Struggling to reclaim your rental security deposit back from your landlord?
Here is my guide on how to prevent any potential conflict between tenants and landlords regarding the refund of security deposit. Before signing any tenancy agreement, it is important to use a proper letter of intent so initial mutual understanding is reached.
The purpose of the security deposit is basically collateral put up by the tenant. When the landlord incurs financial loss, due to the tenant’s actions, the security deposit can be utilised to off-set or recover said losses. Examples of the potential loss incurred by the landlord include,
- Failure to pay rent
- Damages to the rented property
- Damages to furniture and appliances
- Ending lease prematurely
Such a process can be costly and time-consuming, especially if the tenant is no longer around. As a result, it is a common practice for landlords to hold security from his tenant, to ensure that the tenant performs the lease.
Security Deposit In Tenancy Agreement
Terms and conditions of the security deposit clause are crucial to ensure unbiasedness in the utility of security deposit. Here is an extract from a tenancy agreement that details this.
“The Tenant agrees to pay to the Landlord immediately upon the signing of this Agreement a deposit as security for the due performance and observance of the terms and conditions of this Agreement (the “Deposit”). If the Tenant fails to perform and/or comply with any of the conditions of this Agreement, then, the Landlord shall be entitled to deduct such amount from the Deposit as is reasonable to remedy the breach, provided always that the Landlord shall not make any deduction unless it has first given written notice to the Tenant to remedy the breach and the Tenant has failed to do so within fourteen (14) days from the service of such written notice or within a period as may be agreed between the Landlord and the Tenant. The Deposit or such balance thereof after deduction shall be refunded without interest to the Tenant when the Term expires or is terminated. The Deposit shall not be utilized by the Tenant to set off any rent payable under this Agreement.“
- If the Tenant fails to perform and/or comply with any of the conditions of this Agreement, then, the Landlord shall be entitled to deduct such amount from the Deposit as is reasonable to remedy the breach.This covers landlord from cost incurred by actions caused directly by the tenant such as damaging the landlord’s property.
- Landlord shall not make any deduction unless it has first given written notice to the Tenant to remedy the breach and the Tenant has failed to do so within fourteen (14) days from the service of such written notice or within a period as may be agreed between the Landlord and the Tenant.This part requires the landlord to inform the tenant with great detail by way of notice such as messages exchanged, on what is the cause for the deduction.
- The Deposit shall not be utilized by the Tenant to set off any rent payable under this Agreement.Landlords are to take note that the security deposit can not be utilised for the final month of rental payment. This ensures that deposit will be refunded only after mutual assessment of the property to which both parties come to the mutual agreement on the condition.
The biggest fear that any tenant will have, is that their deposit will be deducted or forfeited. This is why it is so important that everything has to be examined before you sign the dotted line. One way to ensure that your security deposit will not be wrongfully deducted for any reason is to take as many photos and videos of the entire house during handover. Be sure to attach the photos along with the inventory list so the condition of the particular item is remarked.
💡 Pro tip: If you do not wish to put down a security deposit from your own pocket. You may want to contact me as I have a solution for you which only requires a flat fee which is just a fraction of the security deposit.
Remedies for non-refund of the security deposit
1. Ask the landlord for proof
If your landlord refuses to return your security deposit, ask him to provide his reasons in writing and to substantiate any deductions with receipts or invoices for repairs.
2. Send a letter of demand
Engage a lawyer to write to the landlord for demanding the swift return of your deposit. A letter of demand will set out a list of demands for the landlord to comply with, or legal action will be commenced. Many landlords assume that tenants, particularly foreign residents who may be leaving the country, don’t know their rights and/or do not have the know-how to enforce them.
3. File a claim with the Small Claims Tribunals
If sending a letter of demand doesn’t work, or if you are still in Singapore but can’t afford to engage a lawyer to send a letter of demand, you can file a claim with the Small Claims Tribunals for a nominal fee if your security deposit is less than S$10,000. If your security deposit has been wrongfully withheld, the tribunal will usually order the landlord to refund it.
Thinking about renting a property but do not wish to put down a hefty security deposit? Contact our team at Lovelyhomes. We have a solution for you!
If you still have unanswered questions or want to know how to recover your security deposit, feel free to contact us. Our team at Lovelyhomes is committed to assisting homeowners with all their real estate needs, we are dedicated to providing you with the highest level of service as we value you, our lovely clients!