The deposit, or bond, is the money paid by tenants at the signing of the
tenancy agreement as security against potential damage to the property or its contents or against missed rental payments. This money is kept until the end of the tenancy and refunded
if the property is left in an equivalent condition to the one in which it was first rented.
By law, landlords can request a bond with an equivalent value of a month's rent or less on properties where the rent is less than $700 a
week. This is to ensure the deposit is affordable to tenants on relatively low incomes. There is technically no cap on the amount of deposit that landlords may charge for properties costing more than $700 per week to rent.
Knowing how much deposit to charge is a balancing act. On the one hand, it needs to be high enough to dissuade tenants from potentially forfeiting it by damaging the property. However, setting the bond too high may price you out of the market and reduce the
pool of prospective tenants.
Sticking to the one-month rule greatly
simplifies things and seasoned tenants will usually be happy enough to pay this as a deposit. They will be aware that paying a higher bond is part of the territory when it comes to living in a better area of the city.
Certain caveats apply, however. The deposit payable on a furnished home will obviously be higher than one that is let on an unfurnished basis. There are simply more things to damage. Pet owners will also expect to pay a larger bond than other tenants.
Remember that if the tenancy agreement states that no pets are allowed in
the property and the tenant is found to have a dog or cat they will be in breach of their tenancy agreement. In this scenario you have to
power to begin eviction proceedings. This is a further service your
property management company will be able to provide.