Bond lodgement in NZ: step-by-step guide for landlords

What is a tenancy bond?

A tenancy bond is a security deposit paid by the tenant at the start of the tenancy. It provides a financial safeguard for the landlord in case the tenant causes damage beyond fair wear and tear, leaves the property unclean, or owes unpaid rent at the end of the tenancy.

In New Zealand, bonds are regulated by the Residential Tenancies Act 1986 and must be lodged with Tenancy Services — a division of the Ministry of Business, Innovation and Employment (MBIE). You cannot hold the bond yourself.

How much bond can you charge?

The maximum bond you can collect is four weeks' rent. This applies regardless of the property type, the tenant's history, or any other factor. Charging more than four weeks' rent is unlawful.

For example:

| Weekly rent | Maximum bond | |-------------|-------------| | $450 | $1,800 | | $550 | $2,200 | | $650 | $2,600 | | $750 | $3,000 |

You can charge less than four weeks' rent if you choose, but most landlords collect the full amount.

Note: The bond is separate from rent in advance. You can ask for up to two weeks' rent in advance at the start of the tenancy, in addition to the bond.

Step-by-step: lodging the bond

Step 1 — Collect the bond

Collect the bond from the tenant before or at the start of the tenancy. Record the amount, the date, and the method of payment. Issue a receipt.

Step 2 — Complete the bond lodgement form

You need to submit a bond lodgement to Tenancy Services. This can be done online through the Tenancy Services website or using the physical Bond Lodgement Form.

The form requires:

• The address of the rental property
• The names of all tenants on the agreement
• The landlord's (or property manager's) details
• The bond amount
• The date the bond was received

Step 3 — Lodge within 23 working days

You must lodge the bond with Tenancy Services within 23 working days of receiving it. This is a firm deadline — not a suggestion.

Failing to lodge the bond on time can result in:

• A penalty of up to $1,000
• The tenant filing a complaint with the Tenancy Tribunal
• Damage to your credibility if a dispute arises later

Step 4 — Confirm lodgement

Once the bond is lodged, Tenancy Services will send a confirmation (called a Bond Record) to both the landlord and the tenant. Keep this for your records — you'll need the bond number when it's time to process a refund.

Practical tip: Lodge the bond as soon as you receive it. Don't wait until the 23-day deadline. If you collect the bond on the same day the tenancy starts, lodge it that week. The sooner it's done, the less likely you are to forget.

The bond refund process

When the tenancy ends, the bond needs to be refunded — either in full to the tenant, in part to each party, or in full to the landlord (rare, and usually only after a Tribunal order).

If both parties agree

This is the simplest scenario. The landlord and tenant agree on how the bond should be split, and both sign a Bond Refund Form. This can be submitted online.

Once both parties have signed, Tenancy Services typically processes the refund within 5–10 working days.

If only one party applies

Either the landlord or tenant can apply for a bond refund unilaterally. When this happens, Tenancy Services notifies the other party, who then has 10 working days to dispute the claim.

• If no dispute is filed within 10 working days, the refund is processed as requested.
• If a dispute is filed, the matter is referred to the Tenancy Tribunal.

Common scenarios

• No issues: Tenant leaves the property clean and undamaged, rent is paid up. Full refund to the tenant.
• Minor cleaning or damage: Landlord claims a portion for cleaning costs or minor repairs. If the tenant agrees, both sign the form. If not, it goes to the Tribunal.
• Significant damage or rent arrears: Landlord claims all or most of the bond. This almost always requires Tribunal involvement unless the tenant agrees.

What counts as fair wear and tear?

This is where most bond disputes arise. Fair wear and tear refers to the normal deterioration that occurs through everyday use of a property. It is not something the tenant can be charged for.

Examples of fair wear and tear:

• Faded curtains from sun exposure
• Minor scuff marks on walls
• Worn carpet in high-traffic areas
• Small nail holes from hanging pictures
• Fading or discolouration of paint over time

Examples of damage (not fair wear and tear):

• Large holes in walls
• Stained or burnt carpet
• Broken windows
• Damaged appliances through misuse
• Mould caused by the tenant's failure to ventilate

Key principle: Compare the condition of the property at the end of the tenancy against its condition at the start, allowing for reasonable wear and tear over the duration. This is why a thorough property condition report with photographs at the beginning of the tenancy is essential. Without it, proving damage becomes significantly harder.

Handling bond disputes

If you and your tenant can't agree on the bond, the matter goes to the Tenancy Tribunal.

Before you apply

1. Document everything. Photographs of the property at the start and end of the tenancy, copies of the tenancy agreement, any written communications, receipts for repairs, and the property condition report.
2. Get quotes. If you're claiming for repairs or cleaning, obtain written quotes or invoices from tradespeople. The Tribunal expects evidence of actual or estimated costs — not rough guesses.
3. Be reasonable. The Tribunal takes a dim view of landlords who claim the full bond for minor issues. Only claim what is genuinely warranted.

At the Tribunal

The Tribunal will consider:

• The property condition report (if one exists)
• Photographic evidence
• The age and condition of the items in question (depreciation applies)
• Whether the damage goes beyond fair wear and tear
• Quotes or invoices for remediation

Decisions are legally binding. If the Tribunal orders a refund to the tenant, you must comply.

Common mistakes landlords make with bonds

1. Not lodging the bond on time. The 23-working-day deadline catches many landlords, especially those self-managing for the first time.
2. No property condition report. Without a detailed record of the property's condition at the start, your position in any dispute is significantly weakened.
3. Claiming for fair wear and tear. Trying to charge tenants for normal deterioration is both unlawful and a quick way to lose a Tribunal case.
4. Not applying for the refund promptly. Some landlords delay the bond refund for weeks or months. This frustrates tenants and can result in a Tribunal application.
5. Holding the bond themselves. The bond must be lodged with Tenancy Services. Keeping it in your personal account is unlawful.

Tips for a smooth bond process

• Do a thorough property condition report at the start — with dated photos of every room, appliance, and any existing damage. Have the tenant sign it.
• Conduct a pre-exit inspection a week or two before the tenant moves out. Walk through the property together and note any issues. This gives the tenant a chance to address them before the final inspection.
• Be fair. If the property is in good condition, refund the bond promptly and in full. Good relationships with tenants pay dividends.
• Keep meticulous records. Every receipt, every photograph, every communication.

Managing bonds well is a fundamental part of being a good landlord. Tools like keel can help you track bond lodgement dates, store condition reports, and manage the refund process — but the underlying principle is simple: follow the rules, document everything, and be fair.