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Rental Bonds in Victoria

Rental Bonds in Victoria

Blog

2023-05-13

Moving into a new rental property can be an exciting and sometimes daunting experience. One aspect of this process is understanding rental bonds, which are an important part of renting in Victoria, Australia. In this blog post, we will provide a comprehensive overview of rental bonds, covering everything from the purpose of a bond to how you can get your bond back at the end of your tenancy.

Bond#

What is a bond?#

According to Section 3 of the Residential Tenancies Act 1997 “bond” means:


In simpler terms, a bond is a sum of money that a renter, resident or site tenant pays to their rental provider (usually a landlord) as a form of security to ensure they fulfill their obligations under the rental agreement.

A bond and rent are separate payments. Bonds cannot be used to pay rent.

What is the purpose of a bond?#

The primary purpose of a bond is to protect the rental provider from financial loss if the renter breaches the terms of the rental agreement. This can include unpaid rent, damage to the property, or any other costs resulting from the renter's actions.

Bond Amount#

How is the bond amount determined?#

The bond amount is typically determined by the rental provider and is usually based on the weekly rent of the property. For example, if the weekly rent for a house is $500, the bond amount may be calculated as 4 weeks' rent, which would be $2000.

What is the maximum bond amount?#

The maximum bond amount varies depending on the type of property and the weekly rent amount:

  • Unfurnished Property: 1 month's rent (if rent is ≤ $900 per week)
  • Properties with rent > $900 per week: No maximum amount
  • VCAT Determined Bond: No maximum amount. [1]

[1] In some cases, the Victorian Civil and Administrative Tribunal (VCAT) may determine the bond amount. This typically reserved for historical properties, where the rental provider may be at risk of financial loss due to the property's age.

How is a bond split in a shared tenancy?#

In a typical sharehouse scenario, where multiple housemates share a rental property, the bond is usually split equally amongst the renters. For example, if three housemates are renting a property with a weekly rent of $500, each housemate would contribute $666.67 ($2000 divided by 3) towards the bond.


In a family house (with parents and children), the bond amount is typically paid by the adults, who are responsible for the rental agreement. The bond is still calculated based on the weekly rent amount, and it is up to the family members to determine how they will split the bond payment amongst themselves.

How can I calculate my bond?#

To calculate your bond, you can use the following formula:


For example, if your weekly rent is $500 and your bond is equivalent to 4 weeks' rent, your bond amount would be $2000 ($500 x 4).

Paying your bond#

When renting a property, the tenant pays the bond to the rental provider. The rental provider is responsible for lodging the bond with the Residential Tenancies Bond Authority (RTBA).

When should you pay your bond?#

You should only pay your bond after you have:

  1. Signed a Rental Agreement
  2. Been given a completed condition report
  3. Received a bond lodgment form

It is important to ensure these steps are completed before paying your bond to protect your rights and ensure a smooth bond lodgment process.

What is the standard payment method?#

The standard method for paying a bond is through electronic funds transfer, such as EFT or BPAY.

Bond Lodgement#

What is bond lodgement, and why does it occur?#

Bond lodgement is the process of the rental provider submitting the tenant's bond to the Residential Tenancies Bond Authority (RTBA). This is a legal requirement in Victoria, and it ensures that the bond is held securely and managed independently of the rental provider.

Where does the bond go?#

The rental provider must lodge the bond with the Residential Tenancies Bond Authority (RTBA).

Receipt and bond number#

The RTBA will provide a receipt, which includes the bond number as proof of lodgement. This is typically received via email, or by mail if an email address was not provided. If you haven't received a bond receipt within 15 business days, you should call the RTBA on 1300 137 164.

RTBA Online Portal#

You can use the RTBA Online Portal to check on your bond transaction. The typical processing time for bond lodgements is one business day.

Getting your bond back#

When are you eligible to claim your bond back?#

You can begin the process of claiming your bond back once the rental agreement has come to an end. This occurs when you:

  1. Vacate the property and,
  2. Return the keys to the rental provider.

Keep in mind that you are required to pay the rent until the end of your notice period, or longer if you still have the keys after that time.

Initiating the bond claim process without the agreement of the rental provider may result in a longer waiting period to receive your bond refund.

Steps to claim your bond#

The most efficient and convenient way to claim your bond is to do so online through the RTBA Website.

What is the bond refund process?#

When renters initiate the bond claim process themselves, the bond refund generally takes between 14 and 20 business days. This timeframe allows for the rental provider and any other renters to be notified of the claim and to contest it if they choose to do so.


A joint claim can be made when both you and the rental provider agree on the bond repayment amount. This type of claim can be submitted at any time, even before the rental agreement comes to an end.

How will the RTBA refund your bond?#

  • Australian Bank Accounts: The RTBA refunds the bond to Australian bank accounts. Make sure to provide your bank account details when completing the bond claim form.
  • Non-Australian Bank Account: If you are overseas and do not have an Australian bank account, the RTBA can either: a) issue a cheque for deposit in an overseas bank, or b) arrange an overseas bank transfer for a fee.

How long does it take for the bond refund to be processed?#

Once the bond claim has been submitted, the RTBA usually processes the refund within one business day.

Have the 2021 Rental Reforms impacted rental bonds?#

The 2021 Rental Reforms introduced a range of changes to Victoria's rental laws, aiming to provide better protection and support for renters and rental providers.

Two key changes affecting bonds include:

  • Restrictions on what renters can be asked about their bond history
  • Changes to the bond claims process, allowing renters to make a bond claim directly to the Residential Tenancies Bond Authority (RTBA)

FAQ#

What happens to the bond if a housemate moves out?#

When renters move in and out during a rental agreement (lease), they need to transfer the names on the rental agreement by informing the rental provider (landlord).

The rental provider must then update the bond by replacing the previous renter’s name with the new renter’s name. This must be done by completing a renter transfer with the Residential Tenancies Bond Authority (RTBA).

It is important to note that the RTBA does not manage bond payments for renters moving in and out during an agreement. If a renter moves out during an agreement and needs to be repaid for the amount they contributed to the bond, they must make their own arrangements with the other renters for this to happen. To claim a bond at the end of a rental agreement, all renters named on the bond need to sign the bond claim form.

How do bonds work in a Sublet arrangement?#

In a sublet arrangement, the head renter can ask the sub-renter to pay a bond. The head renter must lodge the bond with the Residential Tenancies Bond Authority (RTBA) within 10 business days. The head renter can lodge a bond online by registering as a rental provider.

It's essential for both the head renter and sub-renter to understand their rights and responsibilities in a sublet arrangement. Make sure to discuss the bond and other terms of the sublet agreement before entering into this type of arrangement.

Final thoughts#

Understanding rental bonds in Victoria is crucial for both renters and rental providers. It is essential to be aware of your rights and responsibilities regarding bond amounts, payment, lodgement, and claiming your bond back at the end of your tenancy. By familiarizing yourself with these processes, you can ensure a smoother and more enjoyable renting experience.

Don't hesitate to discuss any bond-related concerns with your rental provider or seek advice from relevant authorities such as the RTBA or Consumer Affairs Victoria. Here's to a successful and stress-free renting experience!



Legal Disclaimer: This blog post is intended for informational purposes only and should not be considered legal advice or a substitute for professional legal counsel. The information provided in this post is accurate and current as of the date of publication. However, laws and regulations may change, and the content may not be updated accordingly. We strongly recommend consulting with a qualified legal professional before making any decisions based on the information provided in this post. Sharehouse and the author disclaim any liability arising from the use or reliance on this information.


Additional Resources#


Next post

Victoria Ending Your Tenancy

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