Real estate bulletin issue 80 - Residential tenancy security bonds and the Bond Administrator (February 2015)
5 February 2015
Key points to remember
- For security bonds held in a financial institution in relation to residential tenancy agreements which commenced prior to 1 July 2013, Consumer Protection urges agents to ensure these security bonds are immediately lodged with the Bond Administrator.
- Make sure you use the Bond Administrator's current forms, available online or through your agency’s online portal.
- From 1 April 2015 the submission of any outdated and unapproved forms to the Bond Administrator will not be accepted.
- A new system is being developed to allow agents to transact with the Bond Administrator electronically online.
As the Residential Tenancies Act 1987 (the RT Act) now requires all security bonds received by a person in relation to a residential tenancy agreement to be lodged with the Bond Administrator, Consumer Protection urges agents to ensure that any security bonds held in tenancy bond trust accounts are immediately lodged with the Bond Administrator.
If the security bond relates to a terminated tenancy agreement where the tenant/s cannot be located, the security bond can be transferred to the Bond Administrator as unclaimed bond money under the RT Act by providing payment of the security bond, the names of the tenant/s and lessor/s, address of the rental property as well as the dates the tenancy commenced and ceased (the Details of the Tenancy).
A copy of any lodgement, disposal or tenancy agreement documents that may have been completed during the tenancy would also be of assistance to the Bond Administrator.
Please be aware that as unclaimed security bonds are within the jurisdiction of the Bond Administrator under the RT Act, any unclaimed bonds yet to be actioned by agents should not be lodged with the Department of Treasury as unclaimed monies.
In the case of joint tenancy bond accounts between a lessor and the tenant where the tenant cannot be located, the lessor will need to make an application to the Magistrates Court for an order permitting the release of the security bond to the Bond Administrator. Once again, the details of the tenancy will be required for lodgement made to the Bond Administrator.
If the Details of the Tenancy cannot be provided, the Bond Administrator cannot accept the lodgement of the security bond and the agent will need to seek legal advice on what options are available to them in such circumstances.
Consumer Protection calls on agents and property managers to make sure that they are using the current versions of the security bond forms as a number of lessors and agents are continuing to complete forms which are not in the approved format and have long since been superseded. The recent delays in processing bond transactions, particularly bond disposals, can be partly attributed to the ongoing use of these old style forms, which are not compatible with our systems.
The RT Act provides that from 1 July 2013, a person who receives a security bond in relation to a residential tenancy agreement is required to pay the security bond to the Bond Administrator as soon as possible and in any event within 14 days of receiving it.
As required by the RT Act, the Lodgement of Security Bond Money form, the Variation of Security Bond form and the Joint Application for Disposal of Security Bond form must be made only by using the forms approved by the Minister for Commerce.
Information on how to lodge, dispose or vary a security bond can be viewed on the Department’s website. Current forms can be completed online or through your agency’s Bonds Online Portal. If your agency would like access to the Portal, a request can be sent by email.
Using the current approved security bond forms will ensure the Bond Administrator can process the request in a timely manner.
From 1 April 2015 any outdated forms received by the Bond Administrator will not be accepted and will be returned, along with any payment, to the lessor or agent with notice that the correct form must be used. As a result, a security bond may not be lodged within the required timeframe resulting in a potential breach of the RT Act. Tenants enquiring about the status of their security bond will be directed to contact their lessor or agent for an explanation as to why it has not been lodged or a disposal has not been actioned.
This financial year, Consumer Protection envisages implementing an eTransactions system where agents will be able to perform the majority of bond administration transactions and communications online. Consumer Protection has liaised with REIWA to seek its members’ assistance in testing the system, with the group’s first presentation of the system happening last month. Non-REIWA member agents, sales representatives and property managers who wish to be a part of Consumer Protection’s test group are encouraged to express their interest by email.
Please be aware the information in this bulletin only relates to security bonds taken with respect to a residential tenancy agreement. A security bond held with respect of boarder, lodger or commercial tenancy agreements should not be paid to the Bond Administrator.
Further information on residential tenancy security bonds can be found on the Department’s website. If you have any queries about the process required to lodge a residential tenancy security bond, please contact the bond administration branch on 1300 853 829 or by email.