By a rental bond, we mean any tripartite legal agreement between a tenant, landlord, and the provider of a surety. Landlords often take security deposits from tenants in order to safeguard against rental defaults.
Landlords often face issues due to tenants who default. Rental bonds are what ensure security and extensive coverage for landlords as compared to conventional security deposits. The rental bond guarantor/surety provider/company ensures underwriting services for the tenants, issuing bonds once the tenant proves his/her credibility. The bond will pay the due amount in case of any default by the tenant. Thereafter, the company will collect this pending amount from the defaulter.
Bond rentals or rental bonds are often seen in real estate sectors today. The security deposit is paid at the beginning and the guarantor/surety provider offers the bond guarantee thereafter.
