Residential Tenancy Bond (NT)
A tenant invariably needs to pay a bond or security deposit when renting a residential property. A residential tenancy bond provides financial protection for the landlord in the event that the tenant breaches the tenancy agreement or damages the property. In the Northern Territory, bonds are regulated by the Residential Tenancies Act 1999. This article looks at residential tenancy bonds in the Northern Territory.
Residential Tenancy Bond in the Northern Territory
A tenant in the Northern Territory usually needs to pay a security deposit or bond when they sign a lease. This money is held for the entire length of time that the tenant remains in residence. When there is more than one tenant, the tenancy agreement must specify the amount that each tenant contributes to the bond. Otherwise, it is assumed that there is an equal contribution from each tenant.
In the Northern Territory, a bond cannot exceed the equivalent of four weeks’ rent. For instance, if a tenant pays $400 a week in rent, their bond cannot be more than $1,600. A landlord can increase a bond during a tenancy after two years if there is a valid rent increase and the landlord provides written notice. Importantly, a landlord in the Northern Territory cannot ask for more than four weeks’ rent for any reason. This differs from other jurisdictions in Australia, where a tenant might have to pay a pet bond or have to negotiate their bond with their landlord for higher-end property.
A tenant who cannot afford to pay a bond can ask the Department of Housing about Bond assistance, which is an interest-free loan. In some circumstances, a landlord might be willing to let a tenant pay a bond in instalments. However, if the landlord and tenant make this arrangement, it needs to be written up as a formal signed agreement.
Receipt for Residential Tenancy Bond in the Northern Territory
Money for a bond is handed over to the landlord (or their representative, such as a property manager), but the landlord cannot spend this money without authorisation. The landlord must deposit these funds in a bank in the Northern Territory. When a tenant pays a bond by cheque, cash or credit card, the landlord must give the tenant a receipt. This receipt needs to be signed by the landlord or agent and show the date received, the name of the tenant who paid the deposit, the amount, and the address of the rental property. There is no requirement for a receipt when a security deposit is paid via electronic bank transfer.
A bond paid to a real estate agent must be placed in a specially designated bank “trust” account. A private landlord also holds a security deposit in trust, and the tenant can request the name of the bank and the account number. A private landlord who is away from the Northern Territory for more than 14 days must notify the tenant and transfer the bond to a real estate agent or other person approved by the Commissioner of Tenancies.
Avoiding Problems with a Residential Tenancies Bond
In the Northern Territory, a tenant can take steps to ensure the return of their entire bond. When the tenant receives their condition report at the start of the lease, they should check that the report accurately reflects the state of the property. It is important to note any faults, damage or repairs on the report and return it to the property manager within five days. The tenant should also take photographs of faults that may be disputed later. A report is accepted if the landlord initials the changes within five days or does not return the report at all.
Perhaps the most important step is for the tenant to proactively look after the rental property and ensure that they leave it in the same condition apart from fair wear and tear. Fair wear and tear is usually defined as deterioration due to normal use and age. For example, fading on curtains due to sun exposure is normal, but a pot burn on a laminate counter is considered an avoidable accident. In the Northern Territory, there is also an exception for bond refunds if the damage is caused through domestic violence. In this situation, a tenant is not responsible for damage if they are the victim. The tenant will need evidence of the domestic violence, such as a police report of the incident.
Getting Back a Residential Tenancy Bond in the Northern Territory
At the end of a tenancy, the property manager carries out a final inspection of the property. When there are no condition or repair issues, the bond should be returned to the tenant within seven business days of the tenant moving out. If a landlord intends to withhold a bond for damage, cleaning or unpaid rent, they must advise the tenant within seven business days. This notification must include copies of quotes or receipts for costs the landlord plans to withhold from the bond.
A landlord can only keep a bond if the tenant accepts the outgoing condition report and returns their keys to the property. If a tenant does not agree with these costs, they should try to negotiate with the landlord and then contact Consumer Affairs or a solicitor for further advice. There is also the option to apply to the Northern Territory Civil and Administrative Tribunal for the return of all or part of a bond.
Contact Go To Court Lawyers on 1300 636 846 if you need further legal advice on residential tenancy bonds in the Northern Territory or legal assistance on any tenancy or landlord issue.