Security Deposit Recovery from Landlord Under Philippine Law

(Residential & commercial leases; how to get your money back, what deductions are lawful, and what to do if the landlord won’t return it.) Not legal advice.

1) What a “security deposit” legally is (and isn’t)

Purpose. A security deposit is tenant’s money held in trust to answer for lawful unpaid obligations under the lease (e.g., unpaid rent/charges, utility arrears, repair of tenant-caused damage, keys/access devices not returned, agreed liquidated damages).
Not advance rent. Unless your lease clearly says otherwise, the deposit is not payment for future rent and should not be automatically applied to the “last month.”
Return expectation. When the lease ends and you’ve complied with your obligations, the landlord must account and return the unused balance of the deposit. If the contract is silent on timing, the return should be made within a reasonable period after move-out (commonly 15–30 days if utilities clearances are quick; longer only if objectively needed to obtain final bills or repairs supported by receipts).

2) What a landlord may lawfully deduct

Allowable:

Unpaid rent/charges that are due and demandable under the lease at the time of move-out.
Utilities (electricity/water/association dues/cable/internet) that remain unpaid and are for your consumption (attach final bills).
Repair costs for tenant-caused damage or missing items beyond normal wear and tear, supported by receipts/quotes and a move-out inspection report.
Professional cleaning/pest remediation only if (a) required by the lease or (b) you left the unit unreasonably dirty/infested beyond ordinary use.
Contractual fees (e.g., early termination fee or liquidated damages) if clearly stipulated and not unconscionable.

Not allowable:

Normal wear and tear (ordinary deterioration from reasonable use): faded paint, minor scuffs, loose door hinges, hairline tile grout discoloration, normal appliance aging, small nail holes (unless lease bans them and charges were agreed).
Upgrades or betterments (e.g., full repaint to change color/“brand new” refresh) unless damage beyond wear and tear necessitated it.
Charges without documentation (no bill, no receipt, no inspection finding).
Double deductions (e.g., charging both “last month’s rent” and also applying the deposit as last month).

Burden of proof: The landlord should justify deductions with documentation. Ambiguities are typically read against the party asserting a deduction without proof.

3) Your move-out playbook (to protect the deposit)

Give proper notice to terminate (as the lease requires).
Set a joint inspection (pre-final) so you have time to cure items.
Return all keys/access devices, parking passes, and obtain a turnover receipt.
Settle/transfer utilities and secure final bills or a “zero-balance” letter.
Photograph/video the unit (timestamped) after cleaning and just before hand-over.
Request a written account of the deposit within a specific period (e.g., 15 days), with supporting receipts. Provide your bank details for refund.

4) Timing, interest, and set-off

Timing: If the lease sets a return period (e.g., 30 or 60 days after move-out), that governs. If silent, “reasonable time” applies—long enough to close bills and modest repairs, not to fund capital improvements or await the next tenant.
Interest: If the contract says the deposit is non-interest-bearing, it’s usually honored. However, once due and the landlord unreasonably withholds the refund, legal interest (6% p.a.) can accrue from the date of demand on the amount wrongfully withheld.
Set-off/compensation: Either party may offset mutual, due, liquidated amounts (e.g., you owe ₱5,000 utilities; landlord owes ₱50,000 deposit ⇒ pay back ₱45,000).

5) Residential rent-control notes (if applicable)

Some residential units fall under rent-control rules (periodically updated). These rules commonly cap advance rent and deposits and prohibit excessive charges. Even when covered units allow a security deposit, retention beyond what’s necessary or using the deposit to impose unlawful fees is not allowed. (Check your coverage; commercial spaces are not under rent-control.)

6) Commercial lease nuances

Fit-out and reinstatement. If you altered the premises, the lease often requires reinstatement to base condition. Landlord may deduct actual, reasonable reinstatement costs per contract.
Common-area/condo dues. Unpaid CAM/condo dues attributable to your occupancy can be charged if the tenant bears them under the lease.
Make-good standards. Many commercial forms list specific deliverables (e.g., remove partitions, cap MEPF lines, repaint to white). Deductions must align with that list—not landlord’s elective upgrades.

7) Common landlord defenses—and how to counter

“We’ll wait for the next tenant to see all defects.” Demand specifics now. The deposit secures your breach, not future wear-and-tear by others.
“Repainting is standard.” Repainting is an owner’s refresh, not your liability unless heavy marks/unauthorized colors/defacement justify it or the lease says repainting is tenant’s obligation.
“Deep cleaning fee is policy.” Policies don’t override the law: fees must be contractual and tied to actual condition.
“We already used it for last month’s rent.” If the lease forbids such application (common), landlord cannot unilaterally do so.
“No receipts yet.” Reasonable short delay is fine; indefinite withholding without documentation isn’t.

