Security Deposits in Nigeria: The Rules Nobody Follows

Security deposits are held against damage to the property or unpaid obligations at the end of a tenancy. In theory, they're the tenant's money, returned at move-out after legitimate deductions. In practice, Nigerian deposit disputes are a running joke — most tenants never see a naira back, and landlords rarely document why.

Here's how it should actually work.

How much is a normal security deposit?

There is no statutory cap. Market convention in Nigeria is:

• 10% of annual rent — the most common amount
• One month's rent equivalent — some landlords use this for monthly tenancies
• Two months' equivalent — for high-value or furnished properties

The amount must be stated clearly in the tenancy agreement. A landlord who demands 20% or more without justification is pushing the norm.

What deductions are legitimate at move-out

You can deduct for:

• Actual damage beyond fair wear and tear (broken tiles, holes in walls, stained carpets)
• Outstanding rent or service charge
• Unpaid electricity, water, or other utility bills where the tenant was responsible
• Professional cleaning if the property is left in unusable condition
• Replacement of missing items (keys, remotes) specifically listed in the tenancy agreement

What you cannot deduct for

• Normal wear and tear — faded paint, minor marks on walls, thinning carpet, worn-out hinges
• Repairs that were already needed when the tenant moved in
• Upgrades you want to make (new tiles, new kitchen) — that's capex, not deposit deduction
• "Administrative fees" — the deposit is not a tip
• Items not listed in the tenancy agreement as tenant responsibility

The documentation requirement

For every deduction, you need:

1. A photograph or video of the damage at move-out
2. A comparison against the move-in inventory (which you should have done)
3. A quote or receipt for the actual cost of repair
4. A written breakdown shared with the tenant

Without these, a tenant who disputes deductions in court will usually win.

When should the deposit be refunded?

Within 30 days of move-out is standard practice. Some agreements stipulate 14 days for less complicated tenancies. Longer than 30 days signals bad faith and gives the tenant grounds to escalate.

What if the tenant disputes the deductions?

Options in order of cost:

1. Share your documentation and try to agree
2. Mediate through the agent or a neutral third party
3. Small Claims Court (if applicable) or Magistrate Court

Most disputes settle at step 1 or 2 if the landlord has proper documentation. The ones that reach court are usually won by the party with better records.

Interest on deposits

Nigerian law doesn't require landlords to pay interest on security deposits. Some tenancy agreements provide for it voluntarily, particularly for long tenancies or high amounts. It's a small goodwill gesture that builds trust.