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Not just a super spy: Understanding a bond

By Kevin Kelly

Managing an investment property in Bunbury can be a full time job. If you're a first-time landlord, the boatload of processes from tenancy agreements to collecting rent can feel overwhelming.

Owners of real estate in Bunbury often choose to invest in the assistance of a property manager for all or some of the rental process. But if you're looking to go it alone, you'll need to understand some of the basics.

Let's start with the basics on bond – security bond.

What is a bond?

A security bond is an advanced payment made by tenants to cover any outstanding costs to the landlord at the end of the rental term.

There's no minimum bond amount required by law, but you aren't able to set bond to any amount higher than what would be equivalent to four weeks worth of rent. However, if rent is charged higher than $1,200 a week, no limits apply.

According to Western Australian law, once a bond is paid by the tenant the lessor must give a receipt immediately. The receipt should confirm the name or names of those who paid, the amount, the date of transaction, and the address of the rental property.

How do I lodge bond for my Bunbury rentals?

To ensure bond is held for the express purpose of covering unexpected expenses, the money must be passed to the Bond Administrator as soon as possible. Ensure that you've lodged bond within 14 days following the receipt of payment.

To do this, you must file a bond lodgement form available from the WA Department of Commerce. The form must be completed and signed, and can be submitted online, via the post, or in person.

Can the bond amount be changed mid-term?

Of course. In certain circumstances you may need to alter the amount of bond. For example, if you've increased rent on your property you may need to raise the bond to reflect this.

If you decrease rent during the term, your tenant could ask for a partial refund of the bond. You are not legally obliged to provide this, though it does always pay to be considerate of your tenant's wishes.

Can I charge extra bond if my tenant has pets?

You can! A pet bond up to $260 may be charged in addition to the security amount, unless the pet in question is an assistance dog.

The ins and outs of tenancy law are full of "ifs" and "buts". Fortunately, at Ray White Bunbury we have a team of dedicated and experienced property managers ready to help you turn those conjunctions into currency. Get in touch today to organise a free, no obligation rental appraisal of your investment property.

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