Security Deposit (Waarborgsom)

The 'Waarborgsom': A Landlord's Insurance

The security deposit, known in Dutch as the waarborgsom, is a standard feature of almost every rental agreement in the Netherlands. Its purpose is to provide the landlord with a financial buffer against potential damages to the property beyond normal wear and tear, or to cover unpaid rent at the end of the lease. For decades, the amount a landlord could ask for was unregulated, leading to exorbitant demands of three, four, or even six months' rent, creating a significant barrier to entry for many tenants. However, the Wet goed verhuurderschap (Good Landlordship Act), effective from July 1, 2023, has brought much-needed regulation to this practice. For all new rental contracts, the security deposit is now legally capped at a maximum of two times the basic monthly rent (kale huur).

Despite this new cap, the waarborgsom remains one of the most common sources of disputes between landlords and tenants. The core of the conflict almost always arises at the end of the tenancy when the landlord wants to make deductions. What constitutes 'damage' versus 'normal wear and tear' (normale slijtage) is highly subjective. A scuff mark on a wall, a worn patch on the carpet, or faded paint are typically considered wear and tear. A large hole in the wall, a broken window, or a deep wine stain on the floor are clearly damages. The burden of proof lies with the landlord, which is why a detailed move-in inspection report (opleveringsrapport) with photos, signed by both parties, is absolutely essential for protecting both the tenant and the landlord.

The Interest Question: A Common Misconception

A frequent point of confusion, especially for expats from jurisdictions like Germany or parts of the US, is the issue of interest. Is a landlord required to pay the tenant interest earned on the security deposit? The short and definitive answer in the Netherlands is no. Dutch rental law (specifically, Article 7:261b of the Civil Code) does not contain any provision that obligates the landlord to place the deposit in a separate, interest-bearing account or to refund it with accrued interest. The landlord is free to hold the money in any account they choose. While a tenant might argue that it seems unfair for a landlord to benefit from their money for years, there is currently no legal basis to claim interest on a security deposit. Any website or person suggesting otherwise is misinformed about Dutch law.

The Return of the Deposit

The Wet goed verhuurderschap also tightened the rules for the return of the deposit. The landlord must return the waarborgsom within 14 days after the termination of the rental agreement, provided no damages or rent arrears have occurred. If the landlord intends to make deductions, they must provide the tenant with a full, itemized list of the costs within 30 days of termination and return the remaining portion of the deposit. A landlord cannot simply decide to keep the entire deposit without providing specific, verifiable invoices for repairs. If a landlord unjustly withholds the deposit, a tenant's recourse is to send a formal demand letter (sommatiebrief) and, if that fails, to initiate legal proceedings, often through a debt collection agency or the courts.