Lease Agreement: Security Deposit, Costs and Obligations of Both Parties

Most rental disputes do not arise from bad will, but from items that were never written into the contract. This is a list of the ones most often left out.

In practice a verbal agreement is worth nothing the moment a disagreement arises. A written contract should include at least the following.

• Details of both parties and an accurate description of the property.
• Rent amount, payment date and payment method.
• Lease duration and renewal terms.
• Notice period for both parties.
• Security deposit amount and the conditions for its return.
• Breakdown of costs, item by item.
• List of equipment and the condition at handover.

One to two months' rent is customary. The deposit covers damage and unpaid costs, but it is not the last month's rent paid in advance — unless the contract says so explicitly.

A formal handover record with photographs and meter readings is the crucial part. Without one, at the end of the tenancy nobody can prove whether damage was pre-existing or occurred during the lease.

The split is a matter of agreement, but in practice a simple rule applies: whoever consumes pays for consumption, and whoever owns maintains the property.

• Tenant: electricity, water, gas, utility charges, waste collection, internet.
• Landlord: building reserve fund, building insurance, taxes.
• Minor repairs arising from normal use: tenant.
• Faults in installations and major appliances: landlord.

Set the boundary between a minor repair and a fault by naming an amount in the contract itself. That removes the most common source of misunderstanding.