What is a security deposit?
A security deposit is a sum of money that is paid by a tenant to the landlord usually before a tenancy commences or on the date of commencement of the tenancy. This deposit is held by the landlord and is returned at the end of the tenancy to the tenant, once no rent arrears, bills or charges due or damage beyond wear and tear are outstanding.
How much is a deposit?
There are no legal guidelines as to how much of a deposit a landlord may request, however the normal practice is that one months rent is paid as a security deposit.
When should a security deposit be paid?
A tenant will normally pay a deposit as part of agreeing to rent a property. It is recommended that a tenant only pays a deposit when they are happy with the property and the terms and conditions of the letting and are clear on everyone’s rights and responsibilities. A tenant should avoid paying a deposit in cash and always get a receipt.
Who holds the security deposit?
At the outset of the tenancy it should be clear who is holding the security deposit and who will be responsible to return it at the end of the tenancy. Contact details of the landlord and agent retaining the deposit should also be obtained at the outset of the tenancy. The contact details of a landlord should be provided irrespective of who retains the deposit.
In a situation where an agent is leasing the property on behalf of the landlord, the deposit is normally handed over to the agent. This deposit is usually paid over to the landlord by the agent once the tenancy commences.
When should a deposit to be returned?
A security deposit should be returned once the tenancy ends and the tenancy agreement has been honoured. The deposit does not have to be returned to the tenant on the day they leave the accommodation, however the landlord must return the deposit promptly. Time should be allowed for an inspection at the end of a tenancy, and for any repairs/ cleaning to be carried out.
Reasons why a security deposit may be withheld
By law, a deposit is considered to belong to the tenant but the landlord can establish a right to keep the deposit in the following certain circumstances:
- Rent Arrears
- Damage to the property above normal wear and tear
- Outstanding utility bills and other charges
- If the tenant has not given sufficient notice of termination
Checklist for the return of the security deposit
The following checklist may be useful when returning or seeking the return of a security deposit:
- Has the correct notice of termination been provided in writing?
- Has the rent been paid in full?
- Have meter readings of the utilities been taken and arranged for final payment?
- Have all belongings been removed?
- Has the property been returned in a similar condition in which it was provided apart from normal wear and tear?
- Has the property been cleaned?
- Has the signed-off inventory been checked to ensure that all items are present and not damaged?
- Has all the rubbish been removed?
- Have you taken photographs at the start and end of the tenancy?
To find out more information on security deposits, please click here to download our 'Guide to Security Deposits in Residential Accommodation'.