Rental Bonds: How They Work in New Zealand

Why do I need to pay a rental bond?

A rental bond is typically required by landlords as a form of security against any potential damages to the property or unpaid rent during the tenancy period. It’s like a safety deposit that ensures the landlord is compensated if there are any problems when you move out. Once you fulfill your lease terms and leave the property in good condition, you should get your bond back. You bond will typically be used to cover:

• Unpaid rent
• Damage to the property
• Any claim(s) relating to the tenancy

How do I pay a rental bond?

Lodging your bond is a fairly straightforward process and can be done either online or via direct debit.

How do I lodge and pay for my bond online?

1. Download and complete a bond lodgement form: note that if there are more than two tenants you will need to complete an additional tenants bond lodgement form.
2. Ensure that everyone’s signature has been included: signatures are necessary for the bond to be refunded at the end of the tenancy.
3. Scan and upload the form: forms need to be saved and uploaded as a PDF.

Once the form is completed, do the following:

1. Select “lodge your bond”: and make a payment using your credit or debit card. Alternatively, payments may be made by Account2Account transfer via online banking.
2. You will receive an email once the payment is processed: bond lodgements usually take up to 10 working days to process.

How do I lodge my bond via direct debit?

If you are someone who frequently lodges multiple bonds at a time (e.g. a landlord, agent or property manager), you may qualify to make bond payments by direct debit. Note that this is not an option for tenants.

1. Read and complete a direct debit authority form: this form details the terms and conditions of the service and will remain in force until you advise Tenancy Bond Services you want to cancel the arrangement.
2. Email the completed direct debit authority form: to bond.finance@mbie.govt.nz
3. Once your form has been processed: Tenancy Bond Services will email you a unique direct debit authority identifier (DDAUTHID).

Once you’ve been granted permission to submit bonds via direct debit and have received a direct debit authority identifier (DDAUTHID), you can proceed to lodge your bonds using direct debit:

1. Ask the parties to complete and sign the bond lodgement forms: as usual.
2. Complete and sign the direct debit payment form: taking care to check your forms.
3. Email the direct debit payment form and all the bond lodgement forms to bond.finance@mbie.govt.nz.

How much rental bond can be taken?

A bond can be up to the equivalent of four weeks’ rent and no more. If a landlord increases the rent, they can ask their tenant to pay additional bond in line with the increase. Other forms of security are not allowed, but a landlord may ask for a guarantor’s agreement.

For example, if a tenant has paid a bond equivalent to three weeks’ rent and their weekly rent goes up by $10, this means their landlord can ask for an extra $30 to be paid to the bond. You must lodge the extra bond with the initial bond amount by completing an additional bond lodgement form.

If the rent decreases and the total bond is now more than four weeks’ rent, the tenant can apply to have the extra bond refunded.

How do I get my rental bond back at the end of my tenancy?

Landlords and tenants need to complete and submit a bond refund form at the end of a tenancy. Ideally, when the tenancy ends, you and your landlord should inspect the property together.

If the inspection shows everything’s in order, complete the bond refund form and send it to Tenancy Services to be processed. It usually takes about five working days to refund a bond once a fully completed form is received.

At the end of a tenancy, a tenant can opt to transfer the bond to a new tenancy, rather than getting a refund. To transfer a bond to a new rental property, the tenant needs to complete and sign a bond transfer form. It must also be signed by both the old and new landlords. The new landlord then sends this form to Tenancy Services. 

How does general wear and tear affect my bond?

You don’t have to pay for reasonable wear and tear, like the carpet looking slightly more worn than when you arrived. But you will have to pay for any unusual damage. For example, if you stain carpets or break cabinetry, which the landlord has to replace. Landlords can also take money from the bond to pay for cleaning if you don’t clean the property properly before you leave. 

What if there’s a disagreement about the refund of a bond?

If there’s unpaid rent or other outstanding costs, the tenant and landlord may agree to split the bond. Part of the bond is refunded to the landlord, to cover their costs, and the rest goes to the tenant.

If you can’t agree on the refund amount, and if both the landlord and tenant(s) are willing, you can ask for a mediator, to help you reach an agreement.

If you don’t want to use a mediator, or mediation doesn’t work, you will have to attend a Tenancy Tribunal hearing. You can apply online to the Tenancy Tribunal for help, but it’ll cost you an application fee of $20.44.

What happens to a bond if a co-tenant moves out of the property?

If a tenant changes during the lease, and they’ve contributed to the bond, you’ll need to update the name on the bond record. This process is different from transferring the bond to a new property. The exiting tenant can then apply to get their bond back. 

Compare home and contents insurance for free with Canstar!

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.