Security deposit for renting: when paid, when recovered

    "It has long been a practice in the housing rental market to pay both the rent and the same amount of security deposit as soon as you move into the house.

 

    Many "swallow" these costs in the hope that the money paid in advance will still be returned at the end of the lease term, but this is not always the case.

 

    "95% of all rentals are subject to a one-month rental deposit.

 

    That security is usually left with the landlord until the end of the lease. The deposit is refundable if there is no damage to the home. If the damage is done, it is automatically agreed what part of the deposit is left with the homeowner,” - says Tomas Rusakas, a broker at Capital Team.

 

    Do not pay, return?

 

    One of the most frequently asked questions is how the recovery of the deposit is treated. There are usually two options.

 

    The person renting the home simply does not pay the rent for the last month of his or her renting, because he or she has already paid the deposit in principle.

 

    In the second, the landlord still pays the money, and the landlord only refunds the prepaid amount to the tenant when it is certain that no damage has been done to the home when an deed is signed proving that neither party has any claims against each other.

 

    If the damage is not caused during the rental period, the deposit is refunded, if the damage is caused and the deposit is insufficient, the tenant must additionally pay.

 

    "It's different, but I always offer landlords a deposit until the end of the lease. If you rent a very nicely renovated or furnished apartment with a lot of love, a two-month deposit is required,” - says T. Rusakas.

 

    According to him, and the tenant himself, having paid the deposit, is motivated to keep the property, to lease it for an agreed period, to notify the landlord of the moving out in a timely manner.

 

    The deposit is usually refunded upon signing the deed of transfer.

 

    However, the rental market is not always very transparent, fictitious contracts are signed, often not signed at all, and the rent is paid in cash, essentially without any proof that it has been paid.

 

    Better without a trial

 

    Manopinigai.lt has already written that both parties are negotiating differently about the damage caused to the rented housing, but it is best for everyone to avoid court.

 

    Olga Petroševičienė, a partner at the law firm Ellex Valiunas, an expert in real estate market law, says that in legal practice she has had disputes over damage to housing and the return of collateral or even greater damage.

 

    "It was decided that the whole room would have to be repainted, but part of the related costs was also covered by the landlord. The tenant may be wrong, but yes - he made a hole in the wall. We will no longer find such paints, and if we find them, the walls are already worn out and faded from the sun, so it is obvious that if we need to repaint one wall, we will need another one. It also pays off for the landlord, the value of the home will increase, so he will probably have to contribute to the reimbursement of expenses,” - the interlocutor says.

 

    However, she adds that such disputes, which go to court, are of no use to anyone.

 

    How to finish

 

    In any case, when terminating the lease of housing, you need to finish, sign a deed of transfer, so that later, for any reason, there will be no disagreement. It is very important for homeowners to check that all dues have been paid.

 

    "Usually the landlord calls the broker himself and says that he needs to look for a new tenant. Brokers simply send a deed of transfer of the property and the landlord completes it with the tenant. But it can also be done in a free form," - says T. Rusakas.

 

    According to him, there are still cases of disputes, but most of the time there is natural wear and tear.

 

    "If there is already a hole in the wall or something is broken, it is a question of how the damage must be compensated. Depreciation issues are often included in contracts. But if you have been using the home for several years, it is a fact that there will be depreciation and you will not have to compensate for the damage," - the broker adds."