Rental deposits are one of those sticky topics between landlords and renters. What can and cannot be deducted.  The problem comes with this “wear and tear” statement, what determines how much wear and tear is acceptable and what should be considered excessive. As such I thought its about time for us to try and analyse this problem and find a logical and responsible solution to this Rental Deposit situation.

1.  Create a Clean Slate

It is essential that you (landlord) and your tenant do a full joint inspection of the property before and after the tenant moved in.  This will be the start to a clean slate, I urge all Landlords and Tenants to take photos and videos. Remember to save them for your move out date, otherwise there was no point in conducting the joint inspection in the first place. The photos and videos are  purely to be able to make a fair  comparison as well as to give proof of the conditions before and after.

Landlords I suggest you get yourself a flash drive and save all the photos of each tenant on the disk.  This way if your laptop gets stolen or formatted you aren’t at a risk of losing these photos – which is in the end your only recourse if things goes bad.

If you as landlord miss this joint inspection once the tenants moved out, you are thusly confirming that the property is in good order and that  no deposit deductions will be made.  It is for this reason that landlords should always commit to the inspection before and after.
If you want to be all IT about it you can always save it to the cloud.
Landlords have 7 days after the tenant has moved out to confirm this joint inspection.

2. Manage the Rental Deposit fund

Tenants always complain that landlords never return their rental deposit as they should, never mind actually getting the interest on their rental deposit.  Sadly this is true, I remember when I still rented I hardly got my deposit back, never mind in full and I never even asked for the interest.

This is an area in which South African Landlords should improve, stop making your tenants fear if they will ever see any of the rental deposit back.  Instead be upfront and honest about your actions with their rental deposit.

Be legal and keep yourself from getting into any legal trouble.

Landlords need to be aware that they have to place the deposit money into a interest bearing account – meaning it needs to earn interest.  Your tenant has the full right to ask for the interest amount at anytime, as such just go open an account and keep the money separate.  Don’t think about it, don’t use it for personal issues, just leave it until you need it.

3. Typical deductions from the Rental Deposit

These are generally allowed to be deducted from the rental deposit, as they go beyond normal wear and tear.

  • Excessive holes in walls
  • Sticky cabinets and interiors
  • Broken tiles or fixtures in bathrooms
  • Clogged Drains and Toilets due to misuse – Pads, Nappies and Tampons
  • Broken walls
  • Removing paint, painted by the tenant
  • Tears, holes or burn marks on carpets, curtains or wooden floors
  • Animal stains in the carpet caused by domestic animals or leaking fish tanks
  • Broken windows and window screens
  • Broken doors and locks
  • Broken appliances due to negligence
  • Excessive filth in over or on stove by burners
  • Broken or missing window blinds
  • Flea and pest extermination
  • Excessive mildew and mold in bathroom
  • Excessively filthy bathtub, shower, sink, mirrors or toilet
  • Missing outlet covers.
  • Missing or damaged smoke or carbon monoxide detectors.
  • Cracked kitchen or bathroom countertop.
  • Broken bathroom vanity.
  • Keys not returned at end of tenancy.
  • Any missed payments of rent and utilities

4.  Normal Wear and Tear to a Rental Deposit

These items are considered in the realm of normal wear and tear, thus you as landlord may not deduct these items from the rental deposit.

  • Faded paint or wallpaper due to sunlight
  • Broken plumbing caused by normal use
  • Dirty blinds and curtains
  • Rug wear caused by normal use
  • A few small stains on the carpet.
  • Furniture marks in carpet
  • Warped doors caused by age, temperature or moisture
  • Warped windows caused by the flow of the glass
  • Dents in walls from door handles
  • Broken appliances, if not from misuse
  • Dusting
  • Faded curtains
  • Broken lightbulbs
  • Replacement batteries for smoke detectors
  • A few small nail holes in the walls from hanging pictures.
  • A small amount of mildew forming in grout lines in the shower tiles.
  • Dirty grout.
  • Tarnish on bathroom fixtures.
  • Loose handles or doors on kitchen or bathroom cabinets.

