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Final Bond Inspection – Landlord rights and responsibilities

WHAT IS A FINAL BOND INSPECTION?

A final bond inspection is carried out after the tenant has ended the tenancy and has delivered vacant possession. When we carry out this inspection, we compare the property against the Property Condition Report. This report is carried out prior to the Tenant moving into the property. This is a comprehensive report that details the condition of the property including any damages. We always take the time to ensure that this is carried out as thoroughly as possible because this is an area of Property Management where discrepancies occur.

What you as a landlord needs to know –

It is important to understand your rights and responsibilities to avoid disputes and potentially save time and money when it comes to FBI

During a residential tenancy in Australia, as a landlord you have various responsibilities which must be upheld. As with most things in this industry, there is legislation that protects your rights and your tenants’ rights.

Property damage

You’re entitled to have your property returned to you in a clean and undamaged condition at the end of a tenancy. But remember the difference between deliberate damage caused by recklessness / neglect and fair wear and tear. Your tenant is not responsible for fair wear and tear on the property.

More often than not, the property will not be in the exact same condition as at the commencement of the Tenancy. This does not necessary mean that the Tenant has caused intentional damage. Damage occurs just through general use of a property which is classified as “fair wear and tear” under the Residential Tenancy Act the Tenant is not liable for this damage. Some examples of fair wear and tear would be:

  • loose handles to cupboard doors
    • light marks and scuffs to walls
    • wear marks to traffic areas to carpeted areas

The final inspection

As soon as is possible after the end of a tenancy, you or your property manager must conduct a final inspection of the property, prepare the final condition report describing the condition of the property and then provide a copy of that report to the tenant.

Where possible, your tenant must be given reasonable opportunity to attend this final inspection. It’s in the best interests of both parties to undertake a joint inspection at the time the tenant moves out and to arrange for the return of the property keys.

Use your property condition report

Using the Property Condition Report you prepared at the start of the tenancy, you / the property manager should compare the condition of each item with the original details and discuss any issues such as breakages, damage or items missing with the tenant. You should then work out any outstanding liabilities of the tenant, such as:

  • rent arrears;
  • outstanding water, gas and electricity bills;
  • cleaning costs (if the property was not left in a clean condition); or
  • damage to the property and contents belonging to the lessor (if applicable).

Costing repairs

Your tenant is liable to compensate you for any wilful or neglectful damage they may have caused. However, unless your tenant has completely caused havoc on your fixtures or fittings, it can be difficult to ascertain an amount to claim for damages to contents. The general rule of thumb is that if the damage can be reasonably repaired, only the repair costs can be charged.

If the damage is severe – i.e. carpet damage that requires replacing, the tenant would be liable to pay for replacing the damaged carpet with one of similar quality to the original. Generally, it’s far more difficult to assess burn marks or stains that cannot be removed. Assessment is going to depend on a few factors, including the age of your property and the size and location of the damage. Where possible, it’s better to negotiate the sum of money to be deducted from the bond as compensation.

Keep it civil

Make every effort to agree with your outgoing tenant on the amount of deductions from the security bond. In the event of a disagreement with the tenant, try to compromise if possible. If this doesn’t go to plan, the disposal of the bond will need to be resolved in your state Magistrate’s Court.

Return of the keys

Your tenant is responsible for returning all sets of keys provided to them at the start of the tenancy. If they don’t return the keys, you can hold them responsible for the cost of changing the locks or charge rent until the keys are returned.