Finance & Tax
The rental bond is one of the most important financial aspects of a tenancy for both landlords and tenants. Understanding the rules around bond collection, lodgement, and claims is essential for staying compliant and avoiding disputes. This guide covers the key rules in each state and how to manage bonds effectively.
Every state and territory in Australia sets a maximum bond amount that landlords can charge. In most cases, the limit is tied to the weekly rent.
In every state and territory, landlords are required to lodge the bond with the relevant government authority within a specified timeframe after receiving it. Landlords cannot hold the bond themselves (except in certain limited circumstances in some jurisdictions).
Failure to lodge the bond on time can result in penalties and may prejudice your ability to make a claim against the bond at the end of the tenancy.
At the end of a tenancy, the bond is returned to the tenant unless the landlord has a legitimate claim. Valid reasons to claim from the bond include unpaid rent, damage beyond fair wear and tear, cleaning costs if the property is not returned in a reasonably clean condition, and replacement of lost keys or security devices.
The key concept is "fair wear and tear." This refers to the natural deterioration that occurs through normal use of the property. Faded paint, minor scuff marks on walls, worn carpet in high-traffic areas, and small nail holes from hanging pictures are all examples of fair wear and tear that you cannot claim from the bond. Holes in walls, stained or burnt carpet, broken fixtures, and damage from pets are not fair wear and tear and can be legitimately claimed.
To make a claim, you generally need to complete a bond claim form (available from the relevant state authority), provide evidence of the damage (photos from the entry condition report versus exit condition report), and obtain quotes or invoices for the cost of rectifying the damage. Both parties must agree on the claim amount, or the matter is referred to the relevant tribunal.
If the landlord and tenant cannot agree on the bond disposition, either party can apply to the relevant tribunal for a determination. In NSW, this is NCAT (NSW Civil and Administrative Tribunal). In Victoria, VCAT. In Queensland, QCAT. Each tribunal has its own application form and fee (typically $50 to $100).
The tribunal will consider the evidence from both parties, including the entry and exit condition reports, photographs, receipts, and any correspondence. Having thorough documentation significantly strengthens your position. This is why detailed condition reports at the start and end of every tenancy are so important.
Abode offers two options for bond management to suit different landlord preferences.
Abode-managed bonds: Abode collects the bond from the tenant, holds it in a trust account, and handles lodgement with the relevant state authority on your behalf. At the end of the tenancy, Abode facilitates the bond return or claim process, including preparing the necessary paperwork and coordinating with the bond authority. This option is ideal for landlords who want a hands-off approach.
Self-managed bonds: The landlord collects and lodges the bond directly with the state authority. Abode tracks the bond amount and status within the platform but does not handle the funds. This option suits landlords who prefer to manage the financial aspects themselves or who have existing processes in place.
Regardless of which option you choose, Abode's AI-powered inspection feature creates detailed photographic condition reports at move-in and move-out, giving you the evidence you need to support any bond claims. The system automatically compares entry and exit photos, flagging damage and providing condition scores that can be used as evidence in a dispute.