Life cycle of a bond

16 Mar 2020

In this episode we take a look at rental bonds and the process around lodgement, refunds, disputes, increases and how the RTA supports tenants and property owners and managers throughout the life cycle of a bond. Our RTA expert in this episode is Matt Sturgess, Manager, Customer Experience.


Host: Belinda Heit – Communication and Education – RTA
Guest: Matt Sturgess – Manager – Customer Experience – RTA

Host: Welcome to the Talking Tenancies podcast. Brought to you by the Residential Tenancies Authority, I'm your host Belinda Heit. Join me as we explore everything you need to know about renting in Queensland with experts from the RTA and industry. We're here to help make renting work for everyone.

In this episode we take a look at rental bonds and the process around lodgement refunds, disputes, increases, and how the RTA supports tenants and property owners and managers throughout the life cycle of a bond. Today's expert from the RTA is Matt Sturgess, Manager for Customer Experience. Welcome Matt.

Guest: Thank you for having me.

Host: Now, can you tell us about your role at the RTA and what you're responsible for?

Guest: Absolutely, so I'm a Customer Experience Manager. As you just stated. I look after the bond management processes and our support team.

Host: Excellent. First of all, I've got to ask you for those people who don't know, what is a bond?

Guest: So, a rental bond is the amount of money you pay as a security deposit that's lodged with the RTA. It's a safeguard for managing parties and the landlord to mitigate or cover the costs of any outstanding damages or any outstanding payments owed at the end of the tenancy. As long as you don't have any outstanding monies owed to the landlord or managing party, it's 100% refundable at the end of your tenancy.

Host: With that, it's kind of a similar concept to going into a hotel isn't it? You know, you pay a security deposit.

Guest: Yeah, so just like when you go to a hotel, most of them these days will ask you to pay an amount just to cover your stay as a security deposit. Providing there's no damages to the room and you haven't raided the mini bar, it's fully refundable.

Host: Yeah, so how much bond can be taken for a general tenancy?

Guest: So, for a general tenancy, if the weekly rent is $700.00 or less, the maximum amount of bond you can charge is four weeks' worth of rent if it's over $700.00 of there's no maximum limit of the bond, but you should discuss the amount of bond with the other party and make sure that all parties agree.

Most of the time, managing parties charge that maximum of four weeks, unless the weekly rent for the rental property is very high, then it could be a whole different situation. When you're looking at caravan parks and rooming accommodation, there are slightly different rules, so if you're unsure about what that is, I'd encourage you to go to the RTA's website where there's more information.

Host: So, can a property manager or owner ask for a bond for any other means other than the security deposit on the property?

Guest: It's not compulsory that a managing party takes a rental bond. However, if a bond is taken, then there are legal obligations around it which you must satisfy. The full bond amount is required to be lodged with the RTA and it cannot be kept by the managing party for other purposes during the tenancy. Most of the time, managing parties charge a maximum of four weeks rent.

Host: OK, and with that full amount being lodged to the RTA from a managing party, they've got to do that within 10 days, right?

Guest: Yes, that's correct. The quickest way to lodge that at this point in time is through the RTA’s new web services. The digital lodgement form is easy to be filled out by a managing party or a tenant.

If you're a real estate and you receive lots of these that you normally have to process at the end of each week, a way to save a bit of time is actually to encourage the tenants to pay it straight to the RTA themselves through the web services. Just make sure that they have your details so that they can make sure they provide it to the correct managing party.

Host: Yeah, taking all the work away from the managing parties.

Guest: That's it, it's less admin and reduces double handling. At the moment the tenants have to pay it to the agencies who have the receipt and make sure it's recorded against that customer record and then they need to pass it on to us.

Host: Yeah, so just a much, much faster process.

Guest: Absolutely.




Host: We've been, you know, running our web services for a little while now. Can you tell us on how well that's going?

Guest: So, it's going really well at the moment. What we're seeing initially is that on average for the lodgement side of things, it's taking less than 5 minutes for someone to complete the form and submit that to us.

Host: Wow, that's a huge time saver. All the discussions I'm having today are the wins we're having with the web services, so that's great. So, once a bond is lodged and the tenancy is in motion over time there can be rent increases. What happens then?

Guest: So, in Queensland there are rules around how frequently a rent increase can occur. Notice of the rent increase must be provided in advance and in writing, so the tenant is informed, a rent increase does not necessarily mean that your bond will increase. However, if the bond amount has increased, the tenant will have to increase their bond that has been lodged with the RTA. Again, this can be done through the RTA's Web Services. Tenants can use the bond increase option through that to make sure that the money tracks straight onto their rental bond.

