What is a Security Deposit?
A security deposit is the money paid by the tenant to the landlord, usually equal to one or two month’s rent, before occupation. The main purpose of a rental deposit is to protect the owner should the tenant violate the terms of the lease agreement by not paying the rent or to cover the cost of any damage to the property caused by the tenant. The deposit is held in an interest-bearing account, or an Estate Agency Affairs Board audited Trust account in the case of an Estate Agent, for the duration of the lease period. When the lease expires the tenant is entitled to a refund of the full amount as well as the interest accrued. However, it’s rare to receive the full deposit if proper care of the property is not taken seriously or if the property is not returned in the same good state as it was received by the tenant at the start of the lease.
What Factors affect the Deposit Refund?
The landlord is permitted to use the deposit to cover rent not paid, the cost of replacing lost keys and remotes, to repair any damage to the property where the tenant is liable and to offset the recovery of any other amounts due to the landlord in terms of the lease.
The condition of the property is the largest contributing factor in determining whether or not the full deposit is refunded after the tenant has vacated. The simplest way to ensure that the full security deposit is refunded is to maintain the condition of the property throughout the lease period. Simply put, a tenant should look after the property as if it were their own, bearing in mind that damage to the home will have to be rectified. The cost of these repairs are deducted from the deposit, and the balance less the repair cost paid back to the tenant after the lease has expired. This can take up to 14 days by law after restoration has taken place – another reason to take proper care of the property, as most tenants use the deposit to secure the lease on a new property and waiting on a deposit refund could cost them the new rental!
How to Protect the Deposit
Should there be obvious issues that require fixing; for example, bulbs needing to be replaced or holes in the walls needing to be filled, it would be more cost- and time-efficient for the tenant to repair them himself, so long as a professional job is done. It’s advisable that those issues are attended to on a regular basis throughout the duration of the lease, and not left up to the last minute. Landlords will often also use professional contractors to do the repairs and maintenance, which will always be much more expensive than the tenant doing it themselves. Tenants are however advised NOT TO attempt to do any specialised work themselves (unless they are actually qualified to do it) such as painting, plumbing or electrical work. This should always be left to a professional.
Tenants should also ensure that the property is clean and tidy when they are ready to vacate, including: carpets, tiles, windows, cupboards and ovens. A little elbow grease can save a lot of money here!
To avoid discrepancies the tenant should be thorough and attentive when completing the entry and exit inspection – this will clarify which party is liable to rectify any damage noted. At the entry inspection, note all issues, especially those that often go unchecked – such as cupboard doors and taps. Thoroughly examine all appliances and double check plug sockets. Ensure that all work properly, and if necessary photograph any defects prior to occupation or as soon as the key-handover has taken place – documenting the snags in this way leaves little room for miscommunication. A fair landlord will allow up to 7 days to report any additional defects not marked on the entry inspection after the tenant has moved in.
To protect their rental deposit a tenant should be comprehensive and thorough during the inspections, and take personal responsibility for the state of the property during their stay. Respecting the landlord’s property throughout the lease period will lay the foundation for a good landlord-tenant relationship and, most importantly, guarantee that the deposit is protected.