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Damages and the Deposit

Here’s a scenario that many a landlord knows only too well. Your faithful tenant of several years has finally decided to move on to greener pastures. You’re a tad dismayed at the news. Finding a tenant who pays their rental on time, in full, every month is no easy feat. But you comfort yourself in the knowledge that you can finally increase the rental to what you feel is a more market-related level. The end of the month falls rather inconveniently during the week, and you’re running ragged at work. So you arrange for the tenant to drop off the keys at your office once they’ve cleared out. And you make a note in your mental diary to go see the property over the weekend.

The weekend rolls around and you find yourself rather excited. You haven’t seen the property in a couple of years, so you’re intrigued to see what it looks like. You’re also eagerly anticipating the nice, fat increase that you want to apply to the rental.

Plus, you’re being plagued by your ex-tenant for the return of the deposit. Money that you spent days after it was paid to you. You’re praying that you’ll find a new occupant asap, so that you can use the new tenant’s deposit to pay the old tenant back.

Your mood changes the moment you step inside the property.

The first thing that hits you is the smell of cat urine – those carpets are going to have to be replaced. How the light fitting got broken is anyone’s guess. The cracked shelves in the bedroom look like someone used them as a make-shift ladder to reach the top of the cupboard. From the look of the broken window pane someone hit a 6 in their game of garden cricket. And is that a fist that created that hole in the back of the bedroom door?

Amongst the turmoil of emotions as you drive home one thing is crystal clear. Your good-for-nothing tenant is not getting their deposit back.

If you’re this landlord, you may want to rethink this decision. Questionable though your tenant may have been, your actions could well have scuppered your rights to that deposit.

According to the Rental Housing Act the landlord must meet the tenant, on the day of termination or within three days before, to conduct a joint inspection of the property. After completing the inspection, the landlord can deduct any damages from the deposit. But if the landlord fails to do this joint end-of-lease inspection? Then the landlord forfeits any right in the deposit. And must repay the tenant their deposit, in full, within 7 days after the end of the lease. If you don’t? Well then, brace yourself for the wrath of the Rental Tribunal. Which is where your good-for-nothing tenant is no doubt headed the moment you deliver the bad news.

What can you do in this situation? You can look forward. By making sure that you do things differently with your next tenant. Including your Tenant Application forms, Lease Agreement, pre-lease inspection, regular property inspections. Not to mention that rather important end-of-lease inspection if you intend to deduct damages from the tenant’s deposit.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.