What you need to know about rental Bonds Tip 9

What’s the deal with landlord insurance and rental bonds?

Rental bonds offer a level of protection if tenants break their lease agreement e.g. the tenant damages the property or fails to pay their rent.

The bond provides a financial safety-net from which some costs incurred can be recouped.

In many instances, the bond will be insufficient to cover costs and the landlord could be left out-of-pocket, either footing the bills or pursuing the tenants through the courts.

Usually, in all but minor cases, the bond is inadequate which makes landlord insurance an important investment.

Although the collection of a bond is not compulsory in all states and territories, making sure you collect the right amount of bond at the start of a tenancy ensures your policy responds effectively when it comes time to make a claim.

Failing to retain a bond can cause your claim to be reduced by the amount of the bond, or even refused (it is a condition of EBM RentCover policies that a four-week bond be collected at the time of signing a new lease agreement).

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Jason Gwerder
Friday, 4 December 2020

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