Rental Bonds: An Overview
Rental bonds are commonly used by landlords to protect themselves from losing money due to a missed rent payment, damages to their property and other circumstances. Tenants are usually required to pay rental bonds at the beginning of their lease period. If you’ve thinking about getting into Brisbane real estate, you need to educate yourself about what rental bonds are, how they work – and how to use them properly.
Taking a Rental Bond
When a tenant first signs up to lease one of your properties, you will want to secure a rental bond from them to avoid any unexpected expenses and other potential issues. An experienced property management Brisbane firm will know all of the ins and outs of obtaining rental bonds; however it helps to have a basic understanding of the process. Firstly, you are not permitted to hold the funds yourself; you must hand them over to the Residential Tenancies Authority, or RTA, within 10 days of collection.
Along with the rental bond, you must send a completed bond lodgement to the RTA. This must be completely filled out and signed by your tenant. Once it is processed, the RTA will send out receipts to you and your tenant, to confirm the agreement and to confirm the amount of the rental bond. This is required by law, and is done to protect your interests and the interests of the tenant. Assuming that the terms of the lease are successfully fulfilled – that no extra rent is owed, and that no damages are found – the bond will be returned to the tenant at the end of the lease period.
What Is the Maximum Rental Bond You Can Charge?
One of the most common questions asked when it comes to rental bonds is, “How much can I charge?” In Queensland, if you are charging rent equating to $700 per week or less, then the maximum rental bond that you can charge is equivalent to four weeks’ worth. If you charge more than $700 per week, there is no maximum. Keep these numbers in mind when preparing the terms of your lease, so that you don’t inadvertently run afoul of the law.
Additional Points
It should be noted that in some cases, tenants can transfer their bonds from one property to another. At the end of one lease, the RTA holds on to a tenant’s funds instead of returning them. These funds can then be used as rental bond for their new rental property. Many times, people find it more convenient to handle their rental bond in this way. As a landlord, it is important that you be aware of the possibility of transfers of bond, so that you are not taken by surprise.