Recovering bond money
There have been significant changes to the process that renters go through to get their bond back. Renters do not have to wait for the rental provider, or agent, to prepare a claim form, and they do not need their agreement.
Renters can make their own claim directly to the RTBA.
It is anticipated that by 2025, renters will be able to lodge their bond contributions directly with the RTBA. This is an important step in automating bond recovery as much as possible and reducing the risk of bonds being scammed or defrauded.
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The RTBA accepts three types of claims, which are those made by the:
renter;
renter and rental provider (or their agent), jointly; or
rental provider or their agent (RT Act s 411(1)).
Renter claims
A renter can make a claim to the RTBA as soon as their rental agreement has finished and they have returned the keys (RT Act s 411(3)).
A renter can put in a claim for the bond to be:
paid to them;
paid to someone else, either partly or fully;
divided between them and the rental provider; or
paid to the rental provider (RT Act ss 411(1)(a), 411AE).
Joint claims
If a renter and the rental provider (or their agent) agree about how a bond should be repaid, they can lodge a joint claim to the RTBA (RT Act s 411(1)(c)). Joint claims can be made at any time, even before the rental agreement ends (s 411(3)). However, if it is agreed that part of the bond is to be paid to the rental provider, a claim cannot be made earlier than 14 days from when the rental agreement ends (s 411(4)). Note that it is an offence for a rental provider to ask a renter to sign a bond claim form that does not say how the bond is to be refunded (s 411(5)).
Rental provider or agent claims
The only claim a rental provider or agent can make to the RTBA without the renter is one that says all the bond is to be paid to the renter (RT Act s 411(1)(b)). They can make this sort of claim at any time, even before the rental agreement ends (s 411(3)). However, if the rental provider wants any of the renter’s bond, and the renter does not agree with them, the rental provider will need to apply to VCAT.
After a claim is made
After a bond claim is made, the RTBA will give written notice of the claim to anyone else on the rental agreement who has not been included in the claim (RT Act s 411A).
If the rental provider, or anyone else, wants to stop the RTBA from paying the bond to the renter, they need to apply to VCAT. They need to give the RTBA proof that a VCAT application has been made. This must be done within 14 days of getting the RTBA’s notice that the renter has made a bond claim (RT Act ss 411A(3)(c), 411AD(1)).
If the RTBA is not notified of a VCAT application regarding the bond by the rental provider or another co-renter within the 14 days of the RTBA’s claim notification being deemed to be received, or if everyone consents to the bond being paid according to a joint claim, the RTBA will pay the bond as directed in the bond claim (RT Act s 411AC).
If a VCAT application is made within 14 days of the rental agreement ending, the renter needs to wait for VCAT to decide how the bond is to be paid (RT Act s 411AD).
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Renter claims
If the Department of Housing paid the bond, the renter can make a claim to the RTBA for the bond to be repaid to the Department of Housing (RT Act s 421). If the renter does not include the Department of Housing in their claim, the RTBA will notify the department of the renter’s bond claim (s 411A).
Rental provider claims
If some of the bond is to be paid to the rental provider without the renter’s consent, the rental provider must obtain a VCAT order for this to occur. If the rental provider gets a VCAT order that entitles them to any or all of the bond, and it was paid by the Department of Housing, the renter may still need to repay the bond loan to the Department of Housing. If the renter has an unpaid debt to the Department of Housing, this will not affect any future applications they make for public housing. However, the renter may be asked to enter into an agreement to repay the debt.
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Renter applications to the Victorian Civil and Administrative Tribunal
Renters do not need to apply to VCAT to ask for their bond back because they can now make a claim for their bond directly to the RTBA. However, if the renter thinks the rental provider or other interested party (e.g. another renter) will dispute their bond claim, they can apply to VCAT.
Renters can apply to VCAT by completing the general application form and citing section 419A of the RT Act. If a renter wants to apply to VCAT, they have 14 days to apply from the time the rental agreement ends (RT Act s 419A(2)). In exceptional circumstances, this time limit may be extended with VCAT’s permission (VCAT Act s 126). There is no time limit on when a renter can apply to the RTBA. It is free to submit a bond application to VCAT.
Rental provider’s application to the Victorian Civil and Administrative Tribunal
If a rental provider wants to retain some or all of the bond, and the renter disputes the rental provider’s entitlement to do so, the rental provider must make a claim to VCAT against the bond (RT Act s 419A). A rental provider cannot make a claim directly to the RTBA if they want any of the renter’s bond (s 411(1)(b)). A claim to VCAT must be made within 14 days of the renter vacating the rental premises (s 419A(2)). If 14 days have passed, the rental provider may still make a general compensation claim against the renter; however, they cannot rely on the security of the bond to ensure payment of any claim.
