Deposit and Expenses Other Than Rent

The amount of the rental deposit (normally, the landlord will require the tenant to pay a deposit equivalent to one to three months’ rent as security deposit) and should be stated in the tenancy agreement. Unless the landlord has prior agreements, the deposit cannot be used to cover rental payments.

Upon termination of the tenancy agreement, the landlord is entitled to deduct from the deposit the amount of rent and fees that remains unpaid by the tenant. The landlord should also state the period of time for the landlord to return the deposit after termination of the tenancy agreement and whether the deposit will be adjusted according to the new rent if the tenancy is renewed. As a landlord, once the deposit is received, a receipt should be issued.

In general, no interest is payable on the deposit kept by the landlord during the period of tenancy unless prior arrangements have been agreed on. The tenant may ask the landlord to accept a bank guarantee in place of a cash deposit.

The tenancy agreement should state clearly which party will be responsible for expenses or fees related to the rental property. Expenses and fees usually include the following:

  • Rates that may be paid by either the landlord or the tenant, so both parties should come to an agreement on this beforehand. If the tenancy agreement does not mention who is responsible for the rates, the law requires the person occupying the property (the tenant) to pay.
  • Management fees that may be paid by either the landlord or the tenant, so both parties should come to an agreement on this beforehand
  • Government rent, property tax which the landlord is responsible for settling
  • Regular expenses/utility expenses such as gas, water and electricity charges which are normally responsible by the tenant
  • Expenses such as costs for repairs to the rental property’s structure or external walls are usually responsible by the landlord

As each tenancy agreement may be different, it is important that your agreement clear states which party is responsible for paying rates, government rates, management fees, etc. The arrangements when such expenses increase or decreases should also be clearly stated.