A Quick Overview Of Bonds For Renters

When you’re making the move into a new rental property, a few costs can quickly add up and leave you broke. The rental bond is usually the cost that inevitably causes the most confusion.

If you’re new to the rental game and don’t know much about bonds, they’re actually rather simple. A bond is an amount of money that your landlord can claim if you violate your lease agreement and they suffer a loss financially directly due to the violation. This money, some may know it as a security deposit, is paid when you sign your lease agreement. If no violations occur during your lease, you can reclaim your money at the end of your lease.

Bond amounts vary from property to property, but there a few guidelines written in stone that are always good to remember if you don’t want to be duped into a loss. For example, if your weekly rent is $500 or less, the maximum bond amount can not exceed four weeks of rent ($2000). Conversely, if you pay over $500 weekly, then there is no limit to how much bond can be charged. In this situation, it’s best to break out your lawyer persona and negotiate with your landlord.

If you’re signing a lease as a sub-tenant, then the head tenant, or landlord, is entitled to ask for a bond payment based on your weekly rent amount. This is to protect the head tenant from financial loses occurring during the sub-tenant’s agreement.

Though it isn’t necessary for a landlord to charge any bond amount, it is necessary for them to report any bond procured to the Residential Tenancies Authority (RTA) within a 10-day period. The RTA is a self-governing, impartial government organization that assists tenants and landlords and helps them to understand all legal rights and responsibilities. Essentially, the RTA acts as a middleman to ensure that both parties understand and adhere to all current RTA Act policies.

A question often asked is, “What if I can’t afford my bond amount?”

This isn’t a rare occurrence. For instance, if your bond amount is $2000, that’s money that not everyone has at their disposal. However, some landlords allow you to pay the bond amount in installments. Or, tenants can get a loan with the state’s Department of Housing. The Department of Housing provides interest-free loans for people who are unable to pay the full bond amount provided that you meet a number of criteria to qualify.

All applicants must fill out a Private Rental Assistance Household Application form, a Private Rental Assistance Individual Details form, and an Employers Declaration form which verifies your income (each household member). The Department of Housing website offers downloadable applications.

There is a plethora of information to take advantage of on this issue. Most of these situations are settled amicably, but sometimes things get drawn out and nasty. But the basic idea of rental bonds and their purpose is easy to comprehend. For any questions, visit the Residential Tenancies Authority website. Here, you will find all documents and information concerning tenants and landlords.

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Author : Johan Kriegbaum
E-mail : submissions@isnare.net

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