Often confused with a guarantor commitment, it is in fact a sum of money paid by the tenant to the landlord to secure the tenancy. This amount, frozen for the entire duration of the lease, is used to cover any unpaid rent or service charges, as well as repairs for damage to the property.
In this article, we explain everything you need to know about the security deposit, how it works, typical amounts and the rules governing its return.
What is the security deposit?
The security deposit is a sum of money that the tenant hands over to the landlord when the lease is signed. Its main purpose is to protect the landlord against financial risks associated with the tenancy. Unlike a guarantor (a person or organisation that vouches for the tenant), the security deposit is money paid in cash or by cheque.
It is mandatory in most leases for unfurnished properties.
How much is the security deposit?
The amount depends on the type of rental:
- Unfurnished rental: the deposit may not exceed one month’s rent excluding charges.
- Furnished rental: the deposit may be higher, up to two months’ rent excluding charges.
Note: If the tenant pays rent in advance for a period longer than two months (e.g. quarterly rent), the landlord is not entitled to demand a security deposit.
How is the security deposit paid?
The security deposit is usually paid when the lease is signed, though it can also be handed over when the keys are issued. The landlord must give the tenant a receipt acknowledging payment.
Accepted means of payment include cheque, bank transfer or cash (with a receipt).
What is the security deposit for?
The deposit mainly covers:
- Any repairs required for damage noted during the outgoing inventory of fixtures.
The landlord must justify any deduction from the deposit with official documents such as estimates, invoices or photographs of the damage.
Returning the security deposit: what are the rules?
The law strictly regulates the return of the deposit:
- If the outgoing inventory matches the incoming inventory, the landlord must return the deposit within one month after the keys are handed back.
- If damage is found, the period may be extended to two months to allow the landlord to assess repair costs.
The landlord may deduct from the deposit any sums corresponding to justified repairs. In case of late return, the tenant may claim late-payment interest.
Best practices for tenants and landlords
To avoid disputes, it is advisable:
- For tenants: carefully check the incoming and outgoing inventories, keep all evidence in case of disputes, and take out comprehensive home insurance (multirisque habitation, MRH). This insurance is compulsory and protects the tenant against rental risks such as water damage, fire or explosion. It also covers the tenant’s civil liability towards the landlord and third parties.
- For landlords: clearly state in the lease the amount of the security deposit, the conditions of payment and return, and the legal ceilings.
Transparent communication and an accurate inventory are the keys to a smooth refund process.
• And take out comprehensive home insurance (MRH). This insurance is compulsory and protects the tenant against rental risks such as water damage, fire or explosion. It also covers the tenant’s civil liability towards the landlord and third parties.
