Has a landlord refused to return a security deposit after the lease ended? Or has a tenant stopped paying rent despite repeated reminders?
Many rental disputes involve only a few thousand or tens of thousands of New Taiwan Dollars. Hiring a lawyer may cost more than the amount in dispute, yet doing nothing often means accepting the loss.
In situations like these, a small claims lawsuit can be an effective solution. However, filing a lawsuit is not usually the cheapest first step. In most cases, the most cost-effective approach is to first make a formal demand, then attempt mediation, and only file a small claims lawsuit if the dispute still cannot be resolved.
What Does the Law Say?
Code of Civil Procedure, Article 436-8:
“1. An action seeking the payment of money, fungible goods, or negotiable securities, where the amount or value in dispute does not exceed NT$100,000, shall be subject to the Small Claims Procedure prescribed in this Chapter.
2. If the court considers the Small Claims Procedure inappropriate for the case, it may, on its own motion, rule that the case shall instead proceed under the Summary Procedure, and the same judge shall continue to hear the case.
3. No appeal may be taken from the ruling described in the preceding paragraph.
4. For actions under Paragraph 1 where the amount or value in dispute does not exceed NT$500,000, the parties may, by written agreement, choose to apply the Small Claims Procedure.”
✨ Plain explanation: Taiwan's Small Claims Procedure is mainly designed for monetary claims of NT$100,000 or less, such as recovering a security deposit, collecting unpaid rent, or seeking compensation for repair costs.
If a case is legally or factually more complicated, the court may decide that it should be handled under the Summary Procedure instead. On the other hand, disputes worth more than NT$100,000 but not more than NT$500,000 may still use the Small Claims Procedure if both parties agree in writing.
⚖️ Legal Source: Code of Civil Procedure Article 436-8 – Law.moj.gov.tw
Which Rental Disputes Can Be Resolved Through a Small Claims Lawsuit?
A small claims lawsuit is not simply for "small disputes." The claim must generally involve the payment of money, fungible goods, or negotiable securities.
Common examples in rental disputes include:
- A landlord refuses to return a security deposit of NT$100,000 or less after the lease ends.
- A tenant owes less than NT$100,000 in unpaid rent or other rental charges.
- A landlord or tenant seeks reimbursement of repair costs under NT$100,000 for damage to the property or its fixtures.
- A tenant requests reimbursement after paying for repairs that the landlord failed to perform.
- A dispute over liquidated damages for early lease termination where the claimed amount is under NT$100,000.
However, claims requesting that someone move out of the property, return possession of the premises, or remove renovations or installations are not purely monetary claims and therefore may not qualify for the Small Claims Procedure.
The Cheapest Way to Resolve a Rental Dispute
Step 1: Send a Formal Written Demand
If a security deposit has not been returned or rent remains unpaid, the first step is usually to send a clear written demand through LINE, email, or another communication method that can be preserved as evidence.
For example:
"The lease ended on July 31. Please return the NT$30,000 security deposit no later than August 10."
The important point is to clearly state what is owed, how much is owed, and the deadline for payment. These messages may later become valuable evidence during mediation or litigation.
If the other party continues to ignore the request, the next step is often to send a Taiwan Post Certified Letter (存證信函). Although a certified letter is not a court judgment and cannot directly seize assets, it provides strong evidence that a formal demand for performance was made.
Step 2: Apply for Free Mediation
If private negotiations fail, either party may apply for mediation through the local township, city, or district mediation committee, or file a mediation application with the district court's summary division.
Mediation conducted by local mediation committees is generally free of charge. Once a mediation agreement is confirmed by the court, it has the same legal effect as a final and binding civil judgment. If the other party later refuses to comply, compulsory enforcement may be requested.
Court mediation also allows many disputes to be resolved without paying the ordinary filing fees required for litigation.
For disputes involving security deposits, unpaid rent, or repair expenses where both sides are still willing to negotiate, mediation is often faster and less expensive than immediately filing a lawsuit.
Step 3: File a Small Claims Lawsuit
If mediation fails, or if the other party refuses to cooperate altogether, filing a small claims lawsuit may be the next option.
In most situations, the lawsuit should be filed with the district court having jurisdiction over the defendant's domicile. For disputes arising from a lease agreement, jurisdiction may also depend on the agreed place of performance under the contract.
