Renting in the Top End: Key Security Deposit Facts for Tenants and Landlords
If you are about to move into a new rental property or renting out your property for the first time, you may have a few questions about security deposits. Here is a summary of the key rights and responsibilities of tenants and landlords here in the Northern Territory.
What is a Security Deposit?
A security deposit or rental bond is a sum of money a tenant pays before moving into a rental property. The landlord or property manager pays the bond or security deposit back to the tenant after they vacate the property, so long as the tenant:
- Owes no rent on the property.
- Has not caused any damages to the property.
- Has not incurred any other costs to the landlord due to their action or inaction.
Where Does the Security Deposit Go?
The landlord holds the security deposit in trust. Often a third party, like the managing real estate agent/company, or another party approved by the Commissioner of Tenancies, will hold the security deposit. The bond must be held in a bank or financial institution in the NT.
If the landlord is to leave the NT for more than 14 days, the security deposit must be held by a real estate agent residing in the Northern Territory.
As a landlord, hiring a professional like Darwin Rental Specialists to take care of your rental investment ensures all requirements are met on your behalf.
Understand the Payment Methods and Receipts
In most cases, the security deposit is equal to four weeks rent. Both parties can negotiate it for a lesser amount, but this is uncommon. Landlords must give you a receipt immediately if you pay your bond by cash, credit card or cheque.
If you pay the amount by any other means, like direct deposit, for example, the landlord must provide a receipt upon request. The receipt for the security deposit should have the:
- Signature of the person who received the monies.
- Amount of security deposit.
- Date the tenant sent the monies.
- Name of the tenant or tenants.
- Address of the rental property.
If there is more than one tenant on the lease, the Tenancy Agreement may detail how much each tenant paid on the rental bond. If the Tenancy Agreement does not specify the amount each tenant pays, it is taken that each tenant has paid an equal amount of the bond.
Security Deposit Refund Insights
As a tenant, you should check the report and add any missing details, such as damages or faults and any necessary repairs. Tenants must return the report within five days of receiving it. Tenants and landlords should also take photos of any damages or faults to the property.
It is in the best interest of tenants and landlords to take the time to fill out the property report at the start of the tenancy. Take photos of any damage to the property at the start of the tenancy. Taking these precautions will aid in any disputes at the end of the tenancy. The goal is to protect the interests of both parties, so no one loses money in the process.
The bond is held for the time the tenant occupies the property. The landlord must return it to the tenant within seven business days after they leave the property. The landlord may dispute the returning of the bond for many reasons, like:
- Unpaid rent
- Unpaid utility bills, like electricity and gas
The agent or landlord must give notice within seven business days if they intend to dispute the return of the security deposit. The notice must include the reason they are withholding the bond, as well as quotes or receipts proving the costs the landlord incurs.
For example, if there is damage to the carpet, the landlord may withhold the cost of the repair of the carpet. However, a quote for the cost to repair the damage must be in the notice as proof.
How to Avoid Problems
There are a few things a tenant should do to avoid problems when applying to have their bond returned. Within three days of moving into the property, the agent or landlord should supply the tenant with a report on the condition of the property. This report is to check for damage incurred during the tenancy.