When you pay a deposit, you are entering into a contract as a consumer with a shop or seller and rights and obligations are created for both parties to the contract. Here is a look at what you can expect when you hand over a deposit in part payment for a good or service.
What should I consider when paying a deposit?
By paying a deposit, you have entered into a contract with the retailer or seller and agreed to buy the product or service specified. As well as agreeing what you are buying, you also agree the amount of the deposit, the total price of the product or service and when the balance must be paid, and when you will receive the product or service. Ideally, all details should be written down so that both parties are clear about exactly what the product or service is and when it will be delivered or become available. Written confirmation of what has been agreed becomes particularly important if, for example, a product is delivered and is not exactly what you have ordered. A contract that has been agreed verbally is enforceable and, with no written details, you may find it harder to successfully argue that you have not received what you paid for.
If I change my mind about buying the good or service, can I get my deposit back?
The obligations of the contract work both ways and you have undertaken to buy the product or service, so the seller is not required to return the deposit simply because you have had a change of heart. For example, if you have paid a deposit to a shop to hold an item for you and you decide not to pay the balance, the shop may not have to refund you your deposit.
When do I have a right to get my deposit back?
If the seller does not adhere to the terms of the contract, you have a right to get your deposit back. For example, if a seller is unable to supply the product or service you agreed to buy, you can look for your deposit to be returned. You may also get your deposit refunded if the original agreed delivery date is delayed and you cannot agree a new, reasonable delivery date with the seller or if the seller fails to meet the new delivery date. In some cases, you may need to take legal action if the seller refuses to return your deposit even though you have a legitimate claim. If the money in dispute is less than €2,000, you can look to the Small Claims procedure to resolve the issue. It costs €25 to lodge an application with the Small Claims Registrar and the procedure is designed to handle consumer complaints quickly, inexpensively and without the need for a solicitor.
What happens to my deposit if the shop or seller goes out of business?
If the shop or business to which you have paid a deposit goes out of business, you are likely to find it very hard to get your money back. Once the company goes into liquidation or receivership, individual customers are generally towards the end of a long list of creditors looking for money to be repaid. However, if you have paid the deposit by credit card, you may be able to ask your bank or credit card company to initiate a “chargeback” and reverse the transaction.
The issue of deposits often crops up in the area of rented accommodation. Here, some specific questions arise:
When can a landlord withhold all or part of a security deposit paid for rented accommodation?
Anyone taking up rented accommodation is asked for a security deposit, generally equivalent to one month’s rent. The landlord may make deductions from this deposit or retain the deposit in full at the end of the tenancy if there is any rent outstanding, if there are any unpaid utility bills or if any damage has been done to the property beyond normal wear and tear. As a result, it is important that you only hand over the security deposit once you are happy with the terms and conditions of the lease and the state of the property. Always get a written receipt for the deposit and, if possible, take dated photos to record the condition in which you found the property at the start of your tenancy, making notes of any existing wear and tear. You should take more photos at the end of your tenancy to document the condition you left the property in.
Does my security deposit have to be returned on the day the tenancy ends?
Although the security deposit should be returned without undue delay, there is no requirement that the landlord must return the deposit as soon as you leave the accommodation. Time must be allowed for the landlord to examine the property and for any outstanding bills to be calculated.
What can I do if I feel my security deposit has been retained unfairly?
If the landlord claims that there are rent arrears, unpaid utility bills or damage to the property, you should ask the landlord to supply documentary evidence to support these claims. If you are unsuccessful in getting your deposit returned, you can make an application to the dispute resolution service of the Private Residential Tenancies Board, with complaints made online costing €15 and paper applications costing €25.