6 Tips to refunding a tenants Bond
Before a tenant moves into a property, a landlord should ask the tenant to pay a Bond. A Bond is held as a security in case something goes wrong during the tenancy. When it comes to the end of a tenancy, some people get nervous about the refunding of the Bond money. Tenants want the bond refunded as soon as possible and landlords want to ensure the property has been left in a reasonably clean and tidy condition and that there are no other outstanding costs. In a nutshell, if the tenant meets all their obligations, then the bond refund should be a straight forward process. But, there is so much to think about when it comes to refunding a Bond. Because of this, things can sometimes be missed while completing your inspection. Below are our 6 tips to help with a bond refund to the tenants of your rental property.
Ensure the tenants have paid their rent up to their move out day. If a rental ledger has been maintained throughout the tenancy this should be straight forward to check. If a rental ledger has not been maintained, it is possible you could be missing a few days or even weeks’ worth of rent. We have found it helps to contact the tenants a few weeks before their move out day and let them know how much is left owing in rent.
Confirm all keys, garage door openers and security cards have been returned. This takes us back to before the tenancy began and the importance of arranging the appropriate paperwork. Before the tenant moves in, take a photo of the keys that will be given to the tenant. That way it can easily be determined how many keys need to be returned at the end of the tenancy. This is crucial for the security of the future person who will reside at the property.
The key message here is to take time to thoroughly check the property. Do not rush as things will be missed. Take a copy of the initial inspection report to the bond inspection. There are two main benefits to this. The bond inspection will be structured and organised and it can be easily consulted to determine what condition the property was in before the tenant moved in. In your bond inspection report, comment on everything you can. Note down if items are clean and undamaged as well as if they are damaged. We find commenting on the condition of everything means nothing gets missed and the next property condition report is easier to complete.
Council rubbish bins
These can sometimes slip under the radar as the focus is on the property being reasonably clean and tidy. Ensure that the Council issued rubbish, recycling and organics bins are on the property and belong to that address. If the bins were empty before the tenant moved in, then it can be expected that they are empty when the tenant moves out.
Bond refund form
If there’s unpaid rent or other outstanding costs, discuss this with the tenant. Once it is agreed with both parties, the landlord can claim some of the Bond to cover the costs. A Bond Refund form needs to be completed by both the tenant and landlord. Ensure to get the tenant to complete their bank account details and sign the Bond Refund form. Also, check that both the landlord and tenant signatures match the Bond Lodgement form. This means both the tenant (and landlord, if some of the Bond is being claimed) will get their refund faster.
So, how long does it take to refund a bond? This depends on the time of year, the bond centre typically say between 5 to 7 working days to process a bond refund.
If something goes wrong
Sometimes it does go wrong. There could be multiple costs owing over the Bond amount held or it could be that the tenant or landlord do not agree to the Bond Refund. If this does happen, either the tenant or landlord needs to apply to the Tenancy Tribunal. From there, the Tenancy Tribunal will hear both parties views and make a judgement. If this does happen, it is important that the landlord has sound documents and evidence to present, for example, rental ledgers, inspection reports and images.
The groundwork for a smooth Bond Refund process really does start from before the tenants even move into the property. Getting quality tenants, having solid tenancy documents and regularly inspecting the property throughout the tenancy are just a few to name. I have heard of some people who don’t enjoy the confrontation when it comes to claiming some Bond money so they just don’t bother and end up losing money. A property manager is able to be objective, ensure the tenant is held liable for their responsibilities as a tenant and has all the processes and due diligence in place to make the Bond Refund process smooth and reduce the risk for landlords.