Host: Excellent, oh, that just makes it so much easier. So is a part of a bond refund required if the rent decreases during the tenancy.

Guest: A rent decrease will not necessarily decrease your bond. However, the maximum amount that can be held with the RTA if it's below $700.00 a week is four times the weekly rent. So if the rent decrease means that more than four times the weekly rent is being held, then yes, a decrease and bond refund will be required.

Host: Right, so can they then do a part refund as well through web services?

Guest: Absolutely. Full refunds or partial refunds due to a rent decrease can be submitted through the RTA’s Web Services.

Host: Excellent. So, at the end of a tenancy or when a tenant is leaving a property. What are the ways they can request a refund of their bonds?

Guest: Obviously, they can do that through web services and similarly with the lodgement, the quickest way to get that information to us is through that digital channel.

When you log into the web services and provide your rental bond number, it makes sure it matches to what we have in the system, so that we know we are refunding the correct bond. This has replaced the old method of having to complete a form, print it, have all parties sign it, scan it back in, save it, upload it through the website and then for it to come in the queue for us to process.

Host: Wow, that's life changing. So, there's also a fast track through this as well, so if everyone agrees on the refund happening, this makes things a whole lot quicker right?

Guest: Absolutely, so before the any of the legislative processes kick-in, parties have an opportunity to agree to the fast track prior to that happening. Providing all parties agree, if there is agreement, then in some instances, money is paid out on the same day.

Host: Yeah, that's amazing. So, on average, how long does it take to receive a bond refund once it's requested? You mentioned 5 minutes before, or in the same day, this has changed, hasn’t it?

Guest: This has changed. I mean, generally we've been able to process agreed bond refunds within 24 hours of the RTA receiving that request. As I mentioned beforehand, in cases where all parties agree through that fast track through the digital web services, we have been able to pay out bonds on the same day that the request has been made.

Obviously when we make a payment, there are potential delays outside of our control with individual bank and their processing times, but generally, we try to turn around those agreed ones within that 48-hour window. If it's not agreed, there is obviously a legislative process that the RTA must follow to allow people an opportunity to dispute.

Host: What if there is a dispute in the bond refund between tenants or tenants and the property manager/owner?

Guest: So roughly, about 50% of the disputes that come through to the RTA are about bond disputes, where parties in the tenancy are in dispute over how the bond is to be refunded, and they're unable to reach a mutual agreement.

Through web services and the refund process we do encourage parties to talk to one another before submitting that to make sure there are no surprises. If parties have spoken to one another and still cannot find that mutually agreeable outcome, it comes to our team of conciliators who will make contact, do an assessment of your dispute, and look to find the best way to resolve the matter, whether it's talking to parties individually or bringing them together to facilitate a conversation.

We find when parties are willing to go through the process, we're able to get a successful outcome on about 70% of those disputes.

Host: That's a pretty good success rate there.

Guest: Absolutely, it's a trusted process where if parties are open to talking to one another, we're generally able to help them find an agreeable outcome.

Host: And that's a bit of a theme I'm picking up and talking to everyone on this podcast, is a successful tenancy is all about open communication.

Guest: Absolutely. As I said before, no surprises is always the best way to approach things. Speaking to one another, if there are issues that pop up, discussing it early and agreeing how to overcome it at that point, rather than when it's too late.

Host: Yeah, so when all parties can't agree on the refund, what happens from there?

Guest: So, when we can't reach an agreement, I suppose the first thing we're looking forward to see if there is any undisputed amounts that we can return back to the tenants at the earliest possibility. Often the case if the managing party or landlord isn't looking for the full bond amount. At times we are able to release funds back to the tenants, even if there's not an agreement. Uh, when there's not an agreement completely, though. The next step is for whoever lodged the dispute. To take it to the Queensland Civil and Administrative Tribunal (QCAT) and actually get a decision on how that bond should be paid.

Host: Yeah, and the timing for that process varies obviously depending on how many parties are involved and who's available, who's contributing, all those kind of things, isn't it?

Guest: Yeah, there's lots of variables that can depend how long that can take, and even regional offices and different QCAT's can have different wait times. We like to try and help parties avoid that by coming to that agreement prior to that happening.

Host: Well, it sounds like we've made bonds a lot easier to manage here at the RTA. And thank you for joining us Matt and telling us all about how they work.

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Original publication on 16 Mar 2020
Last updated on 21 Feb 2023

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