After not paying a deposit in her lease agreement several years ago, a reader wants to know if her landlord can now demand the deposit or have her evicted if she does not pay it.
When she first entered into the lease agreement she was not in a financial position to pay the full deposit, but the landlord accepted her as a tenant anyway.
Now he has asked for payment of the deposit, maintaining she is in breach of contract for not having paid it.
See the reader’s question here.
A deposit is required by a landlord to ensure sufficient funds are available to pay for potential repairs once a tenant has vacated the property.
At the inception of the lease the parties may also agree to record the state of certain of the fixtures and fittings of the leased property.
Some fixtures may be excluded from the application of the deposit at termination of the lease due to their condition being less than perfect.
It is also fairly common to include a provision stating that the landlord may use the deposit to make good in other instances where the tenant is in default.
For example, the deposit can be used to “top up” a shortfall on a monthly rental payment.
The provision in the lease then usually states that the landlord will require the tenant to restore the amount of the deposit held by the landlord upon request.
In this way the deposit is always at the original amount.
By foregoing the lodging of a deposit at the inception of a lease, the landlord is placed at considerable risk.
There will be no funding readily available to make good any repairs and the landlord may have to take legal steps to secure funds for the necessary repairs.
In the absence of the lease agreement it is not possible to determine with certainty that the reader is in breach of the conditions.
It is possible that the landlord tacitly waived his right to the deposit by allowing the reader to take occupation, but certain provisions in the agreement could negate such an argument.
Further, a provision in the agreement may allow for the reinstatement of the deposit at any time during the currency of the lease.
In such a case, the reader may well be in breach should she not reinstate the deposit in the manner prescribed in the agreement.
The reader will not be evicted immediately as a result of her so-called breach as the landlord will still have to follow the necessary legal steps to evict her should he elect to do so.
If she is in breach, the landlord should follow the provisions of the agreement which usually entails him placing the tenant on terms.
That requires the tenant to make good on the breach within a certain period.
Should the breach continue despite the notice, the landlord could consider cancellation of the lease, together with the option of eviction.
If she is happy to stay on the leased property, she should consider paying the deposit.
She could perhaps do this in instalments if the landlord accepts such an arrangement because even if she is not placed on terms or evicted it is unlikely the landlord will want to continue with her as a tenant at the time of renewal.
The landlord may also provide other property owners with a negative reference, which may hamper her securing a desirable leased property in future.
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