bond payments
📖 What is bond payments? Meaning and definition
When a tenancy ends, a landlord may apply to the Tenancy Tribunal for compensation for various issues, such as damage to the property beyond fair wear and tear, unpaid rent, or other expenses like water rates or filing fees. If the Tribunal finds in favour of the landlord, it can order that a specific amount be paid to the landlord directly from the bond that was lodged at the start of the tenancy. This process ensures that the landlord can recover proven costs without needing to pursue the tenant separately for these funds.
The Tenancy Tribunal's order will specify the exact amount to be paid from the bond to the landlord, often detailing the breakdown of costs, such as for carpet cleaning, oven cleaning, wall damage repairs, or insurance excesses. The order also directs the Bond Centre, which holds the bond money, to release the specified sum to the landlord. Any remaining balance of the bond, after the landlord's awarded amount has been paid, is then typically paid back to the tenant.
For self-represented litigants, understanding bond payments means knowing that the bond is not automatically returned to the tenant at the end of a tenancy. Instead, it can be used to settle legitimate claims made by the landlord and approved by the Tenancy Tribunal. If a tenant disagrees with a landlord's claim, they have the opportunity to present their case to the Tribunal, as both parties can attend hearings to discuss the application for bond payment.
📋 Requirements
- A landlord must apply to the Tenancy Tribunal for compensation or payment from the bond.
- The Tenancy Tribunal must issue an order for payment from the bond.
- The landlord must prove that damage occurred during the tenancy and is more than fair wear and tear, or that rent arrears or other costs are owed.
- The tenant may be held responsible for costs like carpet cleaning, replacing items, oven cleaning, wall damage, insurance excesses, rent arrears, or water rates.
📝 Procedure
- The landlord applies to the Tenancy Tribunal for compensation, payment of the bond, or reimbursement of fees.
- A hearing is scheduled, which may be a video hearing or remote hearing.
- Both parties (landlord and tenant) are expected to attend the hearing, though a hearing can proceed in the absence of a properly served tenant.
- The Tenancy Tribunal assesses the landlord's claims and determines if the tenant is responsible for the alleged damages or outstanding payments.
- If claims are upheld, the Tribunal issues an order for a specific amount to be paid from the bond to the landlord.
- The Bond Centre is directed to apportion and pay the specified amount from the bond to the landlord, with any balance paid to the tenant.
💡 Examples
- A tenant was ordered to pay $1,139.80 from their bond to the landlord for costs including carpet cleaning, replacing a rubbish bin, oven cleaning, and wall damage repairs.
- The Tenancy Tribunal ordered $1,300.00 from a tenant's bond to cover insurance excesses for wall and door damage at the rented property.
- A landlord received $1,333.74 from the bond to cover rent arrears and unpaid water rates following the end of a tenancy.
- After a tenancy ended, a landlord applied for compensation and refund of the bond, leading to an order for bond payments to cover damages to the premises.
❓ Frequently asked questions
What is a bond payment in New Zealand tenancy law?
A bond payment is an amount of money that the Tenancy Tribunal orders to be paid from the tenant's bond to the landlord. This typically happens at the end of a tenancy to cover costs like property damage, unpaid rent, or other expenses.
Why would a landlord receive a bond payment?
Landlords receive bond payments to compensate them for proven costs such as damage to the property beyond normal wear and tear, outstanding rent, unpaid water rates, or even the filing fee for the Tenancy Tribunal application, as determined by the Tribunal.
What kind of damages can lead to a bond payment?
Damages that can lead to a bond payment include things like carpet cleaning, replacing damaged items (e.g., a rubbish bin), oven/stove cleaning, repairs for wall damage, and insurance excesses related to property damage, provided these are proven to the Tribunal.
What happens to the rest of the bond if a payment is made to the landlord?
If a portion of the bond is paid to the landlord, the remaining balance of the bond is then paid back to the tenant. The Tenancy Tribunal's order will specify how the total bond amount is to be apportioned.
Do I have to attend the Tenancy Tribunal hearing if my landlord applies for a bond payment?
While a hearing can proceed in your absence if you were properly served notice, attending the Tenancy Tribunal hearing allows you to present your side of the story and challenge the landlord's claims regarding bond payments. It is important to participate to ensure your interests are represented.
Can a bond payment cover unpaid rent?
Yes, the Tenancy Tribunal can order bond payments to cover rent arrears, as well as other outstanding charges like water rates, if these are proven to be owed by the tenant.