💵 How does the rental deposit system work?

In Taiwan, the rental deposit system typically involves two main components: a security deposit and the first month's rent. Here’s how it works:

1. Earnest Money

• Definition: Not always required. It’s a commitment fee paid before signing the contract to reserve the property
• Amount: Usually equivalent to part of the rent (often negotiable)
• Conditions: Tenants should ask the landlord to issue a receipt that clearly states: 
  • Amount paid
  • Names and ID numbers of payer and receiver
  • Reservation period (commonly 10–15 days, maximum 30 days)
  • Whether it will be converted into rent or the security deposit after contract signing
• Tip: If the lease is signed, the earnest money is usually deducted from the rent or deposit

2. Security Deposit

• Amount: Typically 1–2 months’ rent, though in rare cases landlords may ask for 3 months, especially in high-demand areas
• Purpose: To cover damages, unpaid bills, or lease violations
• Refund: Returned at the end of the tenancy if:
  • The property is in good condition (normal wear and tear accepted)
  • All bills (utilities, internet) are settled
  • The keys are returned
• Key deposit: A smaller amount, typically NT$500–2,000, is required for the door keys, refundable upon return of the keys (Note: This practice is not universal and should be clearly stated in the rental contract.)

3. First Month’s Rent

• Paid upfront at the start of the lease

4. Lease Termination Process

1. Notice period: Typically 1–2 months’ notice is required (check the contract)
2. Inspection: The landlord inspects the property for damages
3. Refund: The deposit is returned minus any deductions for repairs, unpaid bills, or cleaning
4. Disputes: Mediation can be sought through the Consumer Protection Agency or courts

5. Variations

• Short-term leases: Some landlords may charge a higher deposit or require a guarantor
• Student rentals: Deposits might be lower, but flexibility varies by landlord
• Popular areas (Taipei): Higher demand may lead to stricter terms

Tips

• Always document the property’s condition at move-in (photos, written checklist)
• Review the contract carefully to avoid surprises
• Negotiate terms (deposit amount, interest, refund timelines) before signing