Deposits and guarantees are different to bonds. For more information about bonds, view Lodging the bond.
A landlord or agent may ask a tenant for a holding deposit before a lease is signed, and refund it once both parties sign the lease.
If there is no tenancy agreement within 14 days, the money must be refunded by the next business day.
A landlord cannot charge for:
- showing the prospective tenant a premises
- issuing a rent payment card
- establishing or using direct debit facilities
- making, continuing or renewing a lease (this may also be referred to as a premium, bonus, commission or key money).
A landlord or agent can be fined for attempting to charge for any of these services.
It is also illegal for a landlord or agent to charge any sort of ‘administration fee’ or ‘late fee’ to process rent payments. This is the case even if rent is late or in arrears.
A guarantee is an agreement where someone other than the tenant agrees to pay the landlord, owner or agent for any losses caused if the tenant breaches any part of their agreement or the Residential Tenancies Act 1997.
Generally, a landlord or agent cannot ask for a guarantee as well as a bond. They can do this only when the:
- rent is more than $350 a week, or
- tenancy agreement states that the tenant is renting the landlord’s principal residence and the landlord will resume living there at the end of the tenancy.
A guarantee cannot be more than the equivalent of one month’s rent unless the above points apply.
In any other case, a landlord or agent can be fined if they ask for a guarantee as well as a bond.