Expert Tips to Get Your Rental Deposit Back
Because of the economic fallout caused by the Covid-19 induced lockdowns, many tenants are being forced to move to cheaper homes, and are looking to free up their full deposits in order to secure their next lease. Apart from unpaid rent and damage to the property, are there any other valid reasons for a landlord or agent to make deductions off a tenant’s security deposit? Ben Shaw, CEO of digital rental specialist HouseME, delves into circumstances that could affect the return of your full deposit, and what to do if your landlord refuses to refund you.
Many tenants are unaware that interest on their security deposit is due to them, and that the landlord or agent is obliged by law to hold their deposit in a separate interest-bearing trust account. If there are no claims on the deposit, the full deposit plus interest must be returned to you within seven days of the lease expiring.
If there are claims, the landlord must return the balance (if any) of the deposit within 14 days of the lease expiring, and these claims can generally be grouped as: moneys still owed to the landlord in terms of the lease, or damages to the property that goes beyond normal wear and tear.
Fees and arrears
Have you paid your rent and utilities in full and on time?
If the answer is no, then your landlord or rental agent can charge you for missing payments on rent or utilities and deduct this from your security deposit. These charges can include banking fees from failed debit orders, or the cost of issuing a letter of demand where applicable. Your lease is likely to explicitly state what these are, so there shouldn’t be any surprises.
Have you cancelled your lease agreement early?
One thing this pandemic has taught all of us is that a lot can change in 12 months. You may have signed a fixed-term lease and now need to cancel it. However, when a tenant cancels early, this cancellation is subject to a reasonable cancellation fee which is usually the equivalent of one or two full months’ rent.
Does your lease agreement mention a deposit administration fee?
Some lease agreements specify a deposit administration fee. This is a fee agents can charge to hold your security deposit. The deposit administration fee can be in the form of a monthly or once-off fee which becomes deductible from your security deposit. However, it is seldom higher than the interest earned.
If after the mutual outgoing inspection, your landlord wishes to claim for damages, he or she is required to present invoices for the monies held back. Claims regarding damages are often where landlords and tenants don’t see eye to eye. If your landlord refuses to refund your deposit, these tips may help you get it back:
Have a look at the clause in your lease agreement regarding your security deposit.
This clause should specify permissible deductions, so familiarise yourself with these and be prepared ahead of negotiations.
Attend your outgoing inspection.
This is a great opportunity for the landlord to point out any damages that you’re liable for, and for you to negotiate if that’s not reasonable. Compare those damages to the ingoing snag list if you are disputing any claims.
Have an honest and open discussion.
If you’ve had a great relationship with your landlord for the duration of your lease, sometimes an open and honest conversation about any invoices and deductions that you are not in agreement with can help you reach an amicable settlement.
As a final recourse, approach The Rental Housing Tribunal
The tribunal provides a free service to tenants and landlords in South Africa, and its main function is to settle disputes between tenants and landlords.
And finally, some advice on how to minimise your chances of being in the same position again:
When formalising your next lease, consider signing up for HouseME’s DepositFREE product. Now especially, many tenants do not have two months’ security deposit at the ready. DepositFREE allows tenants to pay a little extra on their rent each month, in exchange for not needing to put down a deposit at all.
Document the condition of your new home in detail at the time of occupation. Your ingoing inspection is just as important as your outgoing inspection. It is essential that both landlord and tenant agree on the condition of the property at the date of occupation. Note every fault in writing, no matter how trivial it may seem. Back this up with photographs or a video of the damages or problem areas, and supply the landlord or agent with a copy of the snag list as well as the photographic evidence. Now is also a good time to check with the landlord or agent that your deposit will be held in an interest-bearing trust account.