You want the landlord to use the lease bond for the rent due this month

The security looks like money already available

A hypothetical trade business cannot meet its yard rent and asks the landlord to take the amount from the bond. The owner assumes that will clear the problem for the month. Review the lease and obtain advice before relying on the proposal. Security held under a lease is not simply another business bank account the tenant can direct at will.

Identify what security was provided

Find the lease and the record of any cash deposit, guarantee or other security arrangement. Confirm the amount, parties and relevant terms. Do not assume an accounting entry labelled bond means the landlord holds cash that can be applied in the way proposed. Ask the adviser to explain any uncertainty about the form of security.

Check the agreement and proposed change

Business.gov.au recommends clear contractual payment obligations and written agreement to changes. Ask the lawyer how the lease addresses use of security and any obligation to replace or replenish it. This article does not establish a right to apply a bond to rent or prescribe the landlord's powers. The actual lease and applicable rules require assessment.

Source: business.gov.au: Prepare a contract

Model the consequence beyond this month

In the hypothetical example, a proposal may require the business to restore security later while continuing to pay rent. Include the confirmed or proposed amounts separately in the forecast. Label unagreed terms clearly. Do not present the arrangement as a permanent saving if it merely changes when the business must find the same money.

Seek a clear response

Put the advised proposal through the appropriate channel and ask for its scope and effect to be confirmed. Keep a request separate from an accepted arrangement and from evidence that security has actually been applied. If a default notice is involved, obtain advice about it promptly rather than assuming a discussion about the bond changes the notice position.

Reconcile the outcome

Once the position is confirmed, ask accounts to record the rent and security balances correctly and retain the supporting documents. CRP can help assess whether the premises remain affordable. The useful decision is whether the proposed arrangement produces a workable, understood cash sequence, rather than treating existing lease security as an automatic rent payment.