What is bond?
Bond is the money that landlords can ask for to use as security when a new tenancy starts. This money is held by Tenancy Services for the duration of the tenancy. If any careless or intentional damage to the property occurs during a tenancy, or if there is unpaid rent the landlord can use the bond to cover these costs. If a tenant leaves the property in reasonable condition and has paid their rent in full they can expect to have their bond refunded at the end of their tenancy.
How much bond is charged?
The maximum amount of bond that a landlord can charge is the equivalent of 4 weeks’ rent. A landlord can choose to charge less than 4 weeks’ bond at their discretion. For example, landlords may decide that a full 4 weeks’ bond is not necessary, or it may be beneficial to charge a lesser bond in a bad rental market in order to attract more tenants.
Can you charge extra bond for pets?
Charging extra bond for pets is illegal in New Zealand. There are other things that can be done to make you feel more comfortable renting to tenants with pets.
Lodging bond
If you collect bond you must lodge it with Tenancy Services within 23 days of receipt as it is illegal not to lodge. If you’re a myRent customer we lodge the bond for you, so you have one less task to worry about.
Why should you collect bond?
By collecting bond you are building in a sense of security to your tenancy. While we all hope to have perfect tenants who leave the property exactly as they found it, there are occasions when damages extend beyond normal wear and tear which demands repairs.
Refunding or withholding bond
If everything is in order at the end of the tenancy the landlord should fill out a bond refund form with Tenancy Services to process. Bonds are typically refunded within 5 working days of Tenancy Services receiving a completed refund form which is signed by the landlord and tenants.
If a tenant has unpaid rent or intentional or careless damage at the end of their tenancy, the landlord can withhold part or all of the bond.
Dealing with disputes
If the landlord and tenant can’t agree on the bond refund amount, either party can take the matter to the Tenancy Tribunal. A mediator can help the landlord and tenant reach an agreement, or if that fails, the case will go to a hearing in the Tribunal. Cases are usually heard by the Tribunal within 20 working days, although this timeframe can extend during especially busy periods.
Preventing problems with bond
To help minimise disputes, the landlord and tenant should conduct an initial inspection and sign a property inspection report at the start of the tenancy. This can be used at the end of the tenancy to clearly show any damage that occured over the tenancy period. Inspections should continue throughout the tenancy to track the progression of any damage, and a final inspection should be conducted once the tenant moves out. Having these records should help to prevent any problems with refunding the bond.
Need assistance with Property Inspections? myRent is here to help! Book a one-off professional inspection service (no strings attached!) or outsource all your property inspections.
