Rental Bonds in VIC: A Landlord's Guide

This article is general information only, not legal advice. The rules below are drawn from Consumer Affairs Victoria's guidance on bonds, and you should check the current figures directly with them before setting up a new tenancy.

Bonds trip up a lot of self-managing landlords. Not because the concept is complicated, but because the rules around amount and lodgement are strict and enforced. Getting it wrong can mean disputes down the track, or a VCAT order you didn't need to deal with. Here's what actually matters.

How much bond can you charge in VIC?

In Victoria, a bond is generally limited to one month's rent, provided the weekly rent sits at or below a set threshold. If the rent is above that threshold, or you want to charge more than one month's bond, you need an order from VCAT (the Victorian Civil and Administrative Tribunal) allowing it.

That means you can't simply decide to ask for two months' bond because a tenant has a patchy rental history, or because the property is high-value. Unless the rent threshold is exceeded, or you have a VCAT order in hand, one month's rent is the ceiling.

The threshold itself moves over time, so don't rely on a figure you read somewhere last year. Check the current rent threshold with Consumer Affairs Victoria before you finalise a bond amount, especially if you're renting out a higher-end property where the rent might be close to the cutoff.

Who actually holds the bond?

This is the part that catches people out. As a rental provider (landlord) in Victoria, you do not hold the bond yourself, and you can't keep it in a personal or business bank account "just in case." The bond has to be lodged with the Residential Tenancies Bond Authority (RTBA), and the RTBA holds it for the entire length of the tenancy.

There's a short set timeframe for lodging the bond after you receive it, so this isn't something to leave sitting for a few weeks while you sort out paperwork. Confirm the current lodgement timeframe with Consumer Affairs Victoria and build it into your move-in checklist so it happens automatically, not as an afterthought.

Practically, this means:

• You collect the bond from the tenant at the start of the tenancy.
• You lodge it with the RTBA within the required timeframe, not later.
• The RTBA, not you, is the custodian of those funds for the life of the tenancy.
• At the end of the tenancy, any release or dispute over the bond goes through the RTBA process, not a private arrangement between you and the tenant.

Why this matters day to day

Some landlords assume "the bond is mine to hold until move-out" because that's how it works informally in casual arrangements. In Victoria, treating a bond that way is a compliance problem, not just a bad habit. If a dispute arises at the end of a tenancy, whether it's about cleaning, damage, or unpaid rent, the RTBA process is what governs how the bond gets released or split. Your job as landlord is to make a claim through that process with evidence, not to unilaterally deduct from money you never should have been holding in the first place.

It also affects how you should talk to tenants about bond at the start of a lease. Being upfront that the bond goes to the RTBA, not to you, tends to build trust. It avoids the awkward conversation later where a tenant assumes you've been sitting on their money.

Setting the bond amount correctly

When you're setting up a new lease, work out the bond amount based on the actual weekly rent, then check whether that rent falls under or over the current threshold. If it's under, one month's rent is your bond, full stop. No negotiating a higher figure informally with the tenant. If the rent is above the threshold, or you have a specific reason to want more, you'd need to go through VCAT rather than just writing a bigger number into the lease agreement.

Don't guess on the threshold figure. It's one of those numbers that's easy to get wrong from memory, and getting it wrong means either short-changing yourself or asking for more bond than you're legally allowed to.

Lodging on time

Set a reminder the day you receive the bond, not the day you remember you should have lodged it. The lodgement window is short, and turning it into a habit, rather than a task you get to eventually, protects you if a tenant or Consumer Affairs Victoria ever asks when it was lodged.

Common mistakes to avoid

• Charging more than one month's bond without a VCAT order, based on an assumption that a "higher risk" tenant justifies it.
• Holding the bond in your own account temporarily "until the lodgement paperwork is sorted."
• Using an outdated rent threshold figure from an old lease template or a friend's advice.
• Trying to deduct from the bond directly at the end of a tenancy instead of going through the RTBA's claim process.
• Not telling tenants where their bond actually sits, which creates unnecessary suspicion later.

FAQ

Can I ask for a higher bond if I'm worried about the tenant?

Not on your own judgement alone. Unless the rent is above the current threshold, you'd need a VCAT order to charge more than one month's rent as bond.

Do I need to lodge the bond even for a short-term or casual tenancy?

Yes. The bond still needs to go to the RTBA within the required timeframe, regardless of how informal the arrangement feels between you and the tenant.

What happens to the bond if there's a dispute at the end of the tenancy?

Because the RTBA holds the bond for the whole tenancy, any disagreement about the amount to be returned or claimed gets resolved through the RTBA's process, not through a private deduction by the landlord.

Where do I check the current threshold and lodgement timeframe?

Go directly to Consumer Affairs Victoria's bonds page. These figures are updated periodically, so it's worth checking before every new lease rather than relying on memory.

If you're setting up a new tenancy and want the bond amount, lodgement reminders, and rent record-keeping handled without second-guessing the details, see what EZRENT does for self-managing landlords, or sign up to get your next lease organised properly from day one.

This article is general information only and is not financial, legal or professional advice. Rules, thresholds and requirements vary by state or territory and change over time - always check the current rules with your local tenancy authority or a qualified professional before acting on anything above.