bond release
📖 What is bond release? Meaning and definition
In New Zealand, when a tenancy ends, the bond that was paid at the start of the tenancy needs to be released. This process determines who receives the bond money, which is typically held by a company or agency. The release can be agreed upon by both the landlord and tenant, or it can be decided by the Tenancy Tribunal if there's a dispute.
The Tenancy Tribunal can issue an order for the bond to be released to a specific party, or split between them, to ensure certainty and resolve any issues arising from the tenancy. For example, if a tenant agrees to pay the landlord the bond as part of a settlement deed, the Tribunal can order the bond's release to the landlord to facilitate this agreement.
Conversely, a tenant might seek the release of the bond to themselves, arguing that the landlord terminated the tenancy without grounds. The Tribunal will then assess the claims based on the balance of probabilities, meaning the party bringing the application must show their claim is more likely than not. The Tribunal can also split the bond if, for instance, there are claims for compensation or cleaning costs from the landlord, and the tenant is entitled to the remainder.
📋 Requirements
- The tenancy has ended.
- There is a bond held by a company or agency.
- An agreement between landlord and tenant, or a Tenancy Tribunal order, is required for the bond to be released.
- Claims made to the Tenancy Tribunal must be established on the balance of probabilities.
📝 Procedure
- Parties may reach a written settlement, such as a deed, agreeing on how the bond should be paid out.
- If there is no agreement, either the landlord or tenant can apply to the Tenancy Tribunal for a bond release order.
- The Tenancy Tribunal holds a hearing, which may be by telephone or video, with both parties present.
- The Tribunal considers the claims and evidence presented by both parties.
- The Tribunal issues an order specifying how the bond is to be paid out, either to the landlord, the tenant, or split between them.
💡 Examples
- A landlord and tenant mutually agree at a Tenancy Tribunal hearing that the full bond should be paid to the landlord to settle matters arising from the tenancy.
- A tenant applies to the Tenancy Tribunal for the bond release, claiming the landlord ended the tenancy without proper grounds, and the Tribunal orders the bond to be paid to the tenant.
- The Tenancy Tribunal orders a bond to be split, with a portion going to the landlord for cleaning costs and compensation for damages, and the remainder returned to the tenant.
- After a written settlement deed is signed where the tenant agrees to pay the bond to the landlord, the Tenancy Tribunal makes an order to ensure the bond is released to the landlord without further problems.
📚 Legal basis
- Residential Tenancies Act 1986
❓ Frequently asked questions
Who holds the bond money during a tenancy?
The bond money is typically held by a company or agency, not directly by the landlord or tenant, until the tenancy ends and a release is processed.
What happens if the landlord and tenant can't agree on the bond release?
If an agreement cannot be reached, either party can apply to the Tenancy Tribunal, which will hear the case and make an order on how the bond should be released.
Can the Tenancy Tribunal order the bond to be split?
Yes, the Tenancy Tribunal can order the bond to be split between the landlord and tenant, for example, to cover landlord claims for compensation or cleaning, with the rest returned to the tenant.
What does 'on the balance of probabilities' mean for a bond release application?
It means the party making the claim must show that their version of events or their entitlement to the bond is more likely to be true than not, based on the evidence presented to the Tenancy Tribunal.
Do I need a signed form to get my bond released?
While a signed bond form can facilitate the release, if there are issues with obtaining one, the Tenancy Tribunal can make an order for the bond's release to ensure certainty for both parties.
How quickly is a bond released after a Tenancy Tribunal order?
The Tenancy Tribunal orders often specify that the bond is to be paid 'immediately' after the decision is made, ensuring a prompt resolution.