Rental Bond

Published 31 May 2022Updated 25th January 2023

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4 min read

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What is Rental Bond?

Rental bond is a payment made by tenants at the start of their tenancy. Think of it as a form of cash security to protect landlords in case the tenant doesn’t follow their tenancy agreement. 

If a tenant fails to pay rent, needs to be evicted or causes damage to your property, landlords can make a claim to access this money as financial recuperation. 

While it’s not mandatory, landlords can choose to take a bond from new tenants. This sum of money is paid to the rental bond authority in the relevant state or territory, meaning this money isn’t held directly by the landlord. 

There are a few important restrictions when it comes to rental bonds, including:

  • A bond can be considered valid only through a monetary transfer (not a written guarantee)
  • Only one rental bond can be requested per tenancy agreement 

FAQs about Rental Bond

How much is rental bond?

Typically, landlords will request a payment that’s equal to four weeks’ rent as a rental bond. That means with a rent of $600 per week, your rental bond would be $2,400. 

The maximum amount that can be set for a rental bond is four weeks’ rent. However, there’s no minimum amount. 

It’s also important to remember that this amount can't be changed or increased during the tenancy (even if the rent is increased or a tenant causes costly damage to the property). 

Many investors and landlords use their rental property as a way to earn passive income, which means reducing the chance of major expenses is a top priority. That’s why many landlords choose to charge the full four-week amount to protect themselves in the worst case scenario.  

When is rental bond paid?
How do tenants get their rental bond back?

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