The maximum Rental Bond that can be charged in Victoria is the equivalent of 1 month’s rent when the weekly rent is $350 or less. The Rental Bond must be deposited with the Residential Tenancies Bond Authority.
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 Victoria, Bonds and Security Deposits are referred to as ‘Rental Bonds’ and are managed by the Residential Tenancies Bond Authority (RTBA)
A Rental Bond is the only form of security that a landlord can require or accept from a tenant.
Only one Rental Bond can be charged for a residential tenancy agreement, regardless of the number of tenants or changes in tenants. 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.
What is the maximum Rental Bond?
When the weekly rent is $350 or less, the maximum Rental Bond is the equivalent of 1 month of rent.
Example: If the weekly rent is $250, then the maximum Rental Bond is $1,000
When the weekly rent is greater than $350, there is no maximum Rental Bond.
Example: If the weekly rent is $450, then the landlord may charge any Rental Bond
If the weekly rent is $350 or less, but the tenancy agreement has certain features, then there is no maximum Rental Bond. These features are:
- Premises was the landlord’s place of residence before the tenancy,
- Agreement states the above fact, and
- Agreement also states that the landlord intends to resume occupancy after the tenancy.
Example: Even if the rent per week is $250, if the landlord lived in the premises before the tenant, and will live there after the tenant leaves, and the agreement states both those facts, then there is no maximum Rental Bond
If the weekly rent is $350 or less, the landlord can apply to VCAT for an order allowing a Rental Bond that exceeds 1 month’s value.
Example: Even if the weekly rent is $250, the landlord may obtain permission from VCAT to demand a Rental Bond of $2,000 if the premises was vulnerable due to heritage listing status
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.
Is a Condition Report required?
When a tenant pays a Rental Bond to a landlord, the landlord must give the tenant 2 signed copies of a condition report conducted on the premises. The condition report must state the repair and general condition of the premises at the time of report.
The copies of the condition report must be given to the tenant before the tenancy. Within 3 days of starting to occupy the premises, the tenant must return 1 copy of the condition report to the landlord signed by the tenant, or signed in a way that shows which parts of the report which the tenant agrees or disagrees with.
Read more about Victoria Condition Reports.
How is the Rental Bond paid?
Once the tenant has paid the Rental Bond to the landlord, the landlord must deposit it with RTBA within 10 business days. The Bond is lodged online by visiting the RTBA website.
When RTBA receives a Rental Bond deposit, it will send a deposit notice to the tenant and landlord. If a tenant does not receive a deposit notice, they should contact RTBA.
Can the tenants on a registered Rental Bond be changed?
When the tenants in a residential tenancy agreement change, then the tenants registered for the Rental Bond may be altered. This is done online by downloading, completing and signing the ‘Bond Transfer’ form from the RTBA website. This should be done within 5 days of the change in tenancy. All the outgoing and incoming tenants as well as the landlord should sign the form.
It is the responsibility of the outgoing and incoming tenants to exchange amounts between themselves to reflect their contribution to the Rental Bond.
What happens when the tenancy is continued?
A landlord cannot require a second Rental Bond from a tenant for a subsequent residential tenancy agreement when the tenant continues to occupy the same premises.
This rule does not apply if:
- No Rental Bond was paid under the first agreement, or
- The weekly rent is greater than $350.
What happens to the Bond?
At the end of residential tenancy agreement (i.e. when the agreement 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 from RTBA, the landlord or tenant must download, complete and sign a ‘Bond Claim’ form from the the RTBA website.
Payout by agreement
If the tenant and the landlord agree about how the Rental Bond should be paid out, then both parties should complete the ‘Bond Claim’ form and return it to RTBA. In this case, RTBA will pay out the amount as requested.
An application made jointly will not be valid if the tenant signs it before the last 7 days of the tenancy agreement. Furthermore, a landlord must not obtain the tenant’s signature on the ‘Bond Claim’ form without the form stating the amounts to be repaid and to whom it will be repaid.
Before either a landlord or tenant complete and signs a joint ‘Bond Claim’ form, both parties should be careful to ensure that the correct amounts are stated.
Payout to the tenant without the landlord’s consent
If a tenant is not able to obtain the consent of the landlord, then the tenant can apply to VCAT for an amount of the Rental Bond to be repaid to them. The tenant can only apply if the premises has been vacated by the tenant.
Payout to the landlord without the tenant’s consent
Landlords can also apply to VCAT for an amount to paid to them without the consent of the tenant. Depending on whether the tenant has given the landlord a forwarding address, it will be easier for the landlord to be repaid an amount from the Rental Bond.
The landlord may claim an amount of the Rental Bond for the following:
- Rent in Arrears—Rent in arrears if the premises has been vacated by the tenant,
- Damage—Damage to the premises by the tenant or their guests that is not fair wear and tear,
- Losses caused by Tenant—Any loss of the landlord’s goods caused by the tenant’s acts or omissions, other than fair wear and tear,
- Cleaning Costs—Cleaning costs due to the tenant’s failure to keep the premises reasonably clean, having regard to fair wear and tear,
- Abandonment Costs—Costs associated with the tenant abandoning the premises, or
- Other Liabilities—Other costs for which the landlord is liable which were to be paid by the tenant under the agreement—e.g. unpaid utilities.
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.
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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.