Landlord Won’t Return Your Security Deposit: What to Do
What is a Security Deposit?
The payment of a security deposit to a landlord is typically required of tenants when renting property and entering into a tenancy agreement.
In Singapore, security deposits are around 1-2 months’ rent for most residential tenancies. The landlord can use the security deposit for whatever purposes are stated in the tenancy agreement, usually to offset any losses caused by the tenant’s breach of the tenancy agreement and/or damage to the property.
When the rental period expires, the security deposit is refunded to the tenant (minus any deductions).
How is a security deposit different from a good faith deposit?
A security deposit is distinct from a good faith deposit, which is merely to reserve a particular property for the prospective tenant paying it until a formal tenancy agreement can be signed.
How Much Will the Security Deposit be?
It is up to the tenant and the landlord to negotiate an amount of a security deposit that is acceptable to them both.
However, as mentioned above, it is customary to have a security deposit of an amount equivalent to 1-2 months rent in Singapore.
When is the Security Deposit Payable?
The security deposit is usually payable either at the time the tenancy agreement is entered into or at the time the tenancy commences, as the parties may agree.
What Can the Security Deposit be Used For?
Offset unpaid rent at the end of the tenancy
A landlord could use a security deposit to offset any unpaid rent at the end of the tenancy.
However, it would be a breach of contract for a tenant to intentionally withhold payment of rent towards the end of the tenancy to force a landlord to rely on the security deposit for payment.
This would likely give the landlord grounds to commence legal action against the tenant from breach of contract.
Nevertheless, the landlord would have to show some proof of damage when commencing legal action against the tenant.
For example, damage to property where the cost of repair could not be deducted from the security deposit because it was all used to cover the unpaid rent.
If there is no damage to property and no other legitimate reason to deduct any amount from the security deposit, then there may be some scenarios in which it may be advisable for tenants to breach the tenancy agreement by withholding the last month of rent.
An example of such a scenario would be where the landlord has a demonstrated track record of dishonesty and there are reasonable grounds to believe he has no intention of returning the security deposit regardless of the condition of the property at the end of the tenancy.
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Can the security deposit be used to cover ordinary wear and tear?
There generally should be no deductions from a security deposit for ordinary wear and tear.
This includes reasonable fraying of rugs or small scuffs on the wall and accordingly, things like routine repainting of walls should not be borne by the tenant’s security deposit.
This is unless the tenant has actually damaged the wall in some way that would exceed reasonable wear and tear.
When Should the Landlord Return My Security Deposit?
The security deposit, less any appropriate deductions, should usually be returned within a reasonable time following the termination of the tenancy, subject to the terms of the tenancy agreement.
A 7-day, 14-day or 30-day period after the termination of the tenancy, to allow the landlord to assess the cost of any repairs that may be required by the tenants’ actions or omissions, would not be unusual.
It is advisable to include a clause in the tenancy agreement setting a firm deadline for the refund of the security deposit.
Landlord Not Returning the Security Deposit: What to Do
There have been cases in Singapore of landlords not returning their tenants’ security deposits within the period stated in the tenancy agreement. The landlord should not be entitled to do this if you have fully adhered to the terms in the tenancy agreement.
If your landlord refuses to return your security deposit, ask the landlord to substantiate his decision. If he refuses to do so, consider sending a letter of demand. As a last resort, you may file a claim in the Small Claims Tribunals.
Read on for more information on each step:
1. Ask the landlord to substantiate his decision
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
If the landlord refuses to substantiate his decision to withhold your security deposit, engage a lawyer to send a letter of demand, which can often be a quick and relatively affordable way to recover 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.
A letter of demand from a lawyer is often all that is required to dispense with that misconception.
3. File a claim with the Small Claims Tribunals
If sending a letter of demand doesn’t work, or if you can’t afford to engage a lawyer to send a letter of demand, you can file a claim with the Small Claims Tribunals by yourself for a nominal fee if your security deposit amount is not more than S$20,000.
If your security deposit has been wrongfully withheld, the tribunal will usually order the landlord to refund it. However, if the tribunal makes the wrong decision, its decision is not subject to appeal except on a few technical grounds.
You also need to be physically present in Singapore to take this route.
Otherwise, you will need to engage a lawyer to file your claim in the Magistrate’s Court instead. Depending on the amount of your security deposit, this may not be economically feasible.
Read our other article on filing a claim with the Small Claims Tribunals.
What Can I Do to Safeguard My Security Deposit?
Prevention is better than cure. Hence, at the time the tenancy agreement is entered into, tenants should take the following steps to ensure that their security deposits will be returned:
- Review the tenancy agreement. Ensure that the circumstances in which the security deposit can be retained are clearly set out and agreeable to you. This includes specifying a deadline after the termination of the tenancy for the return of the security deposit, in the tenancy agreement. If the circumstances for the retaining of the security deposit are not agreeable to you, propose amendments and do not sign unless the landlord amends accordingly.
- Ideally, the landlord should provide a detailed inventory of all the furniture or other items in the property. This is so that he cannot later claim that there were other items which have now gone missing and must be replaced using your security deposit.
- Upon inspecting the property, take note of any existing damage. Take photographs and/or videos and have the landlord acknowledge in writing that this damage pre-dated your tenancy. This will preclude the landlord from later claiming that you caused this damage and that the cost of rectifying it must therefore be deducted from your security deposit.
- Avoid breaching the terms of the tenancy agreement and avoid damaging the property.
- If you have good reason to believe that the landlord wrongfully intends to withhold your security deposit, withhold the last month’s rent to offset your future loss. However, be aware that such withholding could also cause you to breach the tenancy agreement, and give the landlord the right to commence legal action against you or re-enter the premises for non-payment of rent.
If your landlord is withholding your security deposit, read the clauses of your tenancy agreement carefully to understand both your and your landlord’s rights and obligations under the agreement before deciding what to do next. If in doubt, consult a lawyer.
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