Deductions for restoration costs: what the landlord must prove

On the day you get your deposit back, the settlement statement sometimes comes with a string of unexpected items: the cost of replacing all the wallpaper and flooring, move-in cleaning fees, repairs for nail holes in the walls, and so on. Deducting from the deposit is a legitimate right in itself, but not everything can be deducted.

What can be deducted from the deposit

A deposit is money that secures the tenant's obligations until the lease ends. So overdue rent, unpaid maintenance fees and the cost of repairing damage the tenant caused are deducted from the deposit. However, the landlord who claims a deduction must prove that such a claim arose. If the settlement statement only lists amounts with no basis, you can ask for the basis first.

Restoration does not mean making it new

Restoration to the original state means returning the property to the condition in which the tenant received it, not making it like new. It is generally considered that the tenant has no obligation to fix wear and tear from ordinary use, such as wallpaper faded by sunlight, dents where furniture stood, or faucets worn from long use. On the other hand, doors scratched by pets, walls yellowed by smoking, and marks left from removing fixtures the tenant installed on their own may be the tenant's responsibility.

It is also common for the full replacement cost to be charged when only part is damaged. In that case, the amount can be disputed based on the extent of the damage and how long the material had already been used. A tenant should not have to pay the full price of new flooring because one corner of 10-year-old flooring was dented.

From the landlord's side, giving a settlement statement with the basis for each deduction is the way to reduce disputes. Holding back a large amount without a basis can result in liability for late-payment damages on that portion.

In the end, photos tell the story

• Dated photos of the walls, floors and fixtures in each room taken on move-in day
• Photos and videos taken while checking the condition with the landlord on move-out day
• The landlord's estimate and an estimate obtained from another company
• Settlement records for maintenance fees and utilities

Cleaning fees are another frequently disputed item. If the tenant tidied up to a normal standard before leaving, there is little reason for the tenant to pay for professional cleaning for the new tenant. However, if the contract separately provides for a move-out cleaning fee, that agreement must be looked at first.

Without photos from move-in, you have weaker grounds to argue that a flaw was there from the start. If the special terms of the contract set out the scope of restoration, that wording also matters. However, if a special term is written broadly so as to put even ordinary wear and tear on the tenant, there is room to dispute its interpretation.

If you cannot agree to the amount deducted, you can ask for at least the undisputed amount to be returned first. If it still can't be resolved, each item will be decided in a lawsuit for return of the deposit, and for cases where a dispute over deductions is expected, it is better to go to a lawsuit from the start rather than apply for a payment order.