tenancy bond
📖 What is tenancy bond? Meaning and definition
In New Zealand, a tenancy bond acts as a financial safeguard for landlords. When a tenancy ends, if there are costs for cleaning, rubbish removal, repairs to walls, doors, kitchen drawers, or carpet damage, these can be claimed from the bond. The Tenancy Tribunal can order that a portion of the bond be paid to the landlord to cover such expenses.
For example, if a tenant is ordered to pay for cleaning or repairs, the amount awarded to the landlord can be deducted from the bond. The remaining balance of the bond, if any, is then refunded to the tenant. The Tenancy Tribunal specifies how the bond is to be apportioned between the landlord and the tenant.
If the costs awarded to the landlord exceed the bond amount, the tenant may be ordered to pay the difference directly to the landlord. Conversely, if the landlord's claims are less than the bond, the landlord receives their awarded amount from the bond, and the tenant receives the remainder. The bond is typically held by a third party, such as the Bond Centre, and its release is often subject to orders from the Tenancy Tribunal.
📋 Requirements
- A tenancy bond is paid by the tenant.
- The bond is held to cover potential costs incurred by the landlord.
- The Tenancy Tribunal can order the bond to be used for specific costs like cleaning, repairs, or rubbish removal.
- Any remaining bond after deductions is refunded to the tenant.
📝 Procedure
- The landlord or tenant applies to the Tenancy Tribunal regarding bond apportionment.
- A hearing is held, which may be attended by both parties or just one.
- The Tenancy Tribunal assesses claims for costs such as cleaning, repairs, or damages.
- The Tribunal issues an order specifying how the bond is to be apportioned.
- The Bond Centre or agent pays the specified amounts from the bond to the landlord and the tenant.
💡 Examples
- A tenant was ordered to pay $711.80 for water rates, cleaning, rubbish removal, and repairs, with $2,200.00 from the bond being used to offset these costs.
- The Tenancy Tribunal ordered $600.00 from a bond to be paid to the landlord for door damage and cleaning, with the remaining $801.60 returned to the tenant.
- A landlord was awarded $1,254.00 from the bond to cover an insurance excess for carpet damage and a previous order application fee, with the rest of the $1,960.00 bond going back to the tenants.
- If a tenant fails to attend a hearing, the Tribunal may still make an order regarding the bond based on the landlord's evidence.
❓ Frequently asked questions
What is a tenancy bond for?
A tenancy bond is a security deposit paid by a tenant to cover potential costs like unpaid rent, property damage, or cleaning expenses at the end of a tenancy, as seen in cases where bonds were used for repairs and cleaning.
Who holds the tenancy bond?
While the excerpts mention the 'Bond Centre' and an 'agent' being involved in paying out the bond, they do not explicitly state who holds it initially. However, the Tenancy Tribunal directs who receives portions of the bond.
Can a landlord claim the entire bond?
A landlord can claim from the bond for specific costs like cleaning, repairs, or rubbish removal, but only the amount awarded by the Tenancy Tribunal. Any remaining amount after these deductions is refunded to the tenant.
What happens if the bond doesn't cover the costs?
If the costs awarded to the landlord by the Tenancy Tribunal exceed the bond amount, the tenant will be ordered to pay the difference directly to the landlord, as shown in a case where the tenant owed an additional $711.80.
How is the bond released at the end of a tenancy?
The Tenancy Tribunal typically issues an order specifying how the bond is to be apportioned, directing who receives which portion of the bond, whether it's the landlord for costs or the tenant for the remainder.
What if I disagree with the landlord's claim on the bond?
If you disagree with a landlord's claim, you can attend the Tenancy Tribunal hearing to present your case. The Tribunal will then make a decision on how the bond should be apportioned based on the evidence presented by both parties.