Rental Deposit: Learn the Rules Here

What is a security deposit?

A homeowner who rents out a property has the option of requiring a security deposit from the tenant. When signing a lease agreement, the tenant pays this amount as a deposit. This is called a security deposit. A security deposit is an amount that the homeowner requires before the tenant moves into the property. Typically, the amount is held in a blocked account until the end of the lease.

Types of rental deposits

The law stipulates that a landlord may require a security deposit in various ways. This can be done through a blocked account in the tenant’s name, through a bank guarantee, or through a guarantee from the OCMW. It is also possible, if the landlord agrees, to provide the security deposit in the form of a personal guarantee. There are two types:

Lease agreements entered into before January 1, 2019

A lease agreement entered into before January 1, 2019, is subject to federal rental law. In this case, the maximum security deposit is two months’ rent. If the security deposit is paid in installments, the limit is three months’ rent.

Lease agreements entered into on or after January 1, 2019

The “Flemish Residential Lease Decree” applies to lease agreements entered into on or after January 1, 2019. Under this law, a landlord has the right to request a security deposit of up to three months’ rent.

Release

The security deposit can only be returned at the end of the lease after the exit inventory has been completed. The landlord and tenant then agree to return the deposit. A written agreement is then reached between both parties to release the security deposit. If there is no agreement between the tenant and the landlord when the exit inventory is drawn up, a decision by the justice of the peace may provide a solution. The claimant must then send a notice of default to the other party and file a petition with the justice of the peace. A hearing is subsequently held, and if no settlement is reached, the judge issues a provisionally enforceable judgment.

Borrowing a security deposit

Not every tenant is able to pay a lump sum equivalent to up to three months’ rent. In such cases, a rent deposit loan is an option. You can apply for an interest-free rent deposit loan from the Flemish Housing Fund.

Why a rental deposit?

The security deposit is intended to protect the landlord. If a tenant causes damage during the lease term, the property owner has the security deposit available to cover the costs. The costs of the damage are then deducted from the security deposit.

When to pay the security deposit

There is no set time by which the tenant must pay the security deposit. In most cases, the tenant pays the security deposit before the landlord hands over the keys.

Is a security deposit required?

There is no legal requirement to request a security deposit, but most landlords do ask for one. They do this to protect themselves. If there is damage to the property, they can withhold a portion of the deposit. If the landlord requests a security deposit, this must be stated in the lease agreement. The landlord must meet certain conditions to be able to request a security deposit. For example, the landlord must comply with regulations regarding the maximum number of months for the security deposit. The tenant may choose which of the four methods they wish to use to provide the security deposit. These methods may not be combined:

• In a personal account or escrow account in his name;

• Using a business security such as a capitalized bond or a bond;

• With a bank guarantee that the OCMW applies for from a financial institution;

• With a personal guarantee. The landlord must agree to this.