A hair on the floor, $400 for sticky-tape residue: Inflated landlord bond claims hitting tenants

More than four in five landlord bond claims at the Victorian Civil and Administrative Tribunal (VCAT) have been found to be at least in part spurious, according to a new report.

The Broken Bonds report by Anika Legal, a free online legal service that helps Victorian renters, found 82 per cent of landlords making claims against tenants had less than the claimed amount awarded to them by the VCAT. Thirty-nine per cent of these received nothing.

Anika Legal chief executive Noel Lim said the figures were due to a widespread practice of landlords and property managers inflating bond claims.

“Landlords are using bond claims to squeeze as much money as they can from renters, even if it means acting dishonestly,” he said. “Unfair bond claims push renters into financial hardship. [Almost] half of our clients had the ability to pay their next bond impacted by an unfair claim.

“Unfair bond disputes are actually starting cycles of disadvantage which can lead to homelessness.”

The average amount a bond claim was reduced by was $1688 and the average bond claim was for $1916. The report was based on 443 cases between January 2022 and December 2023. Of these, 147 were supported by Anika Legal, 51 per cent of which were resolved in some way.

Ramender Bakshi with husband Harmanpreet Singh and children Amyra Sodhi, 3, and Yasmin Sodhi, 8 months.Credit: Joe Armao

“There was a case where a landlord claimed $300 in cleaning fees,” Lim said. “The evidence was a single hair on the floor. That is the audacity of some of the claims.”

Ramender Bakshi accessed Anika Legal’s services in late 2023, after she received a $16,975 bond and compensation claim after being evicted from her rental.

She said the landlord had claimed she and her family had ruined the carpet, damaged floorboards, burnt a small section of the outdoor deck, put a hole in a wall and were responsible for a water leak and subsequent damage.

Bakshi denied causing damage outside fair wear and tear, was not provided with an exit report detailing evidence and said she had reported the water leak as soon as she knew of it.

The claim also sought compensation for stickers and markings left on walls by Bakshi’s child, which she refused to clean after a breakdown in the relationship between her and the landlord.

Bakshi said she was evicted soon after her landlord joined the property manager while she did a routine inspection, in which the landlord raised several issues with how Bakshi had kept the house.

After the issuing of the eviction notice, Bakshi said the landlord and tradespeople began turning up without notice to prepare it for the landlord’s daughter to move in. Bakshi had recently given birth and strictly observes an Indian tradition which requires new mothers to avoid visitors for 40 days after the birth.

Anika Legal had the payable amount reduced to about $3500. During negotiations, the landlord indicated he regretted making the claim, Bakshi said.

“[But] they just want to get their pockets filled with it and renovate their own property from our pockets. I know there are lots of renters out there going through this kind of thing.”

Lim said a client had been charged $400 for “sticky tape residue”, and the claim was reduced to $100 at VCAT. In another case, a landlord backed down on a claim after Anika Legal lawyers said they saw the property listed on Airbnb after the tenant had been told the owner was moving in. In a pending case, a landlord’s bond claim was the same amount as a compensation payment made for damage done during renovation.

Tenants Victoria director of client services Amy Frew said bond claims were a widespread issue. “Tenants Victoria helps over 1000 renters each year on bond claims,” she said. “There is no doubt that there are some landlords who still have trouble understanding basic concepts such as ‘fair wear and tear’ in a rental home, which means renters do struggle to get back their money in a timely way.

“Bonds should not be held captive by dodgy landlords who refuse to follow the rules.”

Real Estate Institute of Victoria senior vice president Sam Hatzistamatis would not comment on the Anika Legal figures because he could not be provided specific circumstances of the 443 cases included.

“It’s hard to comment on them as individual figures … without knowing the individual context of what’s happening in those cases.”

He said REIV members would not put forward spurious claims at VCAT because the institute trained them not to.

A Consumer Affairs Victoria spokesperson said: “Estate agents must comply with their professional conduct obligations under the law, including to act fairly, honestly and in good faith at all times.”