can the security deposit in a rental be cashed

Can the security deposit in a rental be cashed?

The security deposit is given by the tenant to the landlord on the day they move into the property and is returned by the landlord when the tenant leaves. Between these two dates, what happens to the money in question?


The security deposit is an important element in maintaining trust between a tenant and their landlord. It provides the landlord with a financial leverage in case of damages caused by the tenant.


Many questions arise about how the security deposit is paid to the landlord and how they should keep the sum. Other questions arise when the tenant leaves the property, regarding the return of the amount and the portion that the landlord is allowed to keep.


What is the security deposit?


The security deposit is an amount given by the tenant to their landlord when signing the rental agreement (also called a lease). This amount, which represents one or two months' rent depending on the case, is intended to be returned, in whole or in part, to the tenant when they leave the property. The amount refunded will depend on the exit inspection and the estimated amount for repairs in case of damage.


The term "caution" or "caution check" is often mistakenly used to refer to the security deposit. Caution refers to the guarantees given by the tenant to their landlord, such as using a guarantor. The term "caution" is also often used to describe the guarantor, which can be confusing. That's why it's preferable to stick to the term "security deposit."


In which cases can the security deposit not be requested?


The security deposit is requested on the day the lease is signed by the landlord or the real estate agency if applicable. This is usually the day the tenant moves into the property after completing the entry inspection with the landlord or their representative. This day is also called the key handover day.


The landlord or agency can require a security deposit from a tenant in many situations, except if the rental goes through a mobility lease. This short-term rental contract (from one to ten months) is not renewable and is guaranteed by the Visale guarantee. It was introduced to facilitate access to housing for people in a situation of mobility and, in particular, to avoid excessive installation costs. That's why the security deposit has been excluded.


The security deposit cannot be requested either when rents are paid quarterly (instead of monthly). Since the amount to be paid upfront is significant, the security deposit becomes redundant.


Should the security deposit be renewed when a lease is extended?


The security deposit that the tenant has paid to the landlord or the real estate agent on the day of the key handover remains unchanged throughout the occupation of the property. The amount remains in the hands of the landlord when the lease is extended. The law does not allow the landlord to request an additional amount even if rents have increased since the first day of the rental.


Can the security deposit in a rental be cashed?


The security deposit is usually paid by the tenant to the landlord or the real estate agency in the form of a check. Today, wire transfers are much more commonly used. The tenant also has the option of making a cash payment, after which the landlord or the real estate agency must issue a receipt.


If it is a check or cash, the landlord can cash the amount of the security deposit into a current account. However, the law does not allow them to earn interest on this sum. The check must be cashed within six months of the issue date. 


When is the security deposit returned?


The security deposit is returned by the landlord to the tenant when the latter leaves the property. The amount returned is assessed based on the exit inspection report. If it mentions damages, the landlord can withhold an amount corresponding to the estimated cost of repair work.


Security deposit and repair work


Of course, it is not the landlord who roughly estimates the cost of the work to be done. When damages are recognized, the landlord requests quotes from professionals. They then present the best quote to the tenant by registered letter to justify the amount to be deducted from the security deposit.


Security deposit and unpaid rent


The landlord may also retain all or part of the security deposit in cases where the tenant owes unpaid or late rent. However, the departing tenant should not justify non-payment of their last rents by the security deposit. Any non-payment of rent that has not been authorized by the court remains outside the law.


Security deposit and charge adjustment


In the case of a condominium, the landlord is allowed to retain 20% of the security deposit. This amount will be used for the provision of charge adjustment, usually calculated at a specific time of the year. Once the accounts are settled, the landlord commits to returning any unused amount to the tenant.


What are the deadlines for returning the security deposit?


The landlord has a one-month period from the tenant's departure date to return the portion of the security deposit they owe. This period is extended by an additional month in case of damage, to allow time for the quote procedure.


If the landlord exceeds the allotted time, the tenant has the right to put the landlord on notice by sending a registered letter with acknowledgment of receipt and request compensation equivalent to 10% of the rent excluding charges for each month of delay.


The tenant must ensure that they have provided their new address and contact details to their former landlord.

In case of dispute, the tenant or the landlord must contact the CDC, the departmental conciliation commission, or a justice conciliator. It will then be up to the judge of protection disputes to take over if the conciliation has failed.


To learn more, visit the dedicated page on security deposits in a residential lease on the Public Service website.


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