedure in each case.