8) Demand, conciliation, and suit (step-by-step recovery)

Step 1 – Final demand letter (10–15 days to pay).

Itemize the deposit, state move-out date, attach evidence (photos, turnover receipt, zero-balance utilities), demand the exact amount and bank details, and warn of legal interest and costs.

Step 2 – Barangay conciliation (for most residential disputes).

Required if both parties reside in the same city/municipality and are natural persons (or the authorized representative of a small enterprise) and no statutory exception applies. If either party resides elsewhere, or the landlord is a corporation and you’re suing it at its principal office city, conciliation may be not required—but confirm first.
If conciliation fails, secure a Certificate to File Action.

Step 3 – File a Small Claims case (fastest for pure money claims).

Ideal for deposit recovery + interest + costs. Lawyers don’t appear; the court uses simplified forms. (Current limits are generous; your deposit will almost always fit.)
Attach your lease, move-out evidence, demands, and barangay certificate (if required).

Alternative: If the lease contains arbitration or venue stipulations, follow those procedures, unless illegal or inapplicable.

9) Special cases

Early termination by tenant. If you broke a fixed term and the lease imposes reasonable liquidated damages, the landlord may deduct that amount—but must still account and return any excess.
Sale of the property during your lease. The new owner steps into the lessor’s shoes and takes the deposit obligation. Upon turnover of ownership, your deposit should be endorsed (document this in writing).
Co-tenants/roommates. Decide who receives the refund and provide a joint instruction to the landlord, or you risk internal disputes.
Corporate tenants. Use board/authority documents for signatories; the claim is still a sum of money case.
Fixtures you installed. If removable without damage, you generally may take them. If they accede to the property or you agreed they’ll stay, they’re the landlord’s—not deductible unless damaged removal caused landlord’s loss.

10) Evidence checklist (winning file)

Signed lease + amendments/house rules
Proof of rent & charge payments (ORs, bank slips)
Move-out notice, inspection reports, turnover receipt
Photos/videos of condition on move-out day
Final utility bills / clearance / meter photos
Demand letters and proof of receipt (email read receipt, courier delivery, or messenger acknowledgment)
Any landlord deductions with receipts (validate reasonableness and causation)

11) Money math (examples)

Example A – Simple refund Deposit ₱40,000 Less unpaid water ₱800 (bill attached) Less lost access card ₱500 (per schedule) = Refund ₱38,700 within 15 days; 6% annual legal interest applies from demand if unpaid after due date.

Example B – Disputed repainting Landlord claims full repaint ₱25,000 after a 2-year tenancy with no damages.

Unless lease requires tenant-funded repaint or walls have excessive marks/unauthorized colors, treat as wear and tear → not deductible. Demand refund; if refused, proceed to small claims.

12) Templates (short, editable)

A) Final Demand for Refund of Security Deposit

Date

[Landlord Name/Address]

Re: Refund of Security Deposit – [Unit/Address]

I ended my lease effective [date], returned the premises and keys, and settled utilities (see attached). Please refund my security deposit of ₱[amount], less any documented lawful deductions, within [10] days to [bank details].

If not received by [date], I will file for recovery with legal interest (6% p.a. from demand) and costs.

[Name / Contact]

B) Response to Undocumented Deductions

Kindly provide receipts/inspection findings supporting the following claimed deductions: [list]. Absent documentation and a lease basis, I dispute them as normal wear and tear or non-contractual. I reiterate demand to remit the ₱[net amount] within [5] days.

13) Frequent mistakes (avoid these)

Skipping the joint inspection and surrender receipt.
Leaving utilities uncleared, inviting inflated “estimates.”
Agreeing verbally to “use deposit for last month,” then being charged again.
Accepting lump-sum “policy” deductions without receipts or lease basis.
Letting months pass without written demand, delaying interest accrual and weakening your case.

14) Fast answers (FAQ)

Can the landlord keep the entire deposit because I ended early? Only if the lease provides clear liquidated damages in that amount; otherwise, the landlord must show actual loss and refund the excess.

How fast must the landlord return it? Follow the lease. If silent, “reasonable time” after move-out and final bills. Unreasonable delay after demand can trigger 6% legal interest.

Is repainting automatically my cost? No—wear and tear is the owner’s burden unless the lease shifts it or you caused excess damage.

Do I need a lawyer? For small claims, lawyers don’t appear. Bring your documents. For higher amounts or complex commercial leases, consult counsel.

15) Bottom line

The security deposit is your money held to secure specific obligations, not a slush fund.
Landlords must document deductions and return the balance within a reasonable time (or the period in your lease).
If they don’t, demand in writing, try barangay conciliation when required, and file small claims for quick recovery with legal interest.