This article is for general informational purposes in the Philippine context and is not a substitute for advice from a licensed lawyer. Facts matter a lot in deposit disputes, so treat this as a guide to the rules and typical outcomes.

1. The Security Deposit: What It Is and What It’s For

In Philippine leasing practice, a security deposit is money the tenant gives the landlord to secure performance of lease obligations—most importantly:

unpaid rent or utilities,
damage to the property beyond normal wear and tear,
costs of restoring the unit to the condition required by the lease.

Security deposits are not automatically “free money” for the landlord, nor are they automatically returnable in full. They are held in trust-like fashion to answer for specific lease-related liabilities.

Key idea: the landlord may deduct from the deposit only for lawful, provable, lease-related charges.

2. Main Legal Sources in the Philippines

Security deposit deductions are governed by a mix of:

Civil Code of the Philippines (lease rules)
- The lease is a contract; parties must comply with its terms as long as they are not contrary to law, morals, good customs, public order, or public policy.
- The lessor must maintain the lessee in peaceful and adequate enjoyment of the premises, and the lessee must return the thing leased after the lease ends.
Contract law principles (obligations and damages)
- A landlord claiming deductions is essentially claiming damages or reimbursement for tenant breach.
Rent Control Act (Republic Act No. 9653) and implementing rules
- Applies only to certain residential units below a prescribed rent threshold (the threshold changes by regulation).
- It does not abolish security deposits, but affects some residential lease practices and protections.
- If the unit is above the threshold or is a commercial lease, RA 9653 usually doesn’t apply; the Civil Code/contract controls.
Local ordinances / condominium rules
- Sometimes add procedures (move-out clearance, admin fees, etc.) but cannot override national law.

Bottom line: deposit deduction disputes are primarily contract + Civil Code issues unless the unit is rent-controlled.

3. The Standard Rule: “Wear and Tear” vs. “Damage”

A landlord can deduct repair costs caused by the tenant’s fault or negligence, but not ordinary wear and tear.

3.1 Ordinary Wear and Tear (Not Deductible)

These are expected deterioration from normal use over time, such as:

minor wall scuffs,
natural fading of paint,
loose door handles from age,
slight floor dullness,
small nail holes from hanging pictures (depending on lease terms and reasonableness).

Landlord bears these as ownership costs.

3.2 Tenant-Caused Damage (Deductible)

Examples commonly considered chargeable:

broken tiles due to misuse,
holes or large stains on walls beyond normal use,
damaged fixtures or appliances from neglect,
missing provided items (curtains, keys, remote controls, furniture),
pet damage beyond typical living wear,
unauthorized alterations requiring restoration.

Tenant pays because it’s beyond normal usage or violates the contract.

4. What the Lease Contract Can (and Can’t) Do

4.1 Lease Terms Usually Control

Philippine law respects freedom of contract. Typical valid clauses include:

requirement to return the unit in the same condition, “reasonable wear and tear excepted,”
obligation to repaint if paint is badly stained or if tenant installed/removed fixtures,
authorization for landlord to deduct unpaid bills or repair costs from deposit,
move-out inspection procedure.

4.2 Clauses That May Be Invalid or Unenforceable

Even if written, clauses may fail if unconscionable or contrary to law/public policy, e.g.:

automatic forfeiture of entire deposit for any minor defect,
deductions without notice or basis,
shifting landlord’s own maintenance obligations to tenant (like structural repairs).

Courts and mediators often look for reasonableness and actual proof of loss.

5. Burden of Proof: Who Must Prove What?

In deposit disputes, the landlord bears the burden to justify deductions because:

the deposit is tenant’s money unless a lawful claim exists,
deductions are a form of damages/reimbursement.

So a landlord should be able to show:

existence of damage or unpaid obligation,
tenant responsibility,
reasonable cost of repair/restoration,
that the deduction matches actual loss (not a penalty).

The tenant, in turn, can counter by proving:

damage is just wear and tear,
damage existed before occupancy,
repairs are overpriced or unrelated,
landlord failed to maintain property, causing deterioration.

6. The Proper Process for Deductions After Move-Out

While the Civil Code does not set a rigid step-by-step process, best practice (and what courts tend to favor) includes:

Step 1: Move-Out Inspection

Ideally joint inspection with tenant present.
Use a checklist and photos/videos.
Compare to move-in condition report.

Step 2: Written Itemization

Landlord should provide an itemized list of charges:
- what was damaged,
- why tenant is responsible,
- how much each repair costs.

