Returning bond to tenant - help please!

[Sydneysider21]

Hi all, I rented out a property to a tenant without the use of a PM. My tenant has given notice and is leaving. When I rented it out, I made a newbie mistake. I forgot to lodge the bond (4 weeks rent) with the NSW Rental Bond Board. From past memory of my own experiences of renting several years ago, I recall I got my bond back with a small amount of interest. I want to return the bond to my tenant, and add on the interest, as if it had been lodged with the Rental Bond Board 2 years ago, as (obviously) I don't want her to be disadvantaged by my mistake.

As many of you are landlords, I was wondering if anyone knew what the interest rate is these days?

Many thanks in advance

 

[Propertunity]

http://www.legislation.nsw.gov.au/fullhtml/inforce/subordleg+608+2003+cd+0+Y#pt.3-sec.10

10 Interest payable on rental bonds (section 11A)

(1) The object of this clause is to fix the rate at which interest is payable, and the period over which interest is to be compounded, on a rental bond that has been lodged with the Board.

(2) For the purposes of section 11A (2) of the Act:

(a) the prescribed rate at which interest is payable on a rental bond is the rate payable (as at the last day of the month for which the interest is being calculated) by the Commonwealth Bank of Australia on a Streamline Account balance of $1,000, and

(b) the interest payable on a rental bond is to be compounded on 30 June and 31 December in each year.

Also it is an offence not to lodge the rental bond - be very careful.

 

[Sydneysider21]

I should add, I have searched and searched for information on the Rental Bond Board and haven't found anything, and I've also searched the Fair Trading website. Nothing.

 

[Sydneysider21]

propertunity, we posted at the same time. Thanks very much for the info and links

yes I realise *now* its an offence not to lodge it. Believe me, its a mistake I'll only make once. Getting a PM to handle it now

 

[zepth]

We just got our bond back from a rental we had been in for 6years and 10 months. Our $1260 bond was returned with an incredible $1.20 in interest. So I think the interest portion is the least of your troubles.

Should you get found out for not lodging the bond in the first place that will be the real worry

 

[Propertunity]

I was told many years ago that the Rental Bond Board invested it at high interest and used that to fund the running of the Tribunal. Dunno if that's true or not. Paying the pathetic rate of interest out that they do, I would not be surprised.

 

[Aaron_C]

More like the interest was used to cover the budgetary black holes and pork barreling...is it any wonder that lots of private landlords don't even bother lodging it with the bond authority?

 

[marg4000]

I was told many years ago that the Rental Bond Board invested it at high interest and used that to fund the running of the Tribunal. Dunno if that's true or not. Paying the pathetic rate of interest out that they do, I would not be surprised.

This is probably true. Money in solicitors' trust accounts accrue no interest to the person who deposited it, but the interest is (or at least it used to be) used to pay insurance for compensation for dishonest solicitors.
Marg

 

[DaveM]

I was told many years ago that the Rental Bond Board invested it at high interest and used that to fund the running of the Tribunal. Dunno if that's true or not. Paying the pathetic rate of interest out that they do, I would not be surprised.

In NSW yes, the interest on monies lodged with Dept of Fair Trading/RBB is invested and the proceeds partly fund the operations of the tenancy advisory service and the CTTT mediation process.