Bond refunds can be a sticking point

Property management is a highly legislated industry, and in order to maintain your own professional credibility and that of the industry, all aspects need to be adhered to at all times.

The current legislation has been in force since 1997 and as times change, technology advances, the legislation too must keep up. In the coming 12 months, we should see a review to Victoria’s Residential Tenancies Act.

That being said, one aspect of the act still astounds me that is not followed and that relates to the refund of bond money.

When a tenant provides 28 days’ notice to vacate and vacates the property, a final inspection must be completed and the bond must be either refunded or an application made to VCAT (Victorian Civil and Administrative Tribunal) within 10 working days.

The normal practice should go something along the following lines:

• Keys returned
• Final inspection completed
• Tenant advised of any concerns
• Owner advised of any maintenance, repairs, etc.
• Opportunity provided to the tenant to return to attend to any matters of concern
• If the matter cannot be resolved then an application is made to VCAT to retain the tenants bond under section S417,418 & 419 of the Residential Tenancies Act.
• The property manager/agent/landlord is required to provide evidence of any damage, repairs, arrears that should be deducted from the tenants bond. Evidence means photographs, reports from tradespeople, invoices, quotes, condition report (entry and exit) and any other communication or documentation that may be relevant.

All this must be arranged and attended to within 10 working days of receiving possession of the property. Communication is the key. Don’t stop talking to the other party, because nine times out of 10 the matter can be negotiated before the VCAT hearing.

Failing to adhere to the legislation could result in fines.

It’s also extremely important that owners understand and receive education on things such as depreciation (and how it’s calculated), the length of a tenancy and most important of all “wear and tear”.  It’s unrealistic for either a property manager or landlord to go to VCAT seeking replacement or compensation of a carpet in a house when the carpet may be 15 years old – depreciation of the carpet must be taken into consideration.

It is not only our legal obligation as property managers, but it is also in everyone’s best interest to ensure that bond is dealt with as soon as possible.