Returning the security deposit - What the landlord can retain the security deposit for

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The landlord is entitled to retain so much of the security deposit as is necessary to:

  • make good any damage to the premises or ancillary property that was caused by the tenant, other than reasonable wear and tear;
  • replace ancillary property lost or destroyed by the tenant;
  • clean the premises and ancillary property left unreasonably dirty;
  • replace locks which were altered, removed or added by the tenant without the landlord's consent;
  • pay for unpaid rent or for any unpaid electricity, gas or water charges payable by the tenant to the landlord;
  • pay compensation to the landlord if the tenant remained in the property after they were required to hand over; and
  • pay money ordered by the Commissioner or the Court to be paid by a tenant but not paid.

If a tenant breaches a fixed term agreement by abandoning the premises prior to the end of the term, the landlord can continue to hold on trust as much of the security deposit as is necessary to ensure that the deposit will be available for payment to the landlord as compensation for;

  • loss of the rent that the tenant would have been liable to pay if the premises had not been abandoned; and
  • loss caused to the landlord in securing new tenants for the premises.

Once the landlord has established the loss caused by the tenant breaching the agreement, they must make an application to the Commissioner for compensation under section 122. The landlord must make this claim as soon as practicable after the loss can be calculated or in any case within 3 months from the date the tenant abandoned the premises.

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