What is a Security deposit, how much is it and what does it cover?

A security deposit in Dubai is an amount that the tenant pays to the landlord at the commencement of a tenancy, which is later refundable. It serves as a guarantee for the landlord, and it is normally obtained at 5% of annual rent or 10% respectively in an unfurnished or furnished property. The deposit is meant to cover unpaid rent, any damages over and above normal wear & tear, cleaning costs (in the kitchen/ self-cater facilities), utility bills: and lost keys; The landlord is accountable for any deductions they make, the rest of it gets returned to the tenant at end of the tenancy.

About Security Deposit

A security deposit is an amount of money that is refundable that a tenant pays to a landlord at the start of a tenancy in Dubai. It provides the landlord with a measure of financial security against possible tenancy contract violations, damage to the property, and unpaid rent.

The amount: For unfurnished rentals, the security deposit is usually equal to 5% of the annual rent; for equipped properties, it is 10%. This sum is often agreed upon by both parties and stated in the tenancy contract.

What is covered: The landlord may utilize the security deposit to pay for the following:

• Unpaid rent: If the renter vacates the property without paying any outstanding balances or does not make rent payments on schedule. 
• Property damage: This refers to any harm done by the renter or their visitors beyond typical wear and tear. 
• Cleaning expenses: Should the property be left in an extremely filthy or unhygienic state. 
• Utility bills that are not paid: If the renter has unpaid water, power, or other utility bills. 
• Lost keys or access cards: If the renter misplaces their keys or access cards, new ones must be provided.

Refund: If there are no unpaid debts or property damage after the tenancy, the security deposit is typically returned to the renter. However, the landlord may deduct amounts for any damages or unpaid bills from the deposit.

Dispute Resolution: Tenants can seek assistance from the Rental Dispute Settlement Center (RDSC), which was established by the Dubai Land Department, in the event of problems pertaining to the security deposit.