Why landlords should take a bond from every single tenant

We hear the term "guarantee" bantered around a bit within the property management world.  We hear prospective tenants regularly offer to have their mum, dad or guardian go as a guarantee for them at the time of applying for a rental property.

And many property managers believe by taking the guarantee they are further protecting their owner should the tenancy fall into arrears or should there be damage at the conclusion of the tenancy.

But sadly this is not correct. The correct facts are:

• If you take a guarantee, you are unable to receive a bond.

• And the guarantee is only responsible to guarantee the amount that is equal to the bond amount.

So now I am sure you are seeing the potential problems.

A bond should be taken on every single occasion, unless instructed by the owner of the property otherwise (and you would confirm their instructions in writing of this request).

In situations where parents or guardians are wishing to assist prospective tenants, instead of discussing guarantees (which I know you see now are not the wise option), have those people complete a tenancy application form.

Process their application and present all the applications to the owner for consideration. Yes, I know they won’t be residing at the property, and that is OK (and it's not sub-letting, for anyone thinking it). But by having them form part of to the tenancy agreement, they are now equally responsible for the term of the tenancy. They are responsible for the condition, rental payments and for any potential loss in excess of the bond amount.

Leah Calnan is the director of Metro Property Management in Victoria and is the chairwoman of the REIV Property Management Chapter.