This guide covers landlords (or head-tenants) and tenants (or sub-tenants) in a Residential Tenancy. This applies to the majority of share accommodation and residential property rental situations. To confirm it covers your situation visit What is my share accommodation situation?
In NSW, Bonds and Security Deposits are referred to as ‘Rental Bonds’. A Rental Bond is the only form of security that a landlord can require or accept from a tenant.
Rental Bonds provide security for the landlord (or head-tenant) against damage to the property or non payment of rent and are also an incentive for the tenant(s) to comply with the tenancy agreement.
The best way to lodge and manage a Rental Bond is to use Rental Bonds Online
The NSW Rental Bond Board is part of Fair Trading NSW and they can be contacted on 13 32 20 for any questions or assistance.
Only one Rental Bond can be charged for each residential tenancy agreement, regardless of the number of tenants or any changes in tenants under that tenancy agreement. If there are multiple tenancy agreements for different parts of the one premises, then one Rental Bond can be charged for each of those agreements.
By law, the maximum amount that a landlord may require for a Rental Bond is the equivalent to 4 weeks of rent. This must be the same rental amount that is stated on the residential tenancy agreement.
Example: If the agreed rent is $250 per week, the maximum Rental Bond is $1,000
In share accommodation it is common to charge 2 or 4 weeks rent and some landlords may choose to charge no Rental Bond.
There is no minimum Rental Bond amount and the landlord can choose not to charge a Rental Bond if they wish.
The Rental Bond cannot be increased under any circumstances, including rent increases or damage to the property.
A tenant has two options in paying the Rental Bond:
The landlord cannot compel the tenant to pay the Rental Bond before signing the agreement. If, however, the tenant elects to deposit the Rental Bond directly with the Rental Bond Board, then the landlord may require the tenant to show evidence that the deposit has occurred before signing the agreement.
After receiving payment of a Rental Bond, the landlord must give to the tenant a receipt for the payment and a “Bond Lodgement” form, containing details of the amount of bond paid, which is signed by both the landlord and the tenant. This is then sent off with in conjunction with the bond. It is not necessary to give a receipt if the details of the Rental Bond are recorded in the written residential tenancy agreement.
While the most common practice is for the Rental Bond to be paid as a single lump sum, it may instead be paid in instalments if the landlord and tenant agree.
100% of every Rental Bond must be deposited with the Rental Bond Board.
The best way to lodge the Rental Bond is to use Rental Bonds Online (RBO). RBO creates an online account for landlords and tenants to lodge and manage the bond throughout the tenancy agreement.
When the Rental Bond Board receives a Rental Bond, it will send a deposit notice to the tenant. If a tenant does not receive a deposit notice, then the tenant should contact the Rental Bond Board.
RBO is an online service provided by NSW Fair Trading for landlords and tenants to easily manage the Rental Bond during the tenancy agreement.
To use RBO, the landlord must first download an application form and complete their registration through Service NSW. They can then invite the tenant to also access the account.
Using RBO is the most secure and easy way to lodge and manage the bond for both tenants and landlords. Most importantly, it allows tenants to pay the bond directly to the Rental Bond Board using a credit card or BPAY.
The landlord must deposit the bond with the Rental Bond Board within certain periods:
Condition Reports record the general state of repair and condition of the property at the beginning and end of the tenancy. They must be completed by the landlord and tenant. Condition Reports are important in determining how the Rental Bond should be repaid at the end of the tenancy.
Read more about NSW Condition Reports.
When the tenants in a residential tenancy agreement change, then the tenants registered for the Rental Bond may be altered. This is done by completing the Change of Shared Tenancy Arrangement form, signed by the incoming and outgoing tenants, as well as the landlord. At least one tenant must continue to occupy the premises to transfer the registration for the Rental Bond.
It is the responsibility of the new and existing tenants to exchange amounts between themselves to reflect their contribution to the Rental Bond.
When one or more tenants under an original tenancy agreement continue to occupy a premises under a second residential tenancy agreement, then the landlord cannot request or receive a further Rental Bond or additional payments as security.
