The bond 

What is a bond?

A bond is money which acts as security for any unpaid rent or damage to the property (that is the tenant's fault). A landlord can ask for an amount anywhere up to four weeks rent as bond. The bond is not held by the landlord, but by the Tenancy Services section of the Ministry of Business, Innovation and Employment (MBIE).  

The bond is refunded to the tenant at the end of the tenancy, as long as the rental property has been looked after and the rent has been paid in full.

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What happens to the bond at the beginning of the tenancy?

The tenant can either pay the bond to the landlord, who must then give the tenant a receipt and lodge the bond with the Ministry of Business, Innovation and Employment's Tenancy Services within 23 working days of receiving it, or pay it directly to Tenancy Services (with the landlord’s agreement).

Both the landlord and the tenant need to sign a bond lodgement form. You can do this online or by filling in a paper form and sending it, along with a cheque, to Tenancy Services.

Once Tenancy Services has processed the bond they will send an acknowledgement to both parties. It’s a good idea to keep this acknowledgement, so that you can get your bond back more easily.

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What happens if the landlord doesn’t lodge the bond?

If the bond money is paid to the landlord, the landlord must lodge the bond with Tenancy Services within 23 working days of receiving it.

If the landlord does not do so, they could be fined for breaching their obligations under the Residential Tenancies Act.

If you have not received an acknowledgment of the bond from Tenancy Services within a reasonable period of time after you paid it to your landlord you can call Tenancy Services  on 0800 737 666 to check. They can also advise you of your options if the bond has not been lodged. 

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If my landlord increases my rent, can they also ask for extra bond money?

This is not something that landlords necessarily do, however as long as the rent increase was lawful your landlord can ask for a “top-up” of bond money up to the equivalent of four weeks' rent. More about this is on the Tenancy website.

For example, let’s say that your rent was originally $400 per week and you paid a bond worth four weeks’ rent when you first moved in. If your rent is increased twelve months later to $450 per week, then your landlord is entitled to ask for a further $200 bond. This would bring the total amount of bond money you have paid for your tenancy to $1800, which equals four weeks’ rent at the new rent amount.  

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My tenancy agreement has a clause that states there will be an automatic $300 deduction from the bond for cleaning at the end of the tenancy. Is this legal?

A clause in a tenancy agreement which requires professional cleaning at the end of the tenancy, or which automatically deducts money from the bond at the end of the tenancy, is unenforceable. This means that even if you sign the tenancy agreement, your landlord is not entitled to require professional cleaning nor make a deduction from the bond to pay for it.

At the end of your tenancy, you are expected to leave the property in the state it was in when you first occupied it. You also have to leave it reasonably clean and tidy and it is only if you fail to do this that the landlord can deduct bond money for cleaning.

The landlord can’t deduct bond money over normal wear and tear to the rental property.

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What happens to a tenant’s bond at the end of the tenancy?

The bond will be paid back to the tenant if there is no damage to the property, it is left reasonably clean and tidy and the rent is up to date. The landlord can claim for things like damage done to the property, cleaning not done, rent arrears, items missing or gardening chores not performed as agreed.

Both the tenant and landlord have to agree on releasing the bond. Either party can apply to Tenancy Services to have the bond refunded, by signing a bond refund form setting out the details for payment. Once an application for a refund of the bond is made by either the tenant or the landlord, the other party has 10 days to object.

If landlord and tenant don’t agree on how much of the bond should be refunded to the tenant, they can make an application to the Tenancy Tribunal. There is an application fee of around $20. The matter will first be referred to mediation. If mediation does not work, then the application will be referred to the Tenancy Tribunal for a decision.

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Can I transfer my bond to a new tenancy?

Yes, if the landlord agrees to it. A bond transfer form must be signed by the tenant, and the old and new landlords. The new landlord will then send the form to Tenancy Services.

If the amount of the old bond is more than the new bond, the tenant is entitled to receive a refund for the excess amount. If the new bond is more, then the tenant must give the new landlord extra money to make up the difference. The new landlord must send it, along with the bond lodgement form, to Tenancy Services within 23 working days of the start date of the new tenancy.

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What happens to the bond if a flatmate changes?

The departing flatmate should get back their share of the bond when they leave. Usually this is done by asking the replacement flatmate to pay their share of the bond directly to the departing flatmate.

If the departing flatmate’s name is on the tenancy agreement and the bond record then this will need to be updated. You’ll need to complete a Change of tenant form, stating which tenant is departing and which tenants are remaining and/or new. It will need to be signed by all of the tenants and sent to Tenancy Services within ten days of the change of tenant. When Tenancy Services processes the completed form they will also update their bond records.

It is important to keep the bond record up to date, because at the end of the tenancy (when all of the tenants leave), only the individuals named on the bond record will receive the bond refund.

You can find out more about what's involved on our Leaving a flat page.