Deposit deductions done right: what you can and can't keep (template) | RentTab

From a deposit you can lawfully deduct damage beyond normal use and the tenant’s debts (unpaid rent, unsettled utilities). Normal wear and tear — worn flooring, faded paint — and faults that already existed at move-in are not deductible. Always settle the deduction itemised, in writing, measured against the move-in condition. (The context is Hungarian; adapt to your market.)

What can you lawfully deduct?

• damage beyond normal use (e.g. a broken door, a burnt worktop, a damaged wall, missing furniture),
• the tenant’s debts: unpaid rent, unsettled utilities (based on the meter readings),
• the cost of contracted obligations left undone (e.g. end-of-tenancy cleaning, if agreed).

What can’t you deduct?

• normal wear and tear: paint faded over years, worn flooring, aged seals,
• faults that already existed at move-in,
• renovation that is general upkeep of the property (not tenant-caused damage).

Normal wear vs. damage — the key question

This decides most disputes. The test: is it a by-product of normal use, or damage beyond it?

If unsure, the move-in photos decide: what was intact then and is damaged now is damage.

The settlement steps (5)

1. Move-out condition check — against the handover protocol and photos, compared to move-in.
2. Close meter readings + utilities, establish any debt.
3. Itemised settlement — line by line: what the damage/debt is, the amount, and why.
4. Return the balance to the tenant with a written statement.
5. Document it — both parties get the settlement.

Copyable deposit-settlement template

DEPOSIT SETTLEMENT
Date: __________________
LANDLORD: ________________________________
TENANT:   ________________________________
RENTAL ADDRESS: __________________________
Deposit held: ____________
DEDUCTIONS

_________________________________  − __________
_________________________________  − __________
_________________________________  − __________
(damage / unpaid rent / unsettled utilities)

Total deductions:                − __________
DEPOSIT TO REFUND:                 __________
Refund method: ☐ bank transfer  ☐ cash
Deadline: __________________
Deductions are based on the move-in condition (handover protocol + photos),
for damage beyond normal use and/or outstanding debt.
Signature (landlord): __________   Signature (tenant): __________

For information only, not legal advice. In a dispute, the contract and the documentation (protocol, photos) govern; seek legal help if needed.

Where RentTab helps

Lawful deduction rests on documentation. RentTab stores the move-in condition, the photos, the meter readings and the utility settlement per property, so at move-out the itemised deposit settlement takes minutes: move-in and move-out compare directly, and the debt is unambiguous. RentTab doesn’t handle money — moving the deposit stays with the parties; it supports the records and the settlement.

Frequently asked questions

What can the landlord deduct from the deposit? Damage beyond normal use and the tenant’s debts (unpaid rent, unsettled utilities). Not normal wear and tear.

Can worn paint or flooring be deducted? No. Normal wear — faded paint, worn flooring — is a by-product of time and normal use, not tenant damage.

What if there’s no move-in protocol? It’s hard to prove what was already faulty, and the deduction can become contentious. Always make a move-in protocol and dated photos.

By when must the deposit be returned? Within the contract’s deadline, after move-out and settlement, with a written statement.