Bond top-ups explained
With Western Australia (along with the rest of the country) in the midst of a rental shortage and vacancy rates dropping to their lowest levels in more than a decade, many tenants have faced rental increases. These increases not only come with an increase to the weekly rental amount, but also an increase to the bond.
Tenants are reminded that the Bond Administrator holds on behalf of them, a bond amount, which is equal to 4 weeks rent. Once a tenant has been issued with an official notice of a rent increase, a ‘bond top-up’ will be required and this depends on how much the weekly rent has increased by.
For example, if the weekly rental amount was $400 per week and it is now $410 per week a bond top-up of $40 is required. Once paid by the tenant, these funds are sent to the Bond Administrator and added to the current bond held on their behalf. A ‘bond top-up’ is not to be paid before the rental increase has come into effect and can be paid by instalments if the tenant desires.
Once the ‘bond top-up’ has been receipted and then forwarded to the Bond Administrator the tenant should receive notification from them that a variation to the bond has occurred.
From an owner’s perspective, a bond is a payment made at the start of the tenancy to cover any costs for which the tenant may be liable upon vacating the property, such as damage to the property or chattels, outstanding water usage charges or unpaid rent.
In some instances, there have been reduced insurance payouts on rental default claims due to the incorrect amount of bond being held. This shows the importance of ‘bond top ups’ and why it is imperative that the amount held is reflective of 4 weeks rent.
We have included an article below from the Department of Commerce in reference to bond top-ups and also an article from Public Service News for further information.
Public Service News – Renters Reminder of Bond Top Ups
If you have any questions in regard to bond top-ups or any other leasing query, please feel free to contact anyone from the Celsius Property Management team and we will be more than happy to assist.
Warm regards,
Celsius Property Management Team