How Do Bonds Work?

Bonds are an essential part of renting, and help owners safeguard their investment by ensuring a certain amount of financial compensation is at hand should their property suffer damage, incidental or otherwise.

In Queensland, the Residential Tenancy Authority sets limits on the maximum amount of bond that may be paid by tenants, which is set at the equivalent of four weeks rent. The only exception to this requirement occurs if the weekly rent exceeds $700, in which case an amount beyond four weeks rent may be negotiated. Bonds are paid in addition to the rent that is paid in advance at the start of a lease.

To ensure a just and equitable process, the Residential Tenancy Authority works as a caretaker for all bonds for the duration of the tenancy. Bonds are collected from the outset of the lease, and transferred to the trust of the Residential Tenancy Authority for safekeeping. The Authority will hold the tenant’s bond until the tenant has completed their lease and moved out and an Exit Condition Report has been completed. Then a Refund of Rental Bond Form can be submitted to the RTA which will need to be agreed upon by all parties before funds are released.

Because access to bond money is dependent on a thorough entry and subsequent exit report, it’s important to engage a property manager who takes their inspection duties seriously, and thrives on capturing attention to detail.

On the rare occasion a property has suffered damage beyond the normal wear and tear of time, the bond may be used to cover the costs of bringing a property up to the standard it was at the beginning of the lease.

While it may seem that taking a bond involves a lot of additional paperwork, the benefits far outweigh the initial inconvenience.