Security deposit for a flat – what is it and how much is it?

I want to rent out a flat for a fixed term, but I am afraid of the losses a badly chosen tenant could cause. In such a situation, the security deposit for a flat is one of the first protective mechanisms used by property owners. How does a security deposit for a flat work, and how much can it be?

• Security under a lease agreement
• How much can the deposit for renting a flat be?
• The difference between damage to a flat and normal wear and tear

Security under a lease agreement

Concluding a lease agreement may be made conditional on the tenant paying an appropriate security deposit, as confirmed by a provision of the Act on the Protection of Tenants' Rights (ustawa o ochronie praw lokatorów). Information about the required deposit should be included in the lease agreement, and proof of its payment by the tenant should be documented by a statement signed by the landlord.

What does a security deposit for a flat actually secure? Its main purpose is to secure the landlord's claims arising from the flat lease agreement. The property owner may use the deposit to cover obligations such as arrears of rent or those resulting from damage to, or deterioration of, items in the flat.

The landlord may use the deposit to cover so-called charges independent of the owner, which include fees for waste collection or sewage disposal.

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How much can the deposit for renting a flat be?

It should be remembered that, according to the wording of the act, the security deposit for a flat may not exceed twelve times the monthly rent for the premises concerned. Is the deposit non-refundable? No! In the Act on the Protection of Tenants' Rights we read:

The deposit is refundable within a month of the date on which the premises are vacated or the tenant acquires ownership of them, after deduction of the landlord's claims arising from the lease of the premises.

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The difference between damage to a flat and normal wear and tear

A property owner wants to protect themselves against all kinds of situations, and the presence of a deposit in a lease agreement is nothing new on today's property market. There are tenants whose stay in the premises is "turbulent". In such cases the deposit may be the only lifeline for the owner of the premises, who can use it to cover any damage.

How do you tell damage to a flat from normal wear and tear? To avoid problematic situations, before finally concluding the lease agreement it is worth drawing up a handover protocol containing a description of the flat and its appliances. It is worth attaching photos showing the actual state of affairs to such documentation. In this way the person renting the flat will avoid a situation in which the property owner wants to keep the deposit without giving specific reasons. If the tenant uses the flat's furnishings and equipment as intended, they can expect the deposit to be returned at the end of the agreement.

If you are a flat owner and are looking for expert help in selling or renting out your property, make use of the experience of our specialists at REMAX Gold. We will help you prepare the premises properly for sale and make sure all formalities are completed correctly.

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