Rental Housing Act Section 5(3) Explained: Deposits, Receipts, Inspections & Refund Rules

In general terms, section 5(3) provides that certain standard terms are treated as part of a residential lease (and are enforceable in a competent court), even if the parties did not expressly write them into the agreement. The section is designed to set a minimum baseline for items like receipts, deposits, inspections, deductions, and refunds.

Section 5(3)(a) states that a lease is deemed to include a term “to the effect that the landlord must furnish the tenant with a written receipt for all payments received by the landlord from the tenant.”

Section 5(3)(b) states that the receipt must be dated and must clearly indicate the dwelling address (including street number and further description if necessary). It must also indicate whether payment was for rental, arrears, deposit or otherwise, and specify the period for which payment is made.

Section 5(3)(b) includes a proviso that “a Tribunal may, in exceptional cases, and on application by a landlord, exempt the landlord from providing the information contemplated in this paragraph.” Whether an exemption applies in a particular situation would depend on the Tribunal’s decision and the facts presented.

Section 5(3)(c) states that the lease is deemed to include a term that “the landlord may require a tenant, before moving into the dwelling, to pay a deposit” which “may not exceed an amount equivalent to an amount specified in the agreement or otherwise agreed to between the parties.”

Section 5(3)(d) states that the deposit must be invested by the landlord in an interest-bearing account with a financial institution. It further states that the landlord must, subject to paragraph (g), pay the tenant interest at the rate applicable to that account, which may not be less than the rate applicable to a savings account with that financial institution.

Yes. Section 5(3)(d) states that the tenant may, during the lease period, request written proof of interest accrued on the deposit, and the landlord must provide such proof on request.

Section 5(3)(d) includes a proviso that where the landlord is a registered estate agent under the Estate Agency Affairs Act, 1976, the deposit and any interest “shall be dealt with in accordance with the provisions of that Act.”

Section 5(3)(e) states that the tenant and landlord must jointly inspect the dwelling before the tenant moves in, to check for defects or damage, determine responsibility for repairs, or register defects/damage as contemplated.

Section 5(3)(f) states that at the expiration of the lease, the landlord and tenant must arrange a joint inspection at a mutually convenient time, within three days prior to expiration, to determine whether damage occurred during occupation.

Section 5(3)(g) provides that on expiration the landlord may apply the deposit and interest toward payment of amounts for which the tenant is liable under the lease, including the reasonable cost of repairing damage to the dwelling during the lease period and the cost of replacing lost keys. It also provides that the balance (if any) must be refunded within the timeframe stated.

Section 5(3)(g) states that the balance of the deposit and interest (if any) must be refunded “not later than 14 days of restoration of the dwelling to the landlord.”

Section 5(3)(h) states that the relevant receipts indicating the landlord’s costs (as contemplated in paragraph (g)) must be available to the tenant for inspection as proof of such costs.

Section 5(3)(i) states that where no amounts are due and owing to the landlord, the deposit together with accrued interest must be refunded without deduction or set-off within seven days of expiration of the lease.

Section 5(3)(j) states that failure by the landlord to inspect in the tenant’s presence as contemplated in paragraphs (e) or (f) is deemed to be an acknowledgement that the dwelling is in a good and proper state of repair. It further states that the landlord will have no further claim against the tenant and the tenant must then be refunded the full deposit plus interest.

Section 5(3)(k) addresses this scenario. It states that if the tenant fails to respond to the landlord’s request for an inspection under paragraph (f), the landlord must inspect the dwelling within seven days after expiration to assess damage or loss during the tenancy.

Section 5(3)(l) states that in the circumstances contemplated in paragraph (k), the landlord may, without detracting from other rights or remedies, deduct from the deposit and interest the reasonable cost of repairing damage to the dwelling and replacing lost keys.

Section 5(3)(m) states that the balance (if any) must be refunded not later than 21 days after expiration of the lease.

Yes. Section 5(3)(n) states that the relevant receipts indicating the landlord’s costs (as contemplated in paragraph (l)) must be available to the tenant for inspection as proof of such costs.

Section 5(3)(o) states that if the tenant vacates before expiration without notice, the lease is deemed to have expired on the date the landlord established that the tenant had vacated the dwelling. It also states that in that event the landlord retains rights arising from the tenant’s breach.

Section 5(3)(p) states that “any costs in relation to contract of lease shall only be payable by the tenant upon proof of factual expenditure by the landlord.” In general, this indicates that a charge described as a lease-related cost is linked to proof that the landlord actually incurred the expense.

Section 5(3) generally functions as a built-in set of minimum lease terms about documentation (receipts), deposits and interest, joint inspections, permissible deductions, proof of deductions, and timeframes for refunding deposits, as reflected in paragraphs (a) through (p).