Step 3: Supporting Evidence

Photos before/after.
Receipts/quotations.
Utility bills.
Condo admin charges if lease-allowed.

Step 4: Return of Balance

Remaining deposit should be returned within a reasonable time after final accounting.
“Reasonable” depends on context, but prolonged withholding without explanation can be treated as bad faith.

7. Can the Landlord Deduct for Repainting?

Often yes, but not always.

Repainting is deductible if:

lease requires tenant to repaint upon move-out and the unit is returned with excessive stains, unauthorized colors, or damage beyond wear and tear, or
tenant made alterations that necessitate repainting.

Repainting is not deductible if:

it’s routine turnover repainting after long occupancy with normal fading,
landlord repaints simply to refresh the unit for a new tenant absent tenant-caused damage,
the lease is silent and the paint condition is normal for the length of stay.

Courts commonly treat repainting as a landlord expense unless tenant’s actions made it necessary.

8. Can the Landlord Deduct “General Cleaning” or Pest Control?

Similar logic:

Chargeable if tenant left the unit extremely dirty, with trash, infestations caused by poor housekeeping, or conditions requiring special cleaning.
Not chargeable if it’s standard turnover cleaning after ordinary use.

A clause saying “tenant pays cleaning fee regardless” can be contested if unreasonable.

9. Unpaid Utilities, Association Dues, and Admin Charges

Generally deductible if:

lease says tenant must pay them,
bills are properly documented and attributable to tenant’s period of stay.

Special note:

Some condos impose move-out fees or penalties. These are deductible only if:

the lease pushes them to tenant, and
they are lawful charges (not arbitrary).

Otherwise, they remain landlord’s responsibility.

10. Partial vs. Total Forfeiture of Deposit

Landlords can deduct only what is necessary to cover:

actual repair or replacement cost,
unpaid obligations.

Total forfeiture is justified only when total proven liability meets/exceeds deposit (e.g., massive damages + unpaid rent).

If deductions exceed the deposit, the landlord may still sue the tenant for the balance, but must prove damages.

11. What If the Tenant Disagrees?

11.1 Negotiation / Demand Letters

The tenant can send a written demand:

asking for accounting,
disputing specific charges,
requesting return of balance.

Landlord should respond with evidence.

11.2 Barangay Conciliation (Katarungang Pambarangay)

For most disputes between individuals in the same city/municipality, barangay mediation is required before court unless exceptions apply (e.g., one party is a corporation in some cases, or urgent relief needed).

A deposit dispute is a classic barangay case.

11.3 Court Action

If mediation fails:

Small Claims Court (for money claims below the current threshold) is common.
No lawyers needed for small claims; fast procedure.
The judge looks heavily at documents, inspection reports, and receipts.

12. Common Scenarios and Likely Outcomes

Scenario A: Tenant stayed 3 years, paint faded, minor scratches

Likely outcome: no repainting deduction; maybe tiny repair deduction if clearly beyond wear and tear.

Scenario B: Tenant drilled large holes, painted walls black, left stains

Likely outcome: repainting and wall restoration deductible.

Scenario C: Appliances broken from age, not misuse

Likely outcome: landlord pays; no deduction unless tenant fault proven.

Scenario D: Tenant left without paying last month’s utilities

Likely outcome: deductible if bills shown.

Scenario E: Lease says “deposit automatically forfeited for any damage”

Likely outcome: clause may be reduced/ignored if seen as penalty rather than reimbursement.

13. Practical Tips

For Landlords

Do a move-in condition report with photos, signed by tenant.
Maintain records of appliance age and condition.
Provide deductions fast and in writing.
Use reasonable market rates for repairs.

For Tenants

Take photos/videos on move-in and move-out.
Request joint inspection.
Ask for receipts and itemization.
If disputing, do so in writing and try barangay mediation early.

14. Key Takeaways

Yes, landlords in the Philippines may deduct repair costs from the security deposit after move-out—but only for tenant-caused damage or unpaid obligations.
Ordinary wear and tear is not deductible.
The lease contract matters, but unreasonable penalty-type clauses can be challenged.
Landlords must justify deductions with proof and itemization.
Disputes usually go through barangay conciliation, then small claims or regular court.

If you want, tell me a specific move-out situation (length of stay, what was deducted, what damage is claimed, what your lease says). I can map it to the rules above and help you draft a clear demand/response letter.