Why Landlords should ensure they charge a Security deposit

A security deposit is a sum, usually in the form of money, that the tenant agrees to pay the landlord before moving into the rental unit. The amount is usually based on the monthly rent or a percentage of the annual rent.
For Example: The landlord required the equivalent of one and a half month’s rent to be held as a security deposit in case of damage to the apartment or breach of lease.

Landlords are not required to collect a security deposit from there tenants, but it is usually in a landlord’s best interest to collect one.
Here are three important reasons to require a security deposit before a tenant can move into your rental property.

• Tenants More Careful- No one likes losing money. If a tenant knows their actions will determine if they receive their full security deposit back, they are more likely to avoid damaging their apartment and will want to follow the terms of their lease.

• Safeguard Against Damage- By collecting a security deposit, a landlord can take immediate deductions from this deposit instead of having to file a lawsuit against the tenant to pay for the damages.

• Safeguard Against Non-Payment- Since a security deposit is usually equal to one month’s rent or more, it helps to financially protect the landlord if the tenant stops paying their rent.

There is no uniform rule for security deposits in NIGERIA.

If a landlord has collected a security deposit from a tenant, it is important that the landlord include the terms of this security deposit in the lease agreement.
It should include the amount of the security deposit, where the deposit will be stored, reasons a landlord can make deductions from the deposit and when and how and when the deposit will be returned to the tenant.

Security Deposit Receipt
It is required for a landlord to provide the tenant with a receipt after collecting the tenant’s security deposit. This receipt may include the amount of the security deposit, the name, and address of the financial institution where the deposit is being kept and the annual interest rate.for

Taking Deductions From the Security Deposit
At the end of a tenant’s lease, if the tenant has fully followed their lease agreement, the landlord will return the security deposit in full. If a tenant has violated the terms of their lease, including, but not limited to, non-payment of rent or damage to the property, a landlord may be allowed to keep all or part of the security deposit to cover their loss.

Security Deposit Disputes
There are times when a landlord and tenant will disagree about the deductions that have been taken from a security deposit. These disputes will often be taken to court.
But its best if a contractor from the landlord negiotiates with the tenant on the repair cost for the identified damages. This would aid in getting to a common ground.

Tenants are adviced to know and read their agreements before making payments for properties.