When a tenancy ends, the keys are handed back and both sides look at the same flat. Then they disagree about it. Most deposit disputes don't involve unpaid rent at all. They come down to one question: is this normal wear and tear, or is it damage?

This guide sets out the general principle, gives examples from both sides, and lists the evidence that usually settles the matter. Rules differ from country to country, so treat it as a starting point, not legal advice.

What a deposit is for

In most European markets the general rule is the same. A deposit is security for what the tenant owes when they leave. That usually means:

  • unpaid rent
  • unpaid utilities and service charges the tenant was responsible for under the lease
  • damage beyond normal use, to the property, its fixtures or the furniture listed in the lease
  • sometimes specific obligations the lease spells out, such as professional cleaning or repainting, where the law allows such terms

What a deposit does not cover is ordinary ageing. A home that has been lived in for three years looks lived in. UK guidance from Propertymark describes fair wear and tear as the gradual deterioration that comes from a tenant's normal, reasonable use. That idea turns up, in different words, in most legal systems.

A deposit isn't a penalty either, and it isn't a fund for improvements. The landlord shouldn't end up better off than at the start of the tenancy.

Examples on each side of the line

Usually wear and tear Usually damage
Paint slightly faded or marked near light switches Burns on a worktop, carpet or sill
A few small nail or picture-hook holes Large holes from a TV wall mount or shelving brackets
Carpet flattened along the walking route Pet urine stains, chewed doors, scratched-through flooring
Loose hinges or worn door handles after years of use A broken door or a cracked basin
Curtains bleached by the sun Walls painted a new colour without permission
Light scuffs on the floor under the chairs Deep gouges from dragging furniture
Grout gone a little grey over time Mould caused by never airing the flat, where that can be shown

The last row needs care. Damp and mould often come from the building itself, such as poor insulation or a leak, and that's the landlord's problem, not the tenant's. Our article on damp and mould this month covers how to tell the causes apart.

Two tests that settle most cases

1. Degree or kind?

Ask whether this is more of what normal living does, or something normal living doesn't do at all.

A few pin holes are a matter of degree. Everyone hangs pictures. Six large anchor holes and a torn-out plug are a different kind of thing. Slightly faded paint is degree. A wall painted dark purple without agreement is kind. If no ordinary household would leave that mark, it's probably damage.

The length of the tenancy and the number of people living there count as well. Five years with a family of four leaves more wear than one year with a single tenant, and that's still fair.

2. How old was the item?

Even when something really is damaged, the tenant pays for the loss, not for a brand-new replacement. Suppose a carpet was already eight years old at move-in and would have needed replacing soon anyway. A stain on it doesn't justify charging the full price of a new carpet. At most it justifies a share that reflects the carpet's remaining useful life.

A simple way to think about it:

  • Expected lifespan of the item (paint, carpet, mattress, appliance)
  • Age at the end of the tenancy
  • Remaining value = the share of its life that was left

If a paint job is expected to last about five years and the walls were painted four years ago, the tenant shouldn't pay for a whole redecoration. UK deposit schemes call this apportionment. Charging for a better result than the original is betterment, and Propertymark and the Deposit Protection Service both warn against it. Ask, too, whether a repair or a cleaning would do. If cleaning the carpet fixes the problem, the tenant isn't paying for a new one.

The evidence that decides disputes

The argument is often lost or won before the tenant even moves in. The side with clear, dated records usually prevails.

At move-in

  • A written handover report, room by room, signed by both sides, noting existing marks, holes, stains and defects
  • Dated photos or a video walkthrough, with close-ups of anything already worn
  • Meter readings for electricity, gas, water and heating, photographed
  • The age and condition of key items, where known ("carpet fitted 2019", "walls painted spring 2024")

At move-out

  • The same report again, in the same order, so each room can be compared line by line
  • New photos from the same angles
  • Final meter readings, photographed on the day

For each deduction

  • A quote or invoice for the repair or cleaning
  • An itemised settlement: what was deducted, why, how much, and what was paid back. A lump sum such as "€300 for condition" invites a dispute. A list such as "worktop burn, replacement section, invoice attached, 50% for age" usually doesn't.

In LeasingTrack, handover reports, photos and invoices can be kept with the lease they belong to, so they're in one place when the tenancy ends, maybe years later.

Why the final utility bill can delay the return

In many countries utilities are billed in advance or on estimates, and the final settlement arrives weeks or months after move-out. If the tenant paid utilities through the landlord, or the accounts are in the landlord's name, the real amount owed may not be known on handover day.

A fair approach:

  • Agree in the lease how the final utility bill will be handled
  • Return the undisputed part of the deposit promptly
  • Hold back only a reasonable estimate of the outstanding bill, based on the meter readings
  • Settle the rest, with a copy of the bill, as soon as it arrives

Holding back the whole deposit for months over a bill of a few tens of euros causes needless friction, and in some countries it may break deadlines set in law.

Hungary in brief

Under the Hungarian Civil Code the tenant must use the property as intended and as the lease says. The usual reading, shared by Hungarian law firms such as Kalota Ügyvédi Iroda, is that deterioration from normal use is not grounds for keeping back the deposit unless the parties agreed otherwise. In practice, a landlord who wants the tenant to pay for repainting or professional cleaning at move-out should say so clearly in the written lease. Other practitioners stress the same point: only obligations written into the contract are secured by the deposit. Hungarian sources differ on details such as the maximum deposit and when it must be returned, so check the current law and your own lease with a lawyer before relying on a specific figure.

A quick checklist before you deduct (or dispute)

  1. Is the item listed in the lease or the move-in report?
  2. Does the move-in record show it was in better condition?
  3. Is the difference one of degree (wear) or of kind (damage)?
  4. Given the length of the tenancy and the number of occupants, is this normal?
  5. How old was the item, and what share of its life was left?
  6. Would cleaning or a repair do instead of replacement?
  7. Is there a quote or invoice?
  8. Is every deduction itemised in writing?
  9. Has the undisputed part been returned?

If the answers are clear, most disagreements end with a conversation. If they aren't, and the amounts matter, get advice. Deposit rules, deadlines and dispute procedures differ by country, and some countries have deposit schemes or mediation services. A local lawyer or tenants' or landlords' association can tell you where you stand. It's also worth walking through the autumn maintenance checklist mid-tenancy, because small problems fixed early don't end up as deposit arguments later.