When the landlord holds onto your deposit

We all have come across dodgy renters or agents who won’t refund your security fee after you have moved out for reasons, such as repair costs... but what does the law dictate?

After weeks of searching, Rachael Maingi finally found her ideal apartment. It was a spacious one bedroom with a well-designed kitchen, enough storage and a balcony with beautiful views. She met the landlord, and a deposit of Sh50,000 was paid.

All was well, until three years later when she wanted to move out to her newly bought home. As expected, she tendered a one-month notice and awaited her deposit, which she thought would be a smooth undertaking. Shock on her, a few days after moving out, she saw a never-seen-before side of her landlord.

“The landlord told me that the kitchen sink was faulty and the toilet was not flashing well hence he had to use my deposit cash to repair them, things that I had made sure were in good condition before I left the house,” Rachael narrates.

It has now been two years of endless back and fourth and the landlord won’t refund her deposit, nor produced receipts of the alleged repairs.

This kind of tug of war between landlords and tenants is not a strange thing. Standard practice has always been that the landlord refunds rent deposit paid at the start of the tenancy. However, the process of getting back your deposit can get stressful to a point where tenants choose to forget about it and move on.

Christabel Ojuok, an asset management consultant says lack of clarity on the tenancy agreement on the purpose of deposit, how and when it should be refunded is one of the major reasons landlords often hold on to the deposit. “One should sign a tenant agreement that stipulates when the deposit will be given and also when a tenant can give notice that they are moving out clearly. The landlord and tenant should both have copies of this,” she says.

Two-year term

Another reason, she says would be if the tenant breaks or leaves the house in a worse state than they found it. “If there was no checklist at the point of tenant onboarding, repairs done by the landlord may supersede the scope of repairs within the tenant’s domain and consequently the tenant loses,” adds Christabel.

In other cases, Christabel says, the  tenant could just be dealing with a rogue landlord who has been in the habit of refusing to refund the deposit.

In her five years as a lawyer, Dorcas Wamaitha, founder of Wamaitha Gichamba and Company Limited says the commercial relationship between a tenant and a landlord is mainly governed by land laws.

“Legally speaking, any tenancy that is made for a term of two years or less without an option for renewal is considered a short term lease. Of note is that a short term lease is not a registrable interest in land. In other words, there is no obligation whatsoever to register a short term lease with the Ministry of Lands. The requirement to register only applies to leases whose period exceeds two years,” she explains. “The law also allows a short term lease to be made orally or in writing,” she adds.

Dorcas adds that at the inception of lease agreements, landlords usually require payment of deposits by tenants. The absence of clear terms, is what results in disagreements when a tenant desires to move out of the premises and requests for a refund of the deposit.

“Landlords, at this juncture, demand that the tenant caters for expenses, such as repairs and painting works, relating to the premises. If the amount required to undertake all these works is not expressly agreed upon at the point of entering into this relationship, landlords exploit this as a loophole by seeing to it that the deposit is fully utilised to carry out the repairs and maintenance leaving little or no cash at all to be refunded to the tenant,” she continues.

The experts say the Kenyan law is very shallow in regard to the management of security deposits and, therefore, offers a loophole for landlords to exploit their clients. The security deposit does not belong to the landlord, but it is a property of the tenants by title placed in possession of the landlord.

Just like in hire purchase agreement where the lessee gain possession and rights to use the assets while paying monthly installments. The owner of the asset retains ownership such that in case the leasee defaults in payment, the owner may repossess the asset as per the set procedure provided by law.

Engaging a lawyer

“The Landlord and Tenant’s Bill 2021 seeks to consolidate all laws on residential and commercial tenancies to govern the relationship between landlords and tenants. For instance, issues relating to residential tenancies where the prescribed rent is less than Sh2,500 per month fall within the jurisdiction of the Rent Tribunal.

We are yet to see if the cap will be increased to accommodate tenants paying rent of higher amounts. With that said, there isn’t a specific body where tenant issues can be reported and resolved, with the exception of taking the legal route,” says Christabel.

The deposit is held by the landlord for due performance by the tenant, and if the tenant honours their obligation, it should be refundable in full to the tenant.

Let’s say a landlord is rogue, how can tenants get their deposit? Christabel urges tenants to conduct due diligence on both landlords and property management firms. Unfortunately, we lack a central database where such information can be retrieved.

“My advise would be to engage one or two tenants residing in the property to get a clear picture and manage expectations earlier on. Another approach would be to document everything from the onset. All correspondence pertaining to repairs should also be in writing. It is worth noting that the push and pull around deposit commonly arises as a result of two key issues: A lack of clarity on each party’s responsibility when it comes to repairs and rent arrears,” she recommends.

Pamela Nderitu, a registered estate agent urges tenants to take two weeks before moving into a house and have an inventory to check out what is working and what’s not in the house. “Ensure that other repairs are done before moving into the house in these two weeks. Any other costs discovered when you move in will be seen as your cost by the landlord,” she advises.

The inventory also helps the landlord because there are tenants who get into houses and mess it up and it may become difficult to prove how things were before the tenant moved in. Both parties should sign and keep a copy each. “Don’t let them tell you that you’ve broken anything and there is no evidence of proof that they repaired it. They should do so before deducting from the deposit,” she says in ending.

For these and more credible stories, join our revamped Telegram and WhatsApp channels.

Telegram: https://t.me/peopledailydigital

WhatsApp: https://whatsapp.com/channel/0029Va698juDOQIToHyu1p