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Landlords need to properly lodge bonds

Landlords are being encouraged to understand the rules for collecting and lodging bonds.

Tuesday, August 14th 2007, 12:00AM 10 Comments

by The Landlord

Department of Building and Housing (DBH) client services manager Jeff Montgomery says, “Bond money does not belong to the landlord and cannot be held in a private bank account. It is the tenant’s money held in trust by the government until the end of the tenancy or a circumstance that enables the landlord to claim the bond”.

Montgomery says some landlords do not realise the importance of bond until it’s too late.

“Every landlord I speak with reiterates how important it is to collect the full bond entitlement. If the tenant causes damage, the landlord might have to make a claim against the bond money for repairs and maintenance.”

Montgomery says there is sometimes confusion about how much bond a landlord can request from a tenant.
“Landlords can ask for up to the equivalent of four weeks’ rent as a bond. They are not required to ask for a bond, and they can ask for less.”
When landlords collect bond from a tenant, they must give the tenant a receipt and forward the payment to the DBH within 23 working days. Landlords must also enclose a bond lodgement form (available on the DBH website: www.dbh.govt) with the bond cheque.
“Some landlords are prepared to stagger their receipt of bond money from their tenants. This is fine provided they send the payment with a lodgement form to the Department of Building and Housing within 23 working days,” says Montgomery
In addition to collecting a bond, landlords may also collect one or two weeks’ rent payment in advance. This is completely separate from the bond money.
“If the rent is to be paid fortnightly, a landlord can ask for two weeks’ rent in advance. If the rent is to be paid weekly, a landlord can only ask for one week in advance.”
At the end of the tenancy, the tenant and landlord need to complete a bond refund form. The bond refund form is sent to the landlord after the bond is lodged. The form is also available on the DBH website.

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Comments from our readers

On 23 October 2009 at 4:44 pm amandeep said:
What happens if landlord is unable to lodge a bond within 23 working days.
Are there any penalties for late lodging?

On 8 June 2010 at 1:19 pm Ray said:
hi there, what are the penalties to a landlord (if any) for not lodging the bond with bond services?
On 6 August 2010 at 3:23 pm nathan said:
Hi I have just received a letter stating that my bond wasn't received by D.B.H until 43 days after I paid it to my landlord. Is there anything I can do regarding this???
On 7 August 2010 at 4:37 pm Darren said:
@ Nathan:
if the bond has been lodged (and the correct amount), what is the bother if it was a little late?
On 20 October 2010 at 7:49 pm john said:
(new landlord) Hi, I'm not clear about lodging the bond. Does the tenant write the cheque in favour of DBH, and then the landlord sends in that cheque with bond lodgement form? And then, does DBH actually present that cheque for payment as cleared funds into their trust account and what happens if the cheque bounces? Cheers, John
On 5 October 2011 at 1:09 pm Kelley said:
I paid a bond to my LL and rented the house for 3 years. At the end of tenancy i was not asked to sign a bond refund form and about 2-3 months later, only after calling to complain i had not received my bond back yet, did i receive a personal cheque from their bank account paying back less than half of my bond with a letter stating what they took money for... So did they not lodge my bond and what can to do about it?
On 28 October 2011 at 3:34 pm Chris said:
How much is it for the Landlord in fines if they do not place a bond till the last minute or not at all?
On 12 November 2011 at 11:18 am Euan said:
Please can you tell me if there is a penalty for not lodging a bond.
On 21 January 2012 at 10:28 am Matt at tenancy support said:
If bonds are not lodged properly, or in the due time, Landlords can be fined and also made to pay reparation to the tenant!!
On 5 March 2012 at 5:09 pm Victoria Nealon said:
Hi, I brought a rental property in 2009 and signed a change of landlord bond form and sent it off to tenancy services. My tenant has just moved out and informed me that Tenancy services have no record of a bond ever being lodged. Both the tenant and myself cannot get hold of the previous landlord. What can we do?
Commenting is closed



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China Construction Bank Special - 2.65 2.65 2.80
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HSBC Premier 4.49 2.25 2.35 2.65
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HSBC Special - 1.99 - -
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Kiwibank 3.40 3.20 3.50 3.50
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Kiwibank Special 3.40 2.35 2.65 2.65
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Nelson Building Society 4.95 3.20 3.24 -
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SBS Bank Special - 2.29 2.29 2.65
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The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
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Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.79 2.99 2.80

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