Rental Security Bond Complication - Legal Advice Would Be Appreciated

LLegaldrugs on 23/07/2021 - 09:55
Last edited 23/07/2021 - 13:55

Hey guys. First time posting , but I'm actually in a pickle because I'm not sure what to do in this situation .

I've got a home with 2 rooms currently on rent . Both occupants are brothers.
Let's call Tenant 1 T1 and Tennant 2 T2.

T1 has been renting one room at my place for roughly 2 years now back in 2019. At that time, the second rental room was occupied by another tenant.

About 8 months ago, I was notified that the tenant in the other room was leaving. T1 contacted me and requested that his brother (T2) would like to rent the now vacant room. Having met T2 once before and having known T1 as a reasonably reliable tenant, I agreed. I just requested that I receive a 2 week rental security bond in advance to lock it in.

This is where things get complicated.

T1 sent me T2's 2 week deposit saying that it's his brother, he'll take care of it.

Fast forward those 8 months, the brothers have had some form of large disagreement and T1 is now moving out. He's asked for his own security deposit back (2 weeks which he had paid 2 years back when the rental began) and has asked me to take note that when his brother T2 moves out, that the deposit he made on behalf of him is his and is to be returned back to him (T1) not his brother (T2).

The argument was apparently intense to the point where T2 was not notified by his own brother that he was moving out until the 2nd last day (T1 had notified me 2 weeks prior as we had agreed for rental notifications ).

T2 contacted me alerting me about T1s departure and I notified him that I was notified in advance . I mentioned the bond situation to T2 , which he implied that on the day that he moves out, it is to be returned to him (T2) and not (T1). I told T2 I'd have to contact T1 to get some clarification to which he stated that he has already paid back his brother T1 for the bond deposited . I requested T2 to provide evidence a bank statement or something like a cash reciept of such a transaction as that provides means for the bond to be allocated to T2 on the day he moves out.

He hesitated and mentioned that T1 actually owes him money, so that bond paid on behalf of T2 by T1 is actually his. I said that ordeal was out of the context of this conversation and that I need some form of evidence because the bond deposited for T2 was from T1s bank account .

T2 snapped back saying that alright "should anything happen to the room, not saying it will because I'm not like that. I'm not a bad guy , it will be coming out of that bond right ?".

And that got me really thinking . Has T1 technically forfeited his rights to the bond by depositing it for T2 and that bond is now to be returned to T2 upon departure ( assuming the room is cleaned and there are no damages ) etc ? Or does T2 have no right over the bond as T1 deposited it on behalf of him and it is to be returned to T1 when T2 leaves.

Thanks in advance guys , appreciate any feedback !

TLDR: If T1 provides the bond for his brother T2, at the end of T2's rental period , who gets the bond back?

Financial

Comments

  • bobbified on 23/07/2021 - 10:00
    +4

    T1 did say he was putting it down FOR T2. So, from your perspective, it's T2's bond and, as long as he's in the house, you keep that bond FOR T2.

    Make it clear to both of them and let them work out the rest.

    • Legaldrugs on 23/07/2021 - 10:50

      Yes given the situation I will continue holding that bond for T2 . The issue is what happens after T2 decides to end the rental agreement . Is the bond returned to T1 who deposited it on behalf of T2 or is it now returned to T2 ( again assuming no damages, money issues like late rent etc on T2's end where the bond money would be then used as needed)

      • bobbified on 23/07/2021 - 10:54

        For consistency, I would be taking it as T2's money and returning it to T2 at the end of all this. Where the money came from at the start is irrelevant since it's "T2's bond".

        It's not ideal, but you have to take this stance to protect yourself. They can work it out amongst themselves.

        It's not something you want to be in the middle of - if it becomes a bigger issue, kick T2 out as well.

        • Legaldrugs on 23/07/2021 - 11:17

          I see , so T1 in this case has forfeited the bond as he was paying it on behalf for his brother as a good gesture , basically in a sense Its T2's bond money then. I was considering that last bit. Just vacate T2 aswell and start with fresh tenants .

      • Austaurean on 23/07/2021 - 13:25

        T1 paid it for T2, so if T2 moves out, id give it to T1, the person who actually paid it. Unless proof provided that T2 paid T1 back..

