At the commencement of a Lease Agreement, the tenant is usually required to pay monies in advance to the landlord, known as a bond. The bond is used as a security in case the tenant fails to comply with the terms of the Lease Agreement and can be used to indemnify the landlord for any monies that they are out of pocket following the contravention. The amount of bond required will depend on the terms of the Lease, however it is common for the bond to be the equivalent to two or four weeks rent.
Once received by the landlord, the bond must be paid to NSW Fair Trading. Upon receipt of the bond, NSW Fair Trading will notify the tenant of the deposit and provide a bond number. At the termination of the Lease Agreement, the tenant can make an application for the bond money to be refunded to them. The amount of bond to be refunded to the tenant depends on whether there is a dispute about their entitlement to the bond.
When making an application for a refund, the tenant can have the landlord agree to their claim and sign the same application, following which a refund will be made, or, if the landlord does not agree, the tenant can lodge the application unilaterally. NSW Fair Trading will subsequently provide the landlord with time to formally contest the refund application. Common examples of bond disputes include where the tenant has failed to pay all monies owing under the terms of the Lease Agreement, or if the tenant has failed to adequately maintain the property and keep it in a state of good repair necessitating the landlord to undertake remedial works.
To challenge the refund application, the landlord needs to lodge an application with NCAT and also notify NSW Fair Trading that they have elected to pursue the bond dispute with NCAT. Once at NCAT, the Member presiding over the case, will determine the amount of bond, if any, to be refunded to the landlord or the tenant.
If you are a landlord or tenant and are in dispute over who is entitled to the bond, we recommend that you seek legal advice to determine your rights under the Lease Agreement and to become further informed about the NCAT process of objecting to a refund application.
If you wish to speak with one of our Lease Advice & Litigation Lawyers, please contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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