The general rule of thumb is that a landlord can make pro-rated cost deductions if an item’s life span has been shorten excessively for the time period of the lease, meaning the wear and tear is excessive.

The landlord should consider:

  • how old the item were,
  • how long it would have lasted with normal wear and tear and
  • the actual cost of replacing the item.

An Example from Property 24:

“For example, if a tenant has damaged beyond repair an eight-year-old carpet that had a life expectancy of ten years and would cost R 1 000 to replace, then the landlord could charge only R200 for the two years’ worth of life (use) that would have remained in the carpet had it not been damaged.”

R 1000 / 10 Years – R 100 per Year
10 – 8 years = 2 Years
R 100 * 2 Years = R 200

Landlords are allowed to deduct a cleaning fee, however this does not imply that you as landlord may use a tenants rental deposit in preparation for your next tenant – washing carpets and curtains don’t fall part of this.

Items that fall within the “cleaning deduction’ realm:

  • eliminating flea infestations left behind by the tenant’s pets
  • oven cleaning
  • removing decals from walls or windows
  • removing mildew in bathrooms
  • defrosting the refrigerator
  • Cleaning does not mean repair.
  • Landlords needs to be reasonable.
  • What is the actual cost of a cleaning lady for the day?

Repaint formula/principle:

The matter of Re-Painting is always a difficult one too.  However we have an answer there is a formula – who knew….

Lets say you had a tenant who rented your rental unit for 1 year.  Before the tenant moved in the unit was newly painted, expecting the newly painted interior walls to last for 3 years. However in present day the tenant moves out and you realise you will have to repaint again, in preparation of your new tenant.

How Much can you deduct from the rental deposit?

The Calculation:

3 years – 1 year = 2 years

The tenant has to pay two thirds of the cost that you will have to endure to repaint the unit.  This includes the labour, the time it takes from you and also the material cost.

Consider our, Should tenants paint article.

Basically you will calculate the repainting similarly to the carpet example.  How long should it have lasted, how long would it still have lasted and what is the difference fundamentally between these numbers.  That is the number you may deduct from the rental deposit.

5. Paying back the Rental Deposit

If you have no repairs to make to the property the rental deposit must be paid back within 7 days.

If you have some repairs, then you will have 14 days to repay the rental deposit.

If the tenant refuses to have a joint inspection of the property, the landlord will have the right to pay the rental deposit back within 21 days after the expiration date of the Lease Agreement.

A 30 day pay-back period of the deposit is illegal, even if it is stipulated within the contract.

As such you have 3 options:

 

  • No Repairs – 7 days to return the deposit
  • Some repairs – 14 days to return the deposit
  • Tenant never committed to the joined inspection – 21 days to return the deposit
Once the landlord returns the rental deposit (or parts of it) the landlord must do so with a written letter and Receipts/quotes of any repairs.

If the repairs exceed the deposit, the landlord has the right to ask the tenant (now previous tenant) to pay the outstanding amount.  If the tenant refuses, then the landlord has the right to take legal action.

Asking for the repairs exceeding the rental deposit as well as any legal cost endured in order to obtain the required amount.

The rental deposit debacle will always be a sticky one, your tenant felt they were good to your place and you as landlord feel they partied on all night.  The best advice I can give you is take many photos before and after the tenant moves in and out.  Keep all your receipts and get the quotes.

The landlord and tenant relationship is nothing other than a normal business transaction, treat it as such and you should be fine as a landlord or tenant.  If you still have a particular problem with your rental unit then consider contacting Mafadi for some assistance – this is after all what we do:)

Written by Lizl Brink, Lizl is copywriter and designer based in Johannesburg, she is also a frequent contributor to the Mafadi blog, and as an Urban investor and rejuvenation shares a passion for urban regeneration, go check out her personal portfolio here
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