Security Deposit

A security deposit is a type of insurance for the landlord. When you rent a property you are required to pay a deposit, typically equivalent to between one and three months' basic rent, to the landlord. Should you damage the property, its fixtures or fittings during your tenancy, or fail to pay the rent, this security deposit will be compensation for your landlord. The security deposit will normally have to be paid before you move into the property, or along with the first month's rent. The landlord is required to put this deposit into an interest-earning savings account, and must give the tenant information about the savings account if requested to do so.

Once the rental term has come to an end, the landlord will check that no damage has been caused to the property and then return the security deposit, plus interest, to the tenant. Any damages or outstanding rent payments will first be deducted. Damages which exceed the value of the deposit must be paid by the tenant, but only if the landlord gives notice of the costs involved within six months of the tenant moving out. If the cost of utilities has not yet been calculated when the tenant moves out, the landlord is entitled to retain a portion of the security deposit as insurance until these bills have been paid. Bills must be paid within twelve months, unless there are specific extenuating circumstances.

Remember: It is sensible to agree with the landlord exactly which costs and damages will be covered by the security deposit. In addition, it is important to take photographs of the property when you move in, to create a record of the condition of the property before your rental term began. You should also make a list of any fixtures, fittings and furnishings present in the property when you move in. It is important to protect yourself should a disagreement arise regarding damages to the property or its contents, which you claim were not made during your tenancy.