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
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