What is a security deposit?
Rental security deposit: definition
The security deposit is a sum paid by a tenant entering a premises, allocated to the reimbursement of any damage that may occur during the rental.
It also covers any unpaid amounts of any kind by the tenant during the contract.
Although its definition does not vary, the amount and terms of payment of the security deposit may be different depending on the type of contract concluded.
The importance of the inventory
The inventory is a document which lists the items made available to the incoming tenant and their state of conservation, dilapidation, etc.
When the tenant leaves, an exit inventory must be drawn up. It is this comparison that will allow the owner to withhold sums from the security deposit for any damage caused by the tenant.
The amounts withheld must be justified (invoices, inventory, bailiff’s report, etc.).
Article 22 of the law of July 6, 1989
Article 22 of the law of July 6, 1989 governs the use and return of the security deposit to protect the interests of tenants in the context of real estate rentals in France.
It defines:
- what is a security deposit;
- the obligations and rules relating to the latter;
- its conditions of use;
- its restitution terms.
In the event of a dispute relating to the security deposit, the tenant may appeal to the departmental conciliation commission or refer the matter to the district court.
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How does a security deposit work?
A payment upon signing the apartment lease
The security deposit must be paid when signing the lease agreement.
It sometimes happens, as an exception, that the lessor agrees that it be paid when the keys are handed over with the completion of the inventory of fixtures on entry if the two procedures are not simultaneous.
A security deposit that can be cashed
The lessor has every right to cash it, he can leave it in his current account or elsewhere, on condition that he returns it to the tenant after his departure, under certain conditions.
Security Deposit Receipt
When paying the security deposit, it is recommended to obtain a receipt (in person or by registered letter with acknowledgment of receipt), which will prove that the tenant has paid it. It may be useful in the event of a subsequent dispute.
The receipt must include:
- the amount of the security deposit;
- the payment date;
- the contact details of both parties (tenant and owner);
- a clear statement that this is a security deposit;
- the signature of the owner or his representative.
Use of security deposit
The security deposit is used to cover possible breaches by the tenant, such as:
- non-payment of rent;
- rental works not carried out;
- damage and lack of maintenance in the accommodation at the end of the lease.
Withholding a security deposit: mandatory supporting documents
If damage is found, the landlord may withhold part or all of the security deposit to cover repair costs.
He must justify the deductions with quotes or invoices.
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How much is the security deposit?
The security deposit is paid by the tenant or the roommates, in the context of a shared tenancy, to guarantee the lessor against any damage that he may cause to the premises.
A different amount for furnished and unfurnished accommodation
However, to deal with this reality, the amount of this security deposit is different depending on whether the contract relates to:
- furnished accommodation;
- an empty rented dwelling (in the context of the most common residential leases, concerning main residences).
Why a difference? Because it is considered that the risks of deterioration are greater in furnished accommodation, due to the material equipment made available to the tenant.
For empty housing
For unfurnished rental accommodation (article 22 of law n° 89-462 of July 6, 1989), the amount of the security deposit is set at the equivalent of one month’s rent, excluding charges.
Please note that the security deposit cannot be revised upon renewal of the rental contract.
For furnished accommodation
For furnished accommodation (article 25-6 of law n° 89-462 of July 6, 1989), the amount of the security deposit is set at the equivalent of two months’ rent, excluding charges.
The owner may not in any case demand more than these amounts provided for by law, in either case.
Monthly or quarterly rent
If the owner opts for the benefit of monthly rental payment (rent paid each month), which is the norm for rentals of primary residences, the security deposit is limited to one month’s rent (unfurnished accommodation).
If rent is paid quarterly, the security deposit may be higher, up to two months’ rent for a primary residence.
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When is the security deposit collected?
The security deposit is collected at the time of signing the lease, when the tenant pays this sum to the owner or real estate agency.
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Is a security deposit mandatory for a rental?
A security deposit is not mandatory
The landlord (or real estate agent) is never obliged to ask for this security deposit and can exempt the tenant from it if they wish, although this is not considered prudent.
A mention in the mandatory lease
On the other hand, if required, a clause relating to this security deposit (amount and payment) must be included in the lease contract when signing (article 3 of law n° 89-462 of July 6, 1989).
Case of rents payable two months in advance
A security deposit can never be required if the rent is payable in advance for a period exceeding two months.
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What assistance is available to pay the security deposit?
It should be noted for the benefit of tenants that the amount of this security deposit can be financed through a third party.
Loca-Pass
This is assistance intended for tenants who have difficulty financing their security deposit.
The Loca-Pass advance offers a zero-rate loan, repayable in 25 months, which can be used to finance the security deposit.
It is accessible under certain resource conditions and is reserved for tenants of private or social housing.
1% Housing (Action Logement)
This system helps private sector employees to access housing, including by financing the security deposit.
This may be a refundable advance that covers all or part of the security deposit.
Beneficiaries must be employees of a company contributing to Action Logement, and resource conditions may apply.
FSL (Housing Solidarity Fund)
The Housing Solidarity Fund (FSL) is financial aid intended for people who have difficulty accessing or maintaining housing.
Regarding the security deposit, the FSL can grant an advance or a grant to help finance it when signing a lease.
Personalized housing assistance (APL)
Although the APL is intended to reduce the amount of rent, it can help cover moving-in expenses, including the security deposit, by increasing the tenant’s financial capacity.
Housing benefits (APL, ALF, ALS): conditions and procedures
When to get the security deposit back?
Return of security deposit in the absence of damage
If the accommodation is returned in good condition, without damage, the final regularization and the security deposit must be returned to the tenant within one month of the keys being handed over.
Please note that the tenant must provide the address of their new home when leaving the rental.
Refund of security deposit in the event of damage
If damage is noted, the security deposit must be returned within two months of the keys being handed over.
Any withholding from the security deposit must be justified.
Social housing: definition and conditions
What to do if the landlord does not return the security deposit?
Make a formal request
In case of delay and if the owner has not returned the security deposit, send a registered letter with acknowledgment of receipt requesting the return of the deposit.
You must specify the amount, the end date of the lease and the legal repayment period.
Put the owner on formal notice
If necessary, you can send a formal notice (always by registered mail with acknowledgement of receipt) requesting restitution within a reasonable period, generally eight to 15 days.
Request late payment interest
If the owner does not respect the legal deadline, he is liable for late payment interest of 10% of the monthly rent for each month of delay.
Legal recourse
If despite this the owner still does not return the deposit, legal proceedings will have to be initiated:
- You can contact the departmental conciliation commission.
- If no conciliation is successful, you can refer the matter to the local court of the rental location. No lawyer’s assistance is required for amounts less than 10,000 euros.
Referring a matter to the judicial court: all the steps
What is the difference between a security deposit and a surety deposit?
A security deposit and a security deposit are two very different things.
Security deposit
The security deposit is a sum determined in advance which aims to guarantee the owner against various risks of non-payment of rental payments.
Surety or surety contract
The deposit concerns a third party, natural or legal, who undertakes to the owner to pay the sums which could be owed by the tenant if he defaults.
The amount of the security deposit commitment exceeds the amount of a simple security deposit. It is therefore a stronger guarantee for the benefit of the owner and can be added to it.
Joint and several liability
Can we ask for a deposit and a security deposit?
In the context of a private rental, it is prohibited to require both simultaneously, except with a tenant benefiting from specific guarantees such as the Visale guarantee (a State system).
So the landlord must choose between asking for a security deposit or for a third party to act as guarantor for the tenant, but not both.
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