Legal & compliance
Caution deposit best practices
The caution deposit protects you against damage beyond normal wear and tear. Set it fairly and you'll get noticeably more applicants; set it too high relative to the local market and genuinely good tenants will simply look elsewhere before ever reaching out to you at all.
Think of the deposit as risk management, not extra income
A caution deposit fundamentally exists to cover a specific, clearly bounded risk - damage beyond normal wear and tear - not as a way to pad your effective return on the property or build in a margin for unrelated costs. Hosts who treat it as risk management, sized to the genuine risk of the specific unit, consistently attract stronger applicants than hosts who treat it as an additional revenue line, since applicants can tell the difference between a fair deposit and an inflated one.
A fair deposit policy becomes part of your reputation over time
As you host more tenants, your track record on deposit fairness - reasonable amounts, prompt returns, clear justification for any deductions - becomes part of how you're perceived, both informally through word of mouth and formally through your own review and reference history on the platform. This reputation compounds, making it progressively easier to attract strong applicants the longer you maintain a genuinely fair, transparent approach to deposits.
Set the deposit before you set the rent, not after
Decide on a fair, market-appropriate deposit amount as part of your initial pricing exercise, rather than treating it as an afterthought once the headline rent is already settled. Applicants evaluate the two figures together, and working them out together from the start avoids the awkward situation of realising late that your combined upfront cost has quietly drifted outside what similar listings in your area are actually asking for.
A rushed deposit conversation at move-out breeds distrust
If the deposit process at move-out feels rushed or improvised, even a fair outcome can leave a tenant feeling suspicious of how the decision was reached. Slow down at this specific moment, walk through your reasoning clearly if there's any deduction involved, and make sure the tenant genuinely understands the basis for the decision rather than just receiving a final number with no real explanation attached to it.
Partial deductions are usually better handled than all-or-nothing decisions
Very few move-out situations are genuinely all-or-nothing - most involve some legitimate wear and some genuine damage mixed together, and a thoughtful, itemised partial deduction reflecting that mix is usually both fairer and easier to defend than an all-or-nothing decision at either extreme. Itemising each specific line, even briefly, also makes the reasoning far easier for a tenant to actually follow and accept.
A good deposit outcome is one both sides can genuinely accept
The measure of a well-handled deposit isn't necessarily maximising what you retain - it's reaching an outcome that's clearly justified by the evidence and that a reasonable tenant, looking at the same photos and the same agreement, would also recognise as fair. Aiming for that standard consistently, rather than for the maximum defensible deduction each time, is what actually builds the kind of reputation that benefits you across every future tenancy.
One to two months' rent is the norm
Most Lagos and Abuja listings typically ask for one full month's rent as a caution deposit. Two months is reasonable for furnished units with higher-value fittings, where the potential cost of damage is genuinely higher. Going meaningfully above this range without a clear reason narrows your applicant pool noticeably, since deposit size is one of the first numbers prospective tenants compare across listings when shortlisting.
State exactly what it covers
Damage beyond ordinary normal wear, unpaid utility bills, and missing or broken fixtures are all standard categories worth naming. Be specific in your listing and in the tenancy agreement itself so there's no argument later about what a deduction can reasonably cover - vague deposit terms are one of the most common sources of tension at move-out, almost always because the two sides had different assumptions about scope going in.
Deductions need evidence
Photograph the property at move-in and move-out, ideally as part of a joint walkthrough with the tenant present for both. If you deduct from the deposit for any reason, you'll need to show clearly what changed between the two points - a deduction without supporting evidence is far more likely to be disputed, and far harder to defend, than one backed by a clear, dated before-and-after photo comparison both sides can review together.
Communicate the return timeline upfront
Tell tenants clearly at move-in roughly how long deposit returns typically take after move-out, and exactly what the process looks like from their side. A tenant who genuinely knows what to expect is far more patient than one left wondering whether the deposit is even being processed at all - uncertainty, more than the wait itself, is usually what quietly turns a routine return into a tense, frustrating one.
Distinguish wear and tear from damage
Faded paint, minor carpet wear, or a slightly loosened door handle from years of normal, everyday use are ordinary wear and tear, not damage, and genuinely shouldn't be deducted from the deposit - being clear about this distinction, and applying it consistently, builds a reputation that attracts better applicants over time, since word travels between tenants about landlords who are fair versus ones who deduct for anything they can find.
Consider a deposit alternative for strong applicants
For a particularly strong, thoroughly verified applicant, a slightly reduced deposit can be a genuinely reasonable way to close a lease faster without meaningfully increasing your actual real-world risk - a tenant's overall profile and references often say more about reliability than the deposit amount does. This isn't right for every situation, but it's worth considering rather than applying the exact same deposit rigidly regardless of who's applying.
If a dispute does arise, FlatCover backs the deposit
For damage that genuinely exceeds what the deposit alone can reasonably cover, FlatCover is the additional layer sitting behind it. Understanding clearly where the deposit's own coverage ends and FlatCover's protection begins means you're never caught without a confident answer for a genuine shortfall, and it's worth knowing this exact boundary well before an actual claim situation forces you to work it out under real time pressure.
