The purpose of the bond is to provide financial protection against any debt that the tenant may owe the landlord at the end of the tenancy. This includes rent, damage, missing items and cleaning.
So, what are the most common reasons the landlord can choose to withhold part or all of the bond? And which costs are likely to be justified?
1. Unpaid rent
If a tenant leaves behind unpaid rent, you can certainly use the bond to cover it.
2. Unpaid bills
There are some charges tenants are responsible for. If there is an outstanding amount that remains unpaid at the end of the tenancy, you can claim some or the entire bond once the tenancy is over.
It's important to understand the difference between "fair wear and tear" and damage.
If a tenant was living in the property the way it was intended, cleaning it regularly and not causing damage to the premises, the landlords can't charge tenants for any fair wear and tear.
Importantly, intentional damage is not fair wear and tear, nor is negligence. Normal wear and tear does not include a deterioration in the premises that could be prevented by reasonable conduct on the tenant’s part.
Some damages are fairy obvious - holes on the walls and broken blinds. Other things like misused appliances, pest infestation or accidental damage can be less so.
Remember, the landlord is the one responsible for normal wear and tear. The landlord must prove that damage is beyond fair wear and tear for compensation from the bond.
4. Cleaning and carpets
The only enforceable requirement under the RTA is for the property to be left reasonably clean and tidy.
Any clauses in a tenancy agreement which require professional cleaning at the end of the tenancy or talking about automatically deducting money from the bond for cleaning or any other reasons are not enforceable.
You can't deduct costs associated with repacing sun-faded wallpaper and peeled paint. This type of damage is likely to be attributed to normal wear and tear. And although you might want to re-paint the property to attract better tenants, you are unlikely to justify deducting costs associated with purchasing paint or hiring a painter from the bond.
6. Breaking lease
Even if a tenant breaks the agreement, you can't automatically keep the bond. You can charge tenants for ending the fixed-term tenancy early. These costs should be actual or reasonable costs. For example, the fee to re-advertise the property.
Most importantly, to avoid future disputes, it is essential to record the condition of the property at the start of the tenancy by filling our a property inspection report with your tenants. Taking pictures at the beginning of the tenancy and documenting the state of the premises when conducting regular property inspections will help to clearly show what damage occurred during the tenancy and record its progression. Having good records should help to prevent any problems with refunding the bond.
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.