If a rental provider makes an application against the bond out of time, the renter should point this out to VCAT. However, the renter should be prepared for the possibility that VCAT may grant the rental provider an extension of time (under section 126 of the VCAT Act) and allow the rental provider to argue their case. It is currently unclear if VCAT will reject applications by rental providers that are made 14 days after the rental agreement ends, as intended by the law. Notably, it is a requirement that rental providers indicate the date that the rental agreement ended on their bond application (VCAT Rules r 8.08(8)). This means that VCAT should be able to determine the validity of an application where no extension of time has been sought. If the VCAT application is rejected, the RTBA should refund the renter’s bond money as requested; the rental provider will need to make a compensation claim against the renter instead. Whether this operates as intended is yet to be observed.
The things a rental provider may claim against a bond are:
the reasonable cost of cleaning, if the renter has not left the property reasonably clean; however, a rental provider cannot require a renter to leave the property cleaner than when it was when the renter moved in;
the reasonable cost of repairs, if the renter, or their visitor, has caused damage; this does not include the usual wear and tear from living in the property;
rent, or other charges that are the renter’s responsibility, that they owe; and
replacing locks if the renter has altered, removed or installed locks any without consent (RT Act s 411AB).
It is important that renters realise that the bond is their money. For a rental provider to be entitled to any bond money, they must prove on the balance of probabilities that:
the renter has caused loss or damage in breach of the RT Act or the valid terms of the rental agreement; and
the amount claimed is reasonable.
A renter is not liable for damage that was pre-existing, or that was caused by a third party (not a visitor) (e.g. a break-in or flooding in a neighbouring apartment), provided these were reported in writing, as soon as practicable, at the time (RT Act ss 62, 72AA). A renter is not liable for any damage that is fair wear and tear (e.g. worn carpet) or other damage caused by the ordinary use of the premises. If a renter is liable for any item, it should be appropriately depreciated according to the age of the item (see s 211A(2); reg 90; Director’s Guidelines 2 (Cleanliness), 3 (Damage and fair wear and tear)). Rental providers or agents are expected to provide a complete and evidenced application to enable the renter to respond appropriately. The new summary of proofs for bond and compensation form (available from the VCAT website) is also beneficial to renters because it highlights the requirement of the rental provider to disclose the age and condition of each item alleged to have been damaged, and how the renter is at fault for each item. Requesting the rental provider to complete this form may assist in the early resolutions of bond disputes.
A rental provider has a duty to mitigate loss or damage. A rental provider may apply for compensation that is more than the amount of the bond. VCAT may also give consideration to a range of other factors set out in the RT Act (ss 211–211A).
VCAT may hear applications for bond and compensation at the same time. Renters may also wish to lodge their own compensation claim (RT Act ss 210, 452) to offset any potential liability, or for the purposes of reaching a mutual agreement.
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If a renter has applied for a rental agreement termination or creation under section 91V of the RT Act, they should seek orders about the bond at the same hearing (RT Act s 91X(1)).
If a rental agreement has ended another way, a renter who has experienced personal or family violence can rely on other provisions in the RT Act to help protect their bond (including a Department of Housing bond loan). VCAT can make orders that protect a victim-survivor’s bond if the loss – including rent arrears, or damage the rental provider has made a claim for – was caused by a perpetrator of family or personal violence (RT Act ss 420A, 420B). The protections differ depending on whether the perpetrator of the violence is on the rental agreement (ss 420A, 420B).
In section 420A it is not always necessary for the victim-survivor to have an intervention order in place for VCAT to make these orders. In relation to section 420B, where the loss or damage has been caused by a person not on the rental agreement, a current intervention order is required at the time of the application. Currently, there is limited guidance on how, and in what circumstance, rent arrears or other liabilities will be apportioned, and how this may relate when a rental provider makes a bond and compensation claim
Due to the potential limitations of section 420A of the RT Act – it appears this section may only protect a portion of a bond and not a compensation amount in addition to the bond – it is strongly recommended that applications are made under section 91X of the RT Act where possible.
For further assistance, see Tenants Victoria’s family violence protection tenancy kit (available at www.tenantsvic.org.au/advice/during-your-tenancy/family-violence).
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If a renter has paid a bond and the rental provider or real estate agent has not lodged the bond with the RTBA (this breaches section 406 of the RT Act), and is refusing to return all or part of the bond to the renter at the end of the rental agreement, the renter may apply to VCAT to recover their bond. An application should be made under section 452 of the RT Act. The rental provider’s failure to lodge the bond should be reported to CAV for investigation and possible prosecution. Renters may request that the fee be waived or include a claim for their application fee to be refunded by the rental provider (s 115B).
All matters relating to the non-lodgement of bonds should be referred to CAV as this is a serious offence.
Recovering bond money
Chapter: 6.1: Tenancy
Contributor: Ben Cording, Lawyer, Tenants Victoria
Current as of: 1 September 2024
Law Handbook Page: 461
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