Deposit Refund: your rights and obligations
A deposit is an amount that a tenant pays to the landlord at the beginning of a lease agreement. It serves as security for any damage or unpaid rent. According to the law, the tenant is entitled to repayment of this deposit, but under certain conditions. In this article, we explain how the refund works, what your rights are and what you need to do to get your deposit back.
What is a deposit?
A deposit is a financial guarantee that a tenant pays to a landlord before the lease agreement commences. This amount is intended to protect the landlord against any damage to the property or unpaid rent. The deposit is not the same as the first month's rent or other costs such as agency fees or administrative costs.
According to Article 7:200 of the Civil Code (BW), the deposit may not exceed three months' rent (excluding service charges). For a property with a rent of €1,000 per month, the deposit may therefore amount to a maximum of €3,000. In practice, a deposit is often requested that corresponds to one month's rent.
Example
Suppose you rent a property for €1,200 per month. The landlord requests a deposit of €1,200. This is permitted, as it falls within the statutory limit of three months' rent (€3,600). If the landlord requests €4,000, however, this is in violation of the law.
Statutory basis for deposit refund
The statutory rules regarding the deposit are laid down in the Civil Code (BW), in particular Articles 7:200 to 7:214. These articles regulate, among other things:
- Article 7:200 BW: The maximum amount of the deposit (maximum three months' rent).
- Article 7:201 BW: The landlord's obligation to place the deposit on an interest-free account.
- Article 7:202 BW: The period within which the deposit must be refunded (within two months after termination of the lease agreement).
- Article 7:203 BW: The landlord's option to withhold the deposit for damage or unpaid costs.
- Article 7:214 BW: The landlord's obligation to provide a deposit statement, stating where the deposit has been deposited.
In addition, the Rent Allowance Act is relevant, as this act contains rules on the use of the deposit for properties where rent allowance applies.
Your rights regarding deposit refund
As a tenant, you have several rights with regard to the deposit:
- Interest-free on a separate account number: The landlord is obliged to place the deposit on an interest-free account and provide you with a deposit statement. This statement must contain the account number and the name of the bank.
- Refund within two months: Upon termination of the lease agreement, the landlord must refund the deposit within two months, unless there are valid reasons not to do so (for example, unpaid rent or damage).
- No withholding without reason: The landlord may only withhold the deposit if actual damage has occurred or if rent or other costs have not been paid. The landlord must provide you with a written explanation, including supporting documents such as invoices or photos of damage.
- Interest on delayed refund: If the landlord does not refund the deposit on time, you are entitled to 6% interest per year on the outstanding amount (Art. 6:119 BW).
Important: The landlord may not use the deposit as payment for the last month's rent or other costs, such as cleaning costs, unless this has been agreed in the lease agreement and the costs have actually been incurred.
Attention!
If the landlord does not refund the deposit or wrongfully withholds it, you can challenge this with the rent tribunal or the court. Read more here: Rent Dispute: what now?
Your obligations regarding deposit refund
As a tenant, you also have obligations to ensure that the deposit is correctly processed