bond payment
📖 What is bond payment? Meaning and definition
In New Zealand tenancy law, a bond payment is a financial safeguard for landlords. When a tenancy ends, if there are outstanding costs such as rent arrears or damage to the property beyond normal wear and tear, the landlord can apply to the Tenancy Tribunal for a portion of, or the entire, bond to cover these expenses. The Tenancy Tribunal determines how the bond is to be paid out, often apportioning it between the landlord and the tenant(s).
For example, if a tenant owes rent or has caused damage requiring repairs or cleaning, the Tribunal may order that an amount from the bond be paid to the landlord. Any remaining bond money, after deductions for landlord claims, is then paid back to the tenant(s).
The bond is typically held by the Bond Centre, a neutral third party. The Tenancy Tribunal's orders specify how the Bond Centre is to release the funds, either to the landlord, the tenant, or split between them. This process ensures that disputes over bond money are resolved fairly, based on evidence presented to the Tribunal.
📋 Requirements
- The tenancy must have ended or be subject to termination.
- There must be an application made to the Tenancy Tribunal regarding the bond.
- The landlord must prove the amount owing for rent arrears or the cost of damages beyond fair wear and tear.
- The Tenancy Tribunal must issue an order for the payment or apportionment of the bond.
📝 Procedure
- A landlord or tenant applies to the Tenancy Tribunal.
- A hearing is held, often remotely, where both parties can present their case.
- The Tenancy Tribunal assesses evidence, such as rent records or proof of damage.
- The Tribunal issues an order specifying how the bond is to be paid out by the Bond Centre, including any apportionment between parties.
💡 Examples
- A landlord is awarded $3,877.00 for rent arrears and a filing fee, with $2,200.00 of that amount to be paid from the bond held by the Bond Centre.
- The Tenancy Tribunal orders $500.00 from the bond to be paid to the landlord for carpet patching and curtain replacement, with the remaining $770.00 returned to the tenants.
- Following a tenancy, a landlord successfully claims $1,509.25 from the bond to cover costs for plumbing repairs, general cleaning, and carpet cleaning.
- If a tenancy is terminated due to rent being over 21 days in arrears, the landlord can apply for the bond to cover some of the outstanding rent.
📚 Legal basis
- Residential Tenancies Act 1986
❓ Frequently asked questions
What is a bond payment in a New Zealand tenancy?
A bond payment is a security deposit paid by a tenant at the start of a tenancy, which is held by the Bond Centre. It can be used at the end of the tenancy to cover costs like unpaid rent or damage to the property.
Who holds the bond payment during a tenancy?
The bond payment is held by the Bond Centre, which is a neutral third party. This ensures the money is secure and can only be released according to an agreement between the parties or an order from the Tenancy Tribunal.
When can a landlord claim money from the bond?
A landlord can claim money from the bond to cover rent arrears, cleaning costs, or repairs for damage to the property that is beyond normal wear and tear, typically at the end of a tenancy. They must apply to the Tenancy Tribunal to do so.
What happens if the bond doesn't cover all the costs owed to the landlord?
If the bond does not cover the full amount owed to the landlord for rent arrears or damages, the Tenancy Tribunal may order the tenant to pay the remaining balance directly to the landlord, in addition to the bond payment.
Do I need to attend a hearing for a bond payment dispute?
Yes, both landlords and tenants are expected to attend Tenancy Tribunal hearings concerning bond payment disputes. The Tribunal may proceed in the absence of a party if satisfied that notice of the hearing was properly given.
How is the bond payment apportioned?
The Tenancy Tribunal decides how the bond is apportioned based on the evidence presented. It can be paid entirely to the landlord, entirely to the tenant, or split between them to cover specific costs like rent arrears or damages.