A guarantee is an agreement where someone other than the renter (tenant) agrees to pay the rental provider (landlord), caravan park owner or rooming house operator for any losses or damage.
Guarantees are similar to bonds, except that the renter does not pay them, and they are not held by the Residential Tenancies Bond Authority.
A guarantee cannot be more than the equivalent of one month’s rent unless the rent is more than $900 a week.
A rental provider or agent can only ask for a guarantee as well as a bond if the rent is more than $900 a week. In any other case, a rental provider or agent can be fined if they ask for a guarantee as well as a bond.
Renters should be aware that bond replacement products are illegal in Victoria.
Sections of the Act
If you want to know what the law says about guarantees, you can read these sections of the Residential Tenancies Act 1997:
- Section 37 – Certain guarantees prohibited
- Section 38 – Maximum amounts of certain guarantees