A guarantee is an agreement where a person, other than you, agrees to pay the landlord for any losses incurred if you breach any part of your tenancy agreement or the Residential Tenancies Act.
Your landlord can only ask for a guarantee as well as a bond when:
- The rent is more than $350 a week, or
- You are renting your landlord’s principal place of residence until they resume living there. This condition must be stated in the lease If there is a guarantee but no bond, the guarantee can only be enforced if it is equal to one month’s rent.
Most landlords will ask you to pay a bond. A bond acts as a security that you will meet the terms of your tenancy agreement. If you fail to keep the property clean, cause damage or are in rent arrears, your landlord can claim some or all of the bond when the tenancy ends.
If your rent is $350 a week or less, the bond cannot be more than one calendar month’s rent. Your landlord cannot increase the bond during your tenancy.
Looking after the bond
Your bond money is held by the Residential Tenancies Bond Authority (RTBA).
If your landlord receives a bond, they must give you a completed and signed official ‘Bond Lodgement’ form to sign.
‘Bond Lodgement’ forms can be generated on the RTBA Online website at rentalbonds.vic.gov.au. Forms are also available from Consumer Affairs Victoria: call 1300 55 81 81.
Payment must be made by cheque or money order to the ‘Residential Tenancies Bond Authority’. The postal details are on Useful Contacts and on the ‘Bond Lodgement’ form. The RTBA will send a receipt to you and your landlord. Contact the RTBA if you have not received a receipt 15 business days after paying your bond.
Bonds from the Director of Housing (DoH)
If you are on a low income and can afford to rent privately, but are struggling to pay the up-front costs, you may be eligible for a bond loan from the DoH.
A DoH ‘Bond Lodgement’ form must be used when the DoH contributes some or all of the bond. The DoH will issue the form with the bond payment when a bond loan is approved.
To find out if you are eligible for a DoH bond loan, contact the DoH through the Office of Housing (see Useful Contacts for details).
Dishonoured bond payments
If a bond payment to the RTBA is dishonoured, the landlord can organise to collect the money and re-lodge the bond, give you a 14-day ‘Notice to Vacate’ for nonpayment of a bond, or waive the bond.
Difference between bond and rent
Your bond and rent are separate payments. You may be fined for treating any part of the bond as rent. You must continue to pay rent until you
vacate even if:
- Your landlord has refused to do repairs
- You have given your landlord notice of your intention to vacate
- Your landlord has given you a ‘Notice to Vacate’.
The ‘Condition Report’
If you have paid a bond, your landlord must prepare a ‘Condition Report’, which notes the property’s general condition, including fittings and fixtures.
Even if you have not paid a bond, it is still a good idea to get a ‘Condition Report’.
Consumer Affairs Victoria has a ‘Condition Report’ form to help you rate the condition of your new home.
The ‘Condition Report’ can be used as evidence if there is a dispute about who should pay for cleaning, damage, or replacement of missing items.
If possible, take photos of the premises before you move in to further show their condition.
Your landlord must provide you with two copies of the signed ‘Condition Report’ before you move in.
Review and, if necessary, add your comments to the ‘Condition Report’. Return the report to your landlord within three business days of moving in. All parties should keep their copy of the ‘Condition Report’ until the end of the tenancy.
Your landlord may claim some or all of the bond for cleaning, damage, or replacement of missing items at the end of your tenancy. If the ‘Condition Report’ stated that the work was required at the start of the tenancy, or the items were not listed, it can help you prove the bond should be returned to you.