In New Zealand, navigating the realm of rental bonds can be a crucial part of the tenancy process. Understanding what constitutes a reasonable bond deposit is vital for both landlords and tenants.
The Basics of Bond Deposits:
When it comes to setting a bond, there’s a clear guideline: the bond can be up to the equivalent of 4 weeks’ rent. This upper limit is mandated to ensure fairness in the rental market. It's important to note that other forms of security aren’t allowed under New Zealand tenancy laws. However, landlords have the option to request a guarantor’s agreement as an additional safeguard.
Lodging the Bond:
Once a bond is decided upon and paid by the tenant, landlords have a legal obligation to lodge it with Tenancy Services within 23 working days. This process is mandatory whether the bond is paid in full or in instalments. Additionally, landlords must provide a receipt to the tenant, ensuring transparency and accountability in the bond transaction.
Adjusting the Bond with Rent Changes:
The bond amount isn’t set in stone for the duration of the tenancy. If there’s a rent increase, landlords may ask tenants to top up the bond accordingly. For example, if the weekly rent goes up by $10 and the tenant has already paid a bond equivalent to 3 weeks’ rent, the landlord can request an additional $30 for the bond. This adjustment is only applicable for current rent increases and can’t be retroactively applied to past rent hikes.
Decreases in Rent:
In the event of a rent decrease, and if the total bond becomes more than 4 weeks’ rent, tenants have the right to request a refund of the excess amount. This ensures that the bond remains proportionate to the current rent.
Determining a reasonable bond deposit in New Zealand requires adherence to legal limits, understanding of potential rent adjustments, and compliance with lodging requirements. For both landlords and tenants, knowing these guidelines can help navigate the bond process smoothly, ensuring a fair and secure tenancy arrangement.
Knowing what the market's rental rate for your property may assist you in determining a reasonable bond deposit. Gain insight into your property's potential rental income with a free rental appraisal, specially created for landlords.
