Rental Bond Refunds and Damage Compensation

The Fijian Competition and Consumer Commission (“FCCC”) has encountered since 2010 many complaints from tenants and landlords alike on the issue of bond refunds and damage compensation. Over the years, FCCC observed with concern, which often becomes a cause of frustrations for tenants and landlords.

At times, these frustrations are taken out against one another in heated argument exchanges and also against the officers of enforcement agencies such as Consumer Council of Fiji (CCOF), Fiji Independent Commission against Corruption, (FICAC), Fiji Police Force including FCCC.

If not clarified well to the general population, the disputes on the two referred issues will continue on. As such, this week’s article will attempt to provide some clarity to the landlords and tenants including agents on the ways they can resolve their issues.

Rental Bond Refunds!

A rental bond is money paid by the tenant at the start of a tenancy agreement. It is used as financial protection for the landlord in case the tenant breaches the terms of the agreement.

A bond is sometimes referred to by other names, such as a security deposit, linen deposit, key (or security card) deposit. However, if it is money paid as protection over the property and its inclusions that is not rent – then it is a rental bond. It is paid in addition to rent. The sum paid is normally equivalent to one rent period or as the parties agreed.

This money is normally processed at the end of a tenancy or when the property is delivered vacant back to the landlord. Once the tenancy comes to an end, both parties are expected to evaluate whatever dues in terms of unpaid bills, damages and rent the tenant need to clear. This will determine the amount to be refunded or paid.

If the parties agree!

If the tenant/s and lessor/agent agree on the amount to be refunded, they should conduct the exchange and document it properly. Each of the parties must have a copy of the document of exchange.

If the parties don’t agree!

If the tenant/s and lessor/agent do not agree on how the bond is to be refunded, any party to the bond (tenant or lessor/agent) can file a claim in the Small Claims Tribunal (SCT) within a reasonable time after the vacation of the property. The SCT will process the claims received, and will send the other party a notice of claim..

What is FCCC’s involvement on bond money refund?

The FCCC will only be involved, if it appeared that the landlord or agent is withholding the bond for no valid reasons.

As such, an unfair withholding of bond may become a subject of FCCC’s investigation. In most cases FCCC would attempt to resolve the issue via mediation.

If the matter is not resolved via mediation, the aggrieved party is at liberty to file a claim in a court of competent jurisdiction privately.

FCCC cannot be required to demand from the landlord on the refund of the bond money or vice versa.

Damages Compensation!

The Property Law Act provides how the tenant should leave the property behind -

“........ that he or they will, at all times during the continuance of the said lease, keep, and at the termination thereof yield up, the demised premises in good and tenantable repair, having regard to their condition at the commencement of the said lease, accidents and damage from fire, flood, lightning, storm, tempest, earthquake and fair wear and tear (all without neglect or default of the lessee) excepted ...... ” FCCC cannot be expected to enforce compensation either to tenants or landlords.

For any dispute on the damages, both parties are at liberty to pursue compensation privately in a court of competent jurisdiction. It is important for both parties to jointly prepare a condition report of the property at the start of the tenancy and at the end.

This will provide a good basis to establish the damage that the tenant is liable for. Any damage caused by accident, natural causes including fair wear and tear, should not be demanded on the tenant.

Advice from the FCCC!

It is an offence under FCCC Act 2010 for a landlord or agent to unfairly withhold rental bond money of a tenant at the end of a tenancy. FCCC expects that the parties in a tenancy act fairly and transparently in the processing of bond refund and damage compensation. Only a suspected unfair treatment of a tenant should be reported to FCCC and not claims of compensation or the non-refund of the rental bond. To all landlords and agents, please remember, you can deduct bond money for any unpaid bills, damages or unpaid rents of your tenant, but refrain from engaging in any way that is unfair or would be deemed to be unfair towards your tenant.