Your comprehensive guide to rental deposits
Security and rental deposits are standard practice in any tenancy agreement, and yet it continues to be one of the most controversial topics between a landlord and tenant - but that confusion ends today!
Life often grants us a few momentous events that we will truly never forget. One of which is receiving the keys to your new home. And if you have been fortunate enough to experience this, you know that there truly is nothing like it!
You finally completed all the tedious tasks associated with finding your dream home. You secured your favourite realtor, narrowed down your favourite neighbourhood, visited every “for rent” house on the block, gone through our checklist and finally found your future home.
But before you go putting together that mood board and planning your housewarming gift list, there is still one more crucial element that you need to sort out before you go signing on the dotted line. And it is your rental deposit.
What is a rental deposit?
When you intend on renting accommodation your landlord will require a deposit. The deposit amount is often negotiated and agreed upon between you and your landlord, however, more often than not, the amount is one month’s rent that is paid upfront. The rental deposit largely exists to protect your landlord against any future repairs, damages or the defraying of outstanding utility costs after you terminate the lease.
But if you were worried that you’d be parting with quite a significant amount of money, don’t worry. At the end of your lease, you can receive your security deposit back! So, don’t panic.
What happens to your deposit once it’s been paid?
Alright, so you have just put down money towards your deposit, and you’re curious as to what happens now.
Well, according to Section 5 (d) of the Rental Housing Act, your landlord is required to invest that deposit into an interest-bearing account with a recognised financial institution. The interest that is earned on top of the initial deposit amount accrues to the tenant. If the property is managed by an estate agency, then the deposit should be protected and invested in terms of the Estate Agency Affairs Act, 1976 (Act No. 112 of 1976)
Regardless of where your security deposit is held, it cannot be spent unless appropriate circumstances arise, such as beyond your typical wear and tear.
What expenses are covered?
Your deposit is designed to cover the following things:
- Repairs to furnishings
- Utility repairs
- Inexpensive maintenance
- Indoor painting
- Cleaning and key replacements
It is also worth noting that most deposit agreements vary, so it is crucial that you read through your renters’ agreement. Make sure to be completely thorough as failure to do so could result in you losing that deposit. So, make sure you fully understand what expenses will be covered by your landlord.
Do I get my deposit back?
Yes, you do. Once you have given notice to your landlord, they will request a thorough inspection of the home. During this inspection, the landlord will check the condition of the apartment as well as the itemised inventory list. Should everything be in its original condition you will receive your deposit back. If your landlord found any damage, you will receive your deposit minus the costs of repairs.
As a landlord, how do you protect yourself beyond a mere deposit?
Simply put: all landlords need to get comprehensive home insurance.
As a landlord, you have a lot of financial responsibilities (see the above as proof). Which means you could do with the extra help. There is no need for you to have to fork out thousands of Rands on repairs and maintenance when you could just get a reputable home insurance company to do all of that for you.
In fact, signing up for comprehensive home insurance is more than a luxury. It is a necessity as this is an additional way of protecting you from avoidable costs and expenses.
Why do you need to get home insurance?
Protects your property
Did you know that home insurance includes cover for impact damage to your home? For example, if a car drives into your home, your insurance will cover it. It truly is the easiest way to protect your property.
It also includes cover for:
- Natural disasters
- Water bursts and leaks
- Theft and attempted theft
Protects your personal belongings
Most renters include a few items on their property that tenants are allowed to use. This could include a flat-screen television, kettles and crockery. Or bigger items like a couch or fridge. Opting in for home contents insurance will also protect the valuable items that you have on your property. In the event of loss, damage or theft, your insurance policy will look to cover the costs.
You are much better off having a top-notch home insurance policy than one that is not going to cover you for much. With comprehensive cover, you can rest easy knowing that your home is safe in any event.
Why deal with stress that you can cut out by taking advantage of a good home insurance policy?
Home insurance with Oneplan
Oneplan (that’s us) lets you have total control over how much insurance you want at the price you can afford, you can even turn your cover on and off whenever you want. What we mean by this is that you can pause your cover whenever you need to (especially during those tough months where it feels like you’re living paycheck to paycheck).
At Oneplan we provide ourselves on keeping our insurance hassle-free by not skipping out on the endless stacks of paperwork. You can simply control your premium from the palm of your hand via our exclusive Oneplan App.
Our home insurance policy is effective, simple and comprehensive. And that’s exactly how we plan on keeping it.