Can we get our bond back?

Question from Jade updated on 12th October 2012:

I signed a fixed-term contract in a flatting situation. After 48 hours of signing the contract, I had to tell the landlord we could no longer move into the property. Three of the flatmates pulled out because of the excessive noise from the nighbours. The property was advertised as a five-bedroom, three-bathroom house with a dishwasher and in 'very tidy condition'. When we went to view the property, we were told to bring $2,200 for bond. When we arrived we realised it was only two bathrooms and were told the dishwasher was broken, I asked the landlord to fix it, she said she wouldn't do it. The front of the property has been used as the rubbish tip for the surrounding apartments. After we had signed the contract (which we felt we were pressured to do because she had so many others interested), we were then told we had to pay one week in advance. We did not sign a bond lodgement form. We have offered to pay one week out of goodwill, even though we never moved in. Can we get our bond back?

Our expert Megan Martin responded:

Whether or not a bond is able to be paid to you will depend on a number of factors. If you (the tenants) and the landlord have agreed to terminate the fixed term tenancy early then you can apply to the Department to have your bond paid to you. A bond refund form can be downloaded from www.dbh.govt.nz and should be completed by all parties. However, if you still hold a fixed term agreement then generally the bond is only able to be paid to you with the agreement of your landlord. Please note under the Residential Tenancies Act, landlords have an obligation to lodge any bond payment received by the tenant within 23 working days. If you are unsure whether your bond has been lodged, you can contact the Department’s bond advice line on 0800 737 666. It is also important to understand that a fixed-term tenancy cannot be ended by notice (including tenancies where a signed agreement is in place even if it has not yet commenced) and can only be terminated by mutual agreement between the landlord and the tenants or by the Tenancy Tribunal in limited circumstances . Therefore you will need to discuss this with your landlord in order to obtain their agreement to the early termination if you no longer wish to hold the fixed-term tenancy. If you cannot reach an agreement then you may apply for an order from the Tenancy Tribunal. All tenants will continue to be responsible for the tenancy (including payment of rent) until the fixed-term tenancy has ended. If your landlord does not agree to the early termination of the agreement then you may be able to assign your tenancy (or your portion of the tenancy) to a new tenant. This is where you find a new tenant to take over the tenancy agreement or your share of it. You will need the consent of your landlord to do this which cannot be unreasonably withheld unless assignment is expressly prohibited in your tenancy agreement. However, your landlord can attach reasonable conditions to their consent. I suggest you discuss your situation with your flatmates and your landlord including any concerns you may have regarding lodgement of the bond and how or if the bond is to be refunded. If you reach an agreement about ending your tenancy early or about assigning your tenancy then you should record that agreement in writing. Visit www.dbh.govt.nz for further information or phone 0800 TENANCY (0800 836 262).

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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