If you are looking to become a landlord in Ireland, you’ll no doubt have considered whether or not you will ask for a security deposit. The money can be invaluable in protecting your investment and helping you deal with unpredictable tenants, but it’s important to fully understand what it entails before you ask for one. Here is everything you need to know about security deposits as a landlord in Ireland.
What Is A Security Deposit?
A security deposit is a sum of money that is paid by a tenant to their landlord prior to moving into a property. It acts almost as an insurance, providing funds that can be used in the event of things like damage to the property or rent arrears (more on this below). If there is no reason for any of the deposit to be retained, then at the end of the tenancy it is returned to the tenant in full.
How Much Should A Security Deposit Be?
There are no legal guidelines in place that dictate how much you should ask for as a security deposit. However, one month’s rent is the usual amount that most landlords will ask for (and the most that the Residential Tenancies Board recommends).
You should always provide a receipt for the payment which the tenant can keep hold of and should also note the amount paid in their rent book (for more information about this, take a look at our post ‘12 Things You Must Do As A Landlord In Ireland’).
Who Looks After The Security Deposit?
By law, the security deposit is considered the tenant’s money. However, for the duration of the tenancy the deposit is usually held by either the agent letting the property on behalf of the landlord or the landlord themselves.
It should always be clear at the start of the tenancy who will be holding the deposit and whose responsibility it is to return it when the tenancy is over.