SUNBIZ

Refund Of Rental Bond Money

What is a rental bond? A rental bond is money paid by the tenant at the start of a tenancy agreement. It is used as financial protection for the lessor
29 May 2017 09:42
Refund Of Rental Bond Money

What is a rental bond?

A rental bond is money paid by the tenant at the start of a tenancy agreement. It is used as financial protection for the lessor in case the tenant breaches the terms of the agreement. A bond is sometimes referred to by other names such as a security deposit, linen deposit, key (or security card) deposit. However, if it is money paid as protection over the property and its inclusions that is not rent – then it is a rental bond. It is paid in addition to rent.

 

Does a rental bond have to be taken?

There are no legal provisions that require a bond to be taken by a landlord from a tenant. However, most landlords/agents take bond money as security for the premises. They may need to claim a part or all of the bond money at the end of the tenancy if the tenant incur them percuniary losses by damaging the premises, left unpaid bills or owing rent.

 

When is a bond taken?

A bond can be taken only after the prospective tenant is given a copy of the proposed tenancy agreement containing any special terms that apply to the tenancy, as well as copies of other rlevant documents relating to a tenancy such as condition report –etc..

 

What if the tenant can not afford the bond?

If the tenant can not afford the bond money upfront, they may be able to pay off the bond in instalments over time if the lessor/agent agrees by making part-payments;

 

How is a bond refunded at the end of a tenancy?

The bond can only be refunded once the notice ending the tenancy has been issued and the tenant has vacated the property. If no notice of termination has been provided by the parties, bond can only be refunded once the tenants have vacated the property.

 

If the parties agree

If the tenant/s and lessor/agent agree on how the bond is to be refunded, they should document the exchange together and refund the bond as directly to the tenant.

 

If the parties don’t agree

If the tenant/s and lessor/agent do not agree on how the bond is to be refunded, any party to the bond (tenant or lessor/agent) can file a claim to the Small Claims Tribunal (SCT) within a reasonable time after the vacation of the property. The SCT will process the form received, and send the other party a n otice of claim.

 

The person receiving the Notice of claim has the right to:

  • dispute the claim in the SCT, or;
  • agree with the other person’s claim by signing the back of the Notice of claim and sending it to the SCT, or
  • come to the SCT on the date of hearing stated in the notice.

 

What is the Commission’s involvement on bond money refund?

The Commission will only be involved in the case of bond refund, if appears that the landlord or agent is witholding the bond for no valid reasons or for unjustified damage claims. As such, an unfair treatment of tenants in the refund of bond would be dealt with by the Commission in accordance with the provisions of the Commerce Commission Act 2010 (CCA2010) which involves mediation for a settlement or legal investigation.

 

Advice from the Commission

It is an offence under Section 76 of the Commerce Commission Act 2010 (CCA2010) for a landlord or agent to unfairly withhold or deduct bond money of a tenant at the end of a tenancy. Any landlord or agent found contravening this provision would be dealt under the CCA2010. If you come across such landlords or agents, report the matter immediately to the Commission on 3372178 or 8921991. To all landlords and agents, please remember, you can deduct bond money for any unpaid bills, damages or unpaid rents of your tenant, but refrain from engaging in any way that is unfair or would be deemed to be unfair towards your tenant.

 

Feedback:  selita.bolanavanua@fijisun.com.fj 



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