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Rent deposit, every tenant's nightmare

REAL ESTATE
By | January 13th 2011

When Michael Kimano wanted to move out of his one bedroom apartment in Nairobi's Donholm to a more spacious one in Jamhuri Estate along Ngong' Road, he budgeted for a refund of his rental deposit amounting to Sh22,000.

The terms of his tenancy in Donholm included a two-month deposit refundable so long as he gave a two-months notice to the owner. Little did he know what lay in wait for him.

"My landlady bluntly informed me that I was leaving the house in a poor state hence I could not get my deposit as it was going to be used to redo the house," says Michael.

But when Robinson Jalam wanted to move from his two bedroomed house in Kibera’s Ayany Estate, he knew his chances of getting a refund of his one month’s rent amounting to Sh15,000 were nil.

"There was no written agreement. So I decided to live for another month without paying rent and finally moved out," he says.

Unlike Mike, he made use of his deposit before moving out. This is just a tip of the iceberg of what some tenants go through when they want to move houses. Many landlords have increasingly been coming up with flimsy excuses as not to refund rent deposit.

Expensive affair

Requirement to pay rent deposit (often two months rent), water deposit, electricity deposit and in some estates security deposit is a common trend. And landlords use this to make moving houses an expensive and frustrating venture. Many landlords have also taken upon themselves to raise the amount of deposit demanded by water and electricity service providers with the difference being pocketed.

Houses in Nairobi. When moving into a new house, one should take inventory of the condition of the house. [PHOTOS: EVANS HABIL]

According to Stephen Mutoro, Chief Executive Officer of the Kenya Alliance of Resident Associations who is also the Secretary General of Consumers Federation of Kenya, a tenant is only required to pay a month’s rent in advance as security deposit. This should be refunded if the house is returned in its original condition at the end of the contract.

"Often you spend a lot of money when moving into a new house and this is your money so the landlord must refund your deposit when you move out," he notes.

Prior to moving out the landlord must inspect the house in your presence and can only withhold your deposit for certain specific reasons like outstanding rent payments or utility bills and these should only be to the specific outstanding balances.

To guard against landlords out to frustrate a tenant, a thorough check of the house is necessary before moving in.

"When moving in, one should take inventory of the condition of the house, recording any existing damage and checking all fixtures to make sure they are working. Check if the house is painted," advises Mutoro.

The tenant should then prepare an inventory and have the landlord sign it. If they won’t sign, send him/her a copy and keep one sealed and if possible together with pictures or videos of defects in the house.

Inspection

The law requires that a landlord conduct a pre-move-out inspection in the presence of a tenant and let them fix identified deficiencies.

"The landlord must notify the tenant in writing of the pending inspection and must conduct the inspection in the last two weeks of tenancy in the presence of the tenant," notes Mwendwa Maundu a Nairobi based lawyer.

He also notes that the landlord must let the tenant fix any damages and is restricted to making deductions for unfixed damages that occurred after the inspection, or damage not found at the time of the inspection.

"Rent deposit must be returned within 21 days of moving out and the landlord must provide a statement with items he/she had to charge you as reason for any amount withheld from your deposit," says Mutoro.

The landlord can only have the tenant’s deposit withheld only for unpaid rent or damage caused by the tenant beyond normal wear and tear. In such cases, Mutoro notes, the landlord must provide receipts documenting the costs of claimed repairs or estimates, unless the landlord does the work him/herself in which case they must describe the work done.

In either case, if materials are purchased, copies of the purchase receipts must be provided or estimates in order to have the figures authenticated.

Should tenants also demand for a refund of the utility deposits too? What does the law say about these kinds of deposits? According to the Kenya Power and Lighting Company, Sh2,500 is the amount charged to create a new electricity account.

This amount is refunded when the tenant moves and closes the account. However, many tenants are unaware of this and most landlords are unwilling to disclose this either. On the other hand, the provision of water is the landlord’s responsibility and in essence it is the landlord who enters into contract with the Nairobi City Water and Sewerage Company (NWSC) to manage their properties’ water accounts. However, this is an arrangement that lives a lot of room for tenant exploitation.

Rip off

But there are those landlords who peg monthly water costs to the rent and then go ahead to ration it in order to minimise their amount paid to NWSC making a profit from the single meter.

"If your landlord does not return your money on time or if he unjustly withholds some of it, be prepared to assert your rights and remember, many landlords withhold all security deposits knowing that many tenants will not take the steps to get back their money," notes Maundu.

As with the case of Michael, most tenants opt to keep quiet and forfeit their deposits yet in reality, it is the landlords who are acting in breach of the law. In such cases, notes Mutoro, there is the Rent Restriction Tribunal, which handles disputes between the landlord and tenant.

"In most cases, the cost of taking cases to the tribunal discourages many from seeking help. The tribunal also faces a backlog of cases denying many tenants a proper forum for hearing disputes," Mutoro adds.

Like Robinson, tenants who think it may be difficult to get the landlord to refund the deposit can opt to use the deposit as the last month’s rent.

"The tenant needs to write a note to the landlord explaining that he/she needs the money for say moving expenses, and that you intend to leave the place clean, and even offer to have the landlord inspect the apartment to inspect for any damage," Mutoro advices.

 

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