– In line with the Rent Act section 3-5, the deposit or bank guarantee when renting a house in Norway must correspond to a maximum of six months’ rent, but the norm is probably three months, says partner Botolf Botolfsen at Langseth Advokatfirma.
– The amount must be placed in a blocked account in the tenant’s name, which means that the money cannot be touched, unless the parties agree or there is a judgement.
Have a five-week deadline
According to the Oslo-based lawyer, the agreement entered into with the bank will regulate the deadline for repayment of the deposit at the end of the lease.
– This is based on the law, which states that the landlord can demand documented unpaid rent, if the tenant has not taken legal action, normally through a settlement complaint, within five weeks after the tenant has been notified of payment, he adds.
– The notice of payment must be sent from the landlord and the bank, but there is no deadline for when this must be done; it can either happen during the rental period or after the rental relationship has ended.
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Often missing rent
– What rules apply to deductions from the deposit? What are the most common deductions?
– This is also regulated by the Tenancy Act section 3-5, says Botolfsen.
– What are usually demands from the landlord are non-rent, non-maintenance and payment for damages.
– Is there any “penalty” if the tenant fails to pay rent for, for example, three months, and this rent amount is deducted from the deposit at the end of the tenancy?
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– No, the tenant only has to pay the rent plus interest, which can perhaps be perceived as a punishment, replies Botolfsen.
Partner Botolf Botolfsen in Langseth Advokatfirma. Photo: Langseth Advokatfirma
Can cancel the contract
– What if the tenant wants to terminate the tenancy before the lease has expired, for example due to an unexpected amount of noise in the neighborhood or surprising defects in the home itself? Can he claim to have the entire deposit refunded?
– If there are significant defects in the home, the tenant can cancel the agreement or terminate it, if it has been agreed, the lawyer states.
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– The landlord must then release the deposit in the usual way.
– What if the home has been rented for many years and damage has occurred over time, mainly as a result of the age of the home and any furniture? Can the landlord deduct compensation or repairs from the deposit?
– Compensation can only be claimed for damage, but not for normal wear and tear, replies Botolfsen.
Conciliation appeal possible
– What can you do if you disagree with the amount the landlord deducts from the deposit?
– For claims other than documented non-payment of rent, it requires either the parties to agree or a judgement, says the lawyer.
– The tenant can demand payment of the deposit amount by sending a message to the bank, and then the bank must notify the landlord with a deadline of five weeks to take out a summons or settlement complaint, and if this has not been submitted, the amount will be paid.
– What disputes do you most often see in connection with deposits, and how are they usually resolved?
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– Most of them relate to maintenance, damage and possibly late payment for electricity, replies the Langseth partner.
Create a protocol
– What advice do you have for tenants when the landlord requires a deposit?
– The landlord should always take a deposit, while the tenant must ensure that the amount remains in a deposit account in the bank, says Botolfsen.
– The costs of this account must be covered by the landlord.
The lawyer further recommends that the tenant speak to the landlord at the end of the tenancy, and possibly take out a settlement complaint, if no agreement is reached on the amount repaid.
– The best thing is to draw up a takeover protocol at the start and end of the tenancy, where any defects or damage are described, he adds.
– It can then be agreed how much of the deposit is to be paid to the landlord and that the rest is to be released to the tenant. If this protocol is sent to the bank, they will deal with it.
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Feel free to use a lawyer
– How useful would it be to use a lawyer in connection with disputes about the deposit?
– There will always be a question of cost, based on the size of the amount that is disagreed on, notes Botolfsen.
– At the same time, we experience that the other party often gives up if they meet resistance.
– What kind of legal fees are we talking about, and who pays them?
– The losing party in a dispute must normally pay the costs to a lawyer, but for claims of less than NOK 200,000, what must be paid is very limited; this so that you risk paying your own costs, says Botolfsen.
– Often it is best to enter into a settlement in order to finish quickly. The problem can often be that the other party tries, even if the case is bad, to push for a settlement.
This article was previously published in Finansavisen.
