Headshot of Sarah Rayner - Solicitor at Everingham Solomons TamworthMost Australians will at some point in their lifetime sign a lease. Whether that be a residential lease for a property to live in, a retail space or for some other commercial endeavour.

Most Landlords will require you to put forth some kind of security deposit/bond in leasing matters.

But what are the requirements for you to do such a thing?

In short security for a Lease is not compulsory. In saying that however, most Landlords will require you to pay one. This gives them some security and goes some way to ensuring that they are not left out of pocket if you damage the property or fail to pay rent.

If you refuse to provide some kind of security, then it is likely that a Landlord simply will not lease the property to you and find a tenant that will.

So what happens to a Security deposit/ bond after you pay it to the Landlord?

Well that depends on what kind of Lease it is that you are signing, so let’s go through them.


If you are paying a cash security then Landlords are legally required to give you the option of lodging that security with the Rental Bond Board. The Rental Bond Board is a NSW Government run facility which is managed by Fair Trading. It allows both Tenants and Landlords to make a claim for the security in certain circumstances. It also protects the Tenants security by not allowing Landlord to make a claim for the security without cause.

If the Landlord is managing the property without an Agent, then they have ten (10) working days to lodge the security with the Rental Bond Board.

If the Landlord has engaged an Agent to manage the property then the Agent has ten (10) working days after the end of the month to lodge the security with the Rental Bond Board. We also note that a Landlord cannot require you to pay security of more than four (4) weeks rent.


A cash security paid with respect to a Retail lease must be lodged with the Retail Bond Board NSW, this is a NSW Government run facility very similar to the Rental Bond Board. The security must be lodged within 20 days from receipt of payment.


There is no requirement for a Landlord to lodge the security with a Government agency. Commercial leases usually have a provision that notes that the Security Deposit is to be held by the Landlord.

An alternative to paying a security deposit/bond is a bank guarantee. A bank guarantee is a promise given by a bank or lending facility to pay money to the Landlord if the Landlord makes a claim. They are issued for a certain amount and any claim cannot exceed that amount.

Leasing can be complex, overwhelming and is usually a big legal commitment so if you need assistance with a lease, contact us because Helping You is Our Business.

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