Insurance & Protection
Discovering that a tenant has damaged your property is one of the most stressful experiences for a landlord. Whether it is minor damage found during a routine inspection or significant destruction discovered at move-out, knowing the correct steps to take protects your financial interests and ensures you can recover costs through the bond, insurance, or the tribunal.
The first step is to objectively assess whether the damage exceeds fair wear and tear. This distinction is critical because landlords cannot claim from the bond for normal deterioration.
Fair wear and tear includes faded paint or curtains from sun exposure, minor scuff marks on walls from normal furniture placement, worn carpet in high-traffic areas, small nail holes from hanging pictures (generally 2 to 3 per room is considered reasonable), loose door handles from regular use, and faded or yellowed light switch plates.
Damage beyond fair wear and tear includes large holes in walls, burns or significant stains on carpet, broken windows, doors, or fixtures, damage from unauthorised pets (scratched floors, urine stains), mould caused by the tenant's failure to ventilate, broken tiles, smashed light fittings, and graffiti or deliberate property defacement.
The age and condition of the item at the start of the tenancy matters. A 15-year-old carpet that has some additional wear is treated differently from a brand-new carpet that has been stained or burned. Tribunals consider the remaining useful life of the item and depreciate claims accordingly.
Thorough documentation is essential for any claim you intend to make. As soon as you discover the damage, photograph and video everything. Take wide shots showing the context and close-ups showing the detail. Include a ruler or coin for scale where relevant. Photograph from the same angles as the entry condition report so the comparison is clear.
Create a written inventory of all damage, noting the room, the item affected, a description of the damage, and an estimated repair or replacement cost. Cross-reference each item with the entry condition report to demonstrate that the damage was not present at the start of the tenancy.
Obtain written quotes from licensed tradespeople for the cost of repairing or replacing each damaged item. At least two quotes per item strengthens your position. Keep all quotes, invoices, and receipts as evidence.
If the damage is within the bond amount, the simplest resolution is a bond claim. Contact the tenant in writing, outline the damage identified, provide the supporting evidence (photos, condition report comparison, quotes), and propose the amount you wish to claim from the bond.
If the tenant agrees, both parties complete and sign the bond disposition form from the relevant state bond authority (Rental Bonds Online in NSW, RTBA in Victoria, RTA in Queensland, etc.). The bond authority releases the agreed amounts to each party.
It is always worth attempting an informal resolution first. Many tenants will agree to a reasonable claim when presented with clear evidence. A calm, professional approach with well-documented evidence is far more effective than an adversarial one.
Sometimes the cost of repairing damage exceeds the bond amount. In a typical tenancy with a 4-week bond of $2,200, significant damage can easily exceed this figure. When this happens, you have several options.
First, claim the full bond. Then, apply to the relevant tribunal (NCAT, VCAT, QCAT, etc.) for an order that the tenant pay the remaining amount. Provide all your evidence: entry and exit condition reports, photographs, quotes, and invoices. The tribunal can order the tenant to pay compensation for damage beyond the bond.
Be aware that even with a tribunal order in your favour, collecting the money can be difficult if the tenant does not have the means to pay. Tribunal orders can be enforced through debt recovery processes, but this takes time and may involve additional costs.
If you and the tenant cannot agree on the bond or the damage compensation, you can apply to the relevant tribunal for a determination.
In NSW, applications to NCAT cost approximately $55 for claims under $10,000 and $110 for claims between $10,000 and $30,000. Hearings are typically scheduled within 4 to 8 weeks. You can represent yourself, and most residential tenancy matters are heard by a single tribunal member.
In Victoria, VCAT application fees are around $65 for standard claims. Hearings are usually within 4 to 6 weeks. VCAT encourages mediation before hearing, and many disputes are resolved at the mediation stage.
In Queensland, QCAT has a two-step process: first, the RTA attempts conciliation. If conciliation fails, the matter proceeds to a QCAT hearing. The application fee is approximately $80.
At the hearing, present your evidence in an organised manner. Bring the entry and exit condition reports, all photographs (printed and digital), quotes and invoices, any correspondence with the tenant about the damage, and the lease agreement. Be factual and avoid emotional arguments. Tribunals make decisions based on evidence, not sentiment.
If the damage is deliberate or malicious, your landlord insurance policy should cover it. Contact your insurer as soon as you discover the damage. Most policies require you to report malicious damage promptly and to take reasonable steps to mitigate further damage (such as securing the property if locks or windows have been broken).
The insurer will send an assessor to inspect the damage and determine the claim value. Be prepared to provide the entry condition report, photographs of the damage, a police report (if applicable, and most insurers require one for malicious damage claims), and quotes for repair or replacement.
Malicious damage claims typically have a higher excess ($500 to $1,000 or more) than standard claims. You can still claim from the bond for the excess amount. The insurer may also pursue the tenant directly to recover the claim cost through subrogation.
This is one of the key reasons landlord insurance is essential. A single malicious damage incident can cost $10,000 to $50,000 or more. Without insurance, these costs come directly out of your pocket and may never be recovered from the tenant.