Instead, the Rental Bond from the first agreement is transferred to the second agreement. The Rental Bond can be transferred to the second agreement by completing a Transfer of Bond form. This should be attached to a new ‘Bond Lodgement’ form.
At the end of residential tenancy agreement (i.e. when the agreement ends or is terminated), the Rental Bond should be paid back to the tenant or landlord, depending on whether the tenant has breached the terms of the agreement. To claim an amount of the Rental Bond, the landlord or tenant must complete a ‘Claim for Refund of Bond Money’ form.
Alternatively, if you have used Rental Bonds Online to manage the bond for your tenancy, you can make a claim online through your account.
Making a claim before termination of the agreement - by consent
Generally, a claim from the Rental Bond can only be made after the end of the tenancy. There are 3 circumstances when a claim can be made before the termination of the agreement:
Claims by tenant(s) - by agreement with landlord
Where the tenant and landlord agree on the amount of the Rental Bond to be returned to the tenant, then both parties should make a joint claim. The Rental Bond Board will then return the Rental Deposit amount to the tenants in their preferred method.
Before either a landlord or tenant signs a joint Bond Claim form, both parties should be careful to ensure that the correct amounts are stated.
If you are using RBO, you should make sure the correct amount will be refunded before agreeing to it.
Claims by tenants - without agreement with landlord
When the tenant(s) and landlord do not agree on the amount to be returned to the tenant, the Rental Bond Board will notify the landlord of the claim made by the tenant(s).
If the landlord does not dispute the claim, then the amount claimed will be re-paid to the tenant.
The landlord has 14 days to dispute the claim by commencing proceedings in the NSW Civil and Administrative Tribunal (NCAT). The landlord should use the ‘Claim for Refund of Bond Money’ form. It is advisable for the landlord to also notify the Rental Bond Board.
Claims by landlords - by agreement with tenant(s)
Where the landlord and tenant agree on the amount of the Rental Bond to be paid to the landlord, then both parties should make a joint claim. The Rental Bond Board will then return the Rental Deposit amount to the landlord.
Before either a landlord or tenant signs a joint Bond Claim form, both parties should be careful to ensure that the correct amounts are stated.
If you are using RBO, you should make sure the correct amount will be refunded before agreeing to it.
Claims by landlords - without agreement with tenant(s)
When the landlord makes a claim without the tenant’s consent:
The landlord is only entitled to claim from the Rental Bond for:
The tenant has 14 days to dispute the claim made by the landlord by commencing proceedings in NCAT. The tenant should use the ‘Claim for Refund of Bond Money’ form. It is advisable for the tenant to also notify the Rental Bond Board.
If the tenant does not dispute the claim by the landlord, then the amount claimed will be paid to the landlord.
The first step to resolving any disputes surrounding the Rental Bond should be to discuss and negotiate with the other party. Check out our Resolving Disputes page for more information.
If it is necessary to take formal legal action, you should apply to NCAT using the Tenancy and Social housing application form.
Transferring money safely
When paying your deposit, bond or rent by cash make sure you get a receipt. With modern phones this can be as simple as an SMS or email confirming the amount, date and what it is for. Keep a copy of this incase you need it later.
Never ever transfer money to a bank account outside of Australia or use a untraceable money transfer system such as WESTERN UNION. If anyone asks you to do this on any website it is likely to be a scam and you are almost guaranteed to lose your money.
If this ever happens on Flatmates.com.au report the member immediately so we can investigate and take the appropriate action.
NSW Condition Reports
NSW Tenancy Agreements
NSW Rental Payments
NSW Holding Deposits
These legal guides provide a brief summary and introduction of the laws and regulations affecting share accommodation. They do not cover all cases in all legal jurisdictions and might not apply in your specific share accommodation situation. It is important that you use this information as a guide only and seek independent Legal Advice or consult the Relevant Acts. We do not accept any liability that may arise from the use of this information.