  • loulou1 on 23/07/2021 - 10:06
    -1

    Stay out of it, let them claim the bond back from the appropriate authority, assuming you lodged the bond as required

    • Legaldrugs on 23/07/2021 - 10:53
      -1

      Im trying to stay out of it as it's a dispute between the two but they're basically involving me in it because I'm the landlord holding the bond . Neither have asked for the bond back now, just when T2 leaves , he believes it is returned to him where's T1 claims it's his because he deposited it on behalf of T2 . T1 has agreed however that if there are any damages or issues from T2, the bond is to be used as compensation but requested it to be returned back to him if there are none .

      Also here in the NT, there doesn't appear to be any outside trust body for the bond. Landlord's are to legally deposit the bond money into a bank and not use it for any personal means , also to provide evidence of the reception / bank transaction to the sender to confirm they've received the bond

  • holdenmg on 23/07/2021 - 10:10

    Is the Bond deposited to the Tenancy Trust Account administered by Consumer Affairs?

    If the bond is recorded on the database in two or more names, you will only be entitled to an equal proportion
    of the bond unless you can provide a bond receipt made out in your name alone, or provide a letter of
    authorisation, from the other contributors to the bond, with a copy of his/her drivers license or other ID.
    If the information you provide satisfies the Commissioner that you are indeed the rightful owner of the bond
    held in trust, you will be required to complete an authorisation form to enable payment of the bond by bank
    transfer or cheque
    https://consumeraffairs.nt.gov.au/__data/assets/pdf_file/000…

  • Summoner on 23/07/2021 - 10:37

    Seems to be a private arrangement where bond was not lodged to the relevant authority. In general, bond belongs to leasee no matter who pays for it. If the bond were to be lodged, it would have been lodged under the leasee's name, and authority will only issue the refund to leasee. But its just a common sense, if you are in doubt, seek a legal advice or try to persuade the brothers to talk it out and get a signed consent who you are refunding to to avoid any dispute.

  • dasher86 on 23/07/2021 - 10:39
    +4

    simple and complicated solution.

    Tell T1 bond was surrendered to to T2
    Tell T2 bond was surrendered to T1

    Let them sort it out.

    Joking!

  • iNeed2Pee on 23/07/2021 - 10:50
    +3

    I think T3 should get it

    • Legaldrugs on 23/07/2021 - 10:50

      I guess I'm T3 then , compensation for all the complications :/

  • SF3 on 23/07/2021 - 10:50
    +4

    This is a prime example of, why we shouldn't have financial dealings with family.

    OP, your stance should be "Not my circus, not my monkeys"

    • Legaldrugs on 23/07/2021 - 11:15

      I agree, family dealings like this can get messy 😓

  • holdenmg on 23/07/2021 - 11:03
    +1

    Hi,

    This is a Generic Fact Sheet on Bonds/Security Deposits held by Landlords.
    https://consumeraffairs.nt.gov.au/__data/assets/pdf_file/000…

    If cash, cheque or credit card is used to pay a security deposit the landlord must immediately give the tenant a
    receipt.
    The security deposit receipt must be signed by the person who received the payment and must contain:
     the date the amount was received;
    the name of the tenant/tenants on whose behalf the payment was received;
     the amount paid; and
     the address of the premises to which the bond or security deposit relates.
    The tenant may request in writing from the landlord, the name of the account in which the security deposit is
    held and other prescribed details under section 32 of the Residential Tenancies Act 1999.
    The security deposit receipt should specify what proportion each tenant has paid in relation to the tenancy
    agreement. If this is not specified the security deposit is to be taken to have been paid in equal proportions by
    all the tenants.

    • Legaldrugs on 23/07/2021 - 11:12
      +1

      I see thank you, technically then T2 is to have the bond returned to him when he decides to vacate even though T1 has paid 100% of the portion towards T2's tenancy bond ( as T1 was paying it on behalf of T2 which was seemingly out of good gesture as they are brothers, hence forfeiting his own right to the monies )

      • holdenmg on 23/07/2021 - 11:32
        +1

        Yes, that is my read of it too.

        T2 doesn't have the Receipt, T1 has the Receipt with T2's name on it as Occupier.

        On leaving, I'd want T2 to provide the Receipt and a release from T1 and if they don't like it I'd deposit the Bond with Consumer Affairs NT and let them each stake their claim.

        • Legaldrugs on 23/07/2021 - 11:34
          +1

          Consumer affairs NT , I'll look into that thank you

  • Hardlyworkin on 23/07/2021 - 13:49
    +4

    You could consider seeking advice from B1 and B2.

    • holdenmg on 23/07/2021 - 13:53

      They put everything they earn into Chiquita Brands.

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