adminA rental security deposit is money that is usually paid by a tenant that is equivalent to one or two months’ rent but can be much more depending on type of property involved, frequency of rental payment and terms agreed.
It is usually paid when the landlord and tenant sign the lease. In many countries the landlord must place the funds in an escrow account and give the tenant any interest generated by such funds.
Upon the termination of the lease, the landlord must return the security deposit to the tenant if no violations of the lease occurred.
The landlord, however, may keep the security deposit or portion of it if the tenant damages the property. The property owners will, however, be entitled to keep the deposit or part of it if they can prove that the tenant is responsible for the damages. The deposit should also be withheld according to the terms of the lease.
The deposit is supposed to cover the expenses of any repairs of damages to the premises greater than normal “wear and tear”.
The security deposit must be returned within a short time (varying by country /province or state) after the tenant vacates, less the cost of repairing any unusual damage.
Unfortunately, for tenants these damages are usually subject to the judgment of the landlord, who may desire to paint and refinish on the tenant’s money, and is thus, resulting in many small claims suits.
In a few jurisdictions the security deposit must be kept in a separate bank account, and some states require payment of interest on the amount held as a deposit.
A security deposit is sometimes confused with a deposit of the “last month’s rent”, which may be credited to the tenant for the final month’s rent. A security deposit cannot be used legally as a rent credit.
To facilitate return of the deposit, the tenant has to make a list of damages and necessary cleaning on the day you move in, with copies for both you and the landlord.
If the full deposit is not refunded, the landlord is required by law to provide a written statement within 30 days (or up to 60 days if stipulated in the lease) explaining the reason for any portion withheld.
If a landlord does not comply with the law, the tenant may take legal action. A tenant should normally take good care of property as if its their own.
A landlord cannot keep the security deposit to cover normal wear and tear. Thus, a landlord cannot charge you for normal cleaning if the apartment or house is left in as good or better condition than first occupied.
A landlord can keep all or part of the security deposit to cover damage caused by the tenant’s negligence, carelessness or intentional abuse of the rental property.
A landlord must prove the amount of the damage to the apartment/house and that it was caused by you or your friends. A landlord cannot keep the security deposit and make you prove that you should get it back. The burden is on the landlord to return the deposit or prove the right to keep it.
Inspection when moving in
A tenant should keep a receipt for any deposit paid. It should indicate how much of the first payment applies to the first month’s rent and how much is actual damage or security deposit. On the day that the tenant moves in they should list any existing damages and necessary cleaning, preferably with the landlord or apartment manager present.
Not only will this help when you move out, but it lets the landlord know of repairs needed in the apartment. Give one copy of the damage sheet to the landlord, or send it by certified mail.
Keep one copy. If possible, have all copies signed by both the tenant and landlord. You can use your phone and take video or pictures of anything that is damaged and date them. Save the photos for when you move out.
Inspection when moving out
Under Colorado security deposit law, the landlord is required to send a written statement of damages, along with any security deposit refund, to the renter’s last known address.
Therefore, it is important that you furnish the landlord with a forwarding address. Also file a change of address form with the local post office.
Give the landlord proper written notice of intent to move out within the time specified in the lease. If no time is specified in the lease, notice must be given within the time specified by law.
In a month-to-month lease, unless otherwise specified, written notice must be given to the landlord 10 days before the end of the month.
Inspect the premises on the day you move out. You may want to have a neutral party witness the condition the house or apartment was left in.
Photos or videos should be taken of the apartment condition when the renter moves out, noting the condition at move-out time. Return of the deposit
When you leave an apartment, the landlord has one month (unless a longer period of time, not to exceed 60 days, is stipulated in the lease) to send to your last known address the full amount of the security deposit or a written list of the damages and the amount of money needed for repairs. If the deposit is larger than the amount required for repairs, the landlord must return the excess.
Retrieving unreturned deposits
If the landlord does not comply with the law and fails to refund the deposit within one month (or up to 60 days if stipulated in the lease), or withholds any portion for normal wear and tear, or if you consider the reasons for withholding invalid and wish to pursue the matter, you can take legal steps.
When you leave an apartment, the landlord has one month (unless a longer period of time, not to exceed 60 days, is stipulated in the lease) to send to your last known address the full amount of the security deposit or a written list of the damages caused by the tenant and the amount of money needed for repairs.
If you pursue the matter without a lawyer, check the rental agreement with the landlord or realtor to see what liabilities might incur should you lose the suit.
The renter must decide if it is worth costs of up to US$100 to retrieve their deposit. The small claims courts are informal courts where people can sue for up to US$7 500 without being represented by a lawyer.
These courts are a division of the county courts with a judge or magistrate that presides. Small claims hearings are designed to be quick and relaxed and provide people with an inexpensive method to settle minor claims.
In England and Wales, if you rent your home on an assured short-hold tenancy that started after April 6, 2007, your landlord must place your deposit in one of the following tenancy deposit protection (TDP) schemes: the Deposit Protection Service (Custodial and Insured) or My Deposits or the Tenancy Deposit Scheme. Capita Tenancy Deposit Protection no longer accepts new deposits and is closing on September 13, 2014.
These government-backed schemes ensure you will get your deposit back if you meet the terms of your tenancy agreement, do not damage the property and if you pay your rent and bills.
Disclaimer
GMRI Real Estate is a property holding division of GMRI Capital which owns, manages, develops and leases out its own property. We do not act as agents for the public or third parties.
This article is provided “as is” for informational purposes only as a public service, not intended for trading purposes or advice. Prior to execution of any property/real estate trade, you are advised to consult your authorised financial advisor/real estate agent to verify the accuracy of all information. Neither GMRI Real Estate nor any independent provider is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Contact: Facebook; http://www.facebook.com/GMRICAPITAL Twitter; @capital_gmri: Skype: gilbert.muponda
Online Reporter