What is the Deadline for the Return of a Deposit?

What is the Deadline for the Return of a Deposit?

The statutory deadline for the return of the security deposit is provided in Article 22 of the Law of 6 July 1989 to improve the rental relationships. It varies from one to two months depending on the state of the housing at the time of delivery of the keys following the inventory. The deposit is the guarantee for the landlord of the performance of the tenant of its rental obligations.

The return of the deposit is made at the end of the rental agreement. This is one of the most common sources of dispute in rental relationships.

Introduction to the security deposit

Introduction to the security deposit

 

What is a security deposit?

The security deposit, also called a “deposit” in everyday language, is a sum of money that the tenant gives to the owner at the time of the signing of a lease. It serves as a guarantee to the landlord in case of any claims that the landlord may have against the tenant at the end of the lease contract, in the event that the tenant fails to fulfill one of his obligations: inter alia maintenance of the premises and payment rent and charges.

The amount of the deposit:

The amount of the deposit is one month’s rent excluding charges. This amount must be fixed in the rental agreement.

Warning ! The security deposit is called “caution” in common language, but the bond – legal term – does not have the same meaning. The “surety” means that a third party to the tenant and the lessor vouches for the tenant’s mistakes, for example in case of non-payment of the rent.

Step prior to the return of the deposit: the delivery of the keys at the exit of the places

Step prior to the return of the deposit: the delivery of the keys at the exit of the places

 

The return of the keys from the tenant is followed by the return of the deposit.

The handing over of the keys is a key element to the return period of the deposit. Indeed, the keys are handed over after having established the inventory of outlets. It marks the end of the contract and gives a final value to the inventory.

The inventory must at all costs be established before handing over the keys. If it is established after handing over the keys, the tenant can argue that the deterioration of the housing was made after the end of his contract. The owner will not have the means to prove otherwise and will not be able to use the deposit for the repair of the premises.

The period of restitution of the deposit begins to run at the handing over of the keys marking the definitive exit of the tenant of the places.

The period of return of the deposit in the law:

The period of return of the deposit in the law:

 

The restitution of the deposit is regulated in article 22 of the law of July 6, 1989 tending to improve the rental relationships. The law of 24 March 2014 for access to housing and renovated urban planning came to specify the return of the deposit.

Prior to the ALUR law, the return period for the deposit was two months from the handing over of the tenant’s keys to the landlord at the exit of the premises. The ALUR Act clarifies this provision. The return period of the deposit is now linked to the inventory of places of exit.

Why a legal deadline for the return of the deposit? This allows the owner to have the time to proceed with any work if the housing has been degraded, and to charge the sum of work on the deposit of the tenant. The deposit will be returned by deducting the amounts due by the tenant to the lessor in case of any damage to the premises.

Good to know ! the work must not actually be carried out during the two month period. It is sufficient for the owner to prove the reality of the damage caused by the tenant to be able to keep a part of the deposit or the totality (according to the importance of the degradations).

The variable delay of the return of the deposit

The variable delay of the return of the deposit

 

The law fixes the maximum period of return of the security deposit for empty rentals and furnished rentals. The period of return of the deposit begins to run on the day of the return of the keys of the tenant to the lessor.

Good to know ! The owner has of course the right to return the deposit to the tenant from the day of departure of the tenant, if the accommodation is returned in perfect condition.

Time of restitution for a dwelling rented as a principal residence:

Whether the rental is empty or furnished, the rule is the same:

  • The return period of the deposit is one month if the inventory of places of exit is consistent with that of entry: it means that there has been no degradation.
  • The return period of the deposit is two months if the inventory of exit is different from the one of entry.

Return period for other types of rental:

It depends on the type of lease.

For seasonal and short-term rentals, the rental agreement must provide for a return period of the security deposit allowing the landlord, in the event of damage, to replace or repair certain elements of the dwelling with part or all of the deposit.

For condominium housing, the landlord may proceed to a temporary stop of the accounts. It can also keep a maximum provision of 20% of the security deposit until the situation is regularized. The return of the deposit will take place in the month following the regularization of the situation. The adjustment must be made in the month following the final approval of the accounts of the building.

Refusal to return the deposit within the legal period

Refusal to return the deposit within the legal period

 

The delay of return of the deposit:

The tenant may give notice to the owner to return the deposit by registered letter with acknowledgment of receipt and with reminder of the maximum legal period provided for the return of the deposit.

In case of late refund, late payment interest is due to the tenant. If the landlord does not react in time, the tenant has the opportunity to claim compensation of 10% in case of late return. The landlord will have to return the security deposit and a 10% increase in the monthly rent excluding charges for each month of delay started.

Example: if the security deposit is returned within 2 months and 5 days late, the owner will have to pay an allowance of 10% for each month started to the tenant, that is 3 times 10% even if the third month has not started only for 5 days. The late payment is therefore 30% of the rent excluding charges in addition to the return of the deposit.

Warning ! The landlord must not pay a late payment if the delay is caused by the fault of the tenant. The ALUR law therefore requires the tenant to give the landlord his new address in order to allow him to return the deposit check by mail in time. This helps prevent tenant abuse. Indeed, if the owner does not have the new address, he can miss the statutory period of restitution of the deposit.

Refusal to return the deposit:

Failure to return the deposit must always be justified by the lessor. The landlord may retain the security deposit in case of unpaid rent, unpaid charges or damage to the premises by the tenant. He can justify the refusal of restitution the security deposit through various means of evidence: the inventory of fixtures, invoices and quotes of work done, letters of claims for unpaid, etc.

If the owner retains the security deposit without justification after expiry of the legal period, several recourses are open to the tenant:

  • The formal notice of the owner by registered letter with acknowledgment of receipt.
  • In case of non-restitution, and after formal notice, the tenant must seize the departmental commission of conciliation on which depends the lodging near the services of prefecture. This entry is free. It makes it possible to attempt an amicable conciliation of the parties. This procedure avoids a more expensive and slower court process. If the attempt is unsuccessful, then the commission delivers an opinion within two months of the referral.
  • In the event of failure of the previous step, the tenant has the possibility to seize the Court of Instance of the place where is located housing to which will be transmitted the opinion of the Commission within 3 years from the expiry the return period of the deposit
Elizabeth Cummings

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