Taiwan's Judicial Yuan provides standardized complaint forms for small claims cases. After completing the information regarding the plaintiff, defendant, amount claimed, facts of the case, and supporting evidence, the lawsuit can generally be filed without hiring a lawyer.
What Documents Should You Prepare for a Small Claims Lawsuit?
Although the Small Claims Procedure is simpler than ordinary civil litigation, the court still decides cases based on evidence, not on one party's statements alone.
Common evidence in rental disputes includes:
- The lease agreement
- Bank transfer records showing payment of the security deposit or rent
- Move-in or move-out inspection records
- LINE conversations or email correspondence
- Written demand notices
- Photographs of the property
- Repair quotations
- Receipts and invoices
It is also helpful to organize the evidence in chronological order and briefly explain what each document proves. For example:
Exhibit 3: Move-out inspection record showing that the rental property was returned on July 31.
In addition, make sure the defendant's full name and service address are correct. If court documents cannot be successfully served because the address is incomplete or outdated, the proceedings may be delayed.
If more information is needed about the filing process, required documents, or court procedures, the Judicial Yuan also provides an official guide:
🔮 Official Source: Judicial Yuan – Small Claims Procedure and Filing Guide
How Much Does a Small Claims Lawsuit Cost?
For property claims of NT$100,000 or less, the first-instance court filing fee is currently NT$1,500. Therefore, a plaintiff generally needs to prepay NT$1,500 when filing a small claims lawsuit.
The court will ultimately determine which party is responsible for the litigation costs.
If the plaintiff wins the case entirely, the court will usually order the defendant to bear the litigation costs. If each party prevails on part of the claim, the costs may be allocated proportionally.
If the parties reach a settlement before judgment, they may apply for a refund of two-thirds of the filing fee. Likewise, if the case is successfully resolved through court mediation, the prepaid filing fee may also be refunded in accordance with the law.
What Does the Judge Look At During Trial?
A small claims lawsuit is not about which party argues more passionately. The judge focuses on whether the legal claim is supported by credible evidence.
Take a security deposit dispute as an example. A tenant should be prepared to prove that:
- the security deposit was actually paid;
- the lease has ended; and
- the rental property has been returned to the landlord.
If a landlord argues that part of the security deposit should be deducted for cleaning costs, repair expenses, or unpaid charges, the landlord should also provide supporting evidence, such as photographs, repair estimates, invoices, or receipts.
Simply presenting a lump-sum amount without explaining how it was calculated may not be enough. Breaking down each item with supporting evidence makes it much easier for the judge to understand and evaluate the claim.
Can You Appeal a Small Claims Judgment?
In principle, a party who disagrees with the first-instance judgment may file an appeal within 20 days after the judgment has been served.
However, appeals in small claims cases are much more limited than those in ordinary civil litigation.
The appellant must specifically argue that the original judgment violated the law. Simply disagreeing with the outcome is not enough to obtain a second review of the facts.
As a general rule, new claims or new evidence that could have been presented during the first trial cannot be introduced on appeal. Furthermore, once the second-instance court issues its judgment, no further appeal is permitted.
For this reason, it is important to prepare and submit all key evidence during the first-instance proceedings.
What If the Other Party Still Refuses to Pay After You Win?
Winning a lawsuit does not automatically mean the money will appear in your bank account.
Once you obtain a judgment that is enforceable, if the losing party still refuses to pay, you may apply to the court's Civil Enforcement Division for compulsory enforcement. Depending on the circumstances, the court may seize the debtor's bank accounts, garnish wages, or enforce against other assets.
For this reason, it is worth considering not only whether the evidence is strong enough before filing a lawsuit, but also whether the other party has assets that can realistically be enforced against. Even after winning the case, recovering the money may still take time if the debtor has little or no property.
🏴☠️ Related Reading: Do Rental Disputes Always Need Court?
🗺️ Related Reading: What Happens When a Rental Dispute Goes to Court?
⚓ Related Reading: What Is a Certified Mail Notice? When Should Landlords and Tenants Send One in Taiwan?
💎 Related Reading: What Is a Payment Order in Taiwan?
Conclusion: A Small Claims Lawsuit Should Usually Be the Last Step, Not the First
Taiwan's Small Claims Procedure is designed to provide an affordable and straightforward way to resolve everyday monetary disputes. With standardized complaint forms and relatively simple procedures, it is well suited for rental disputes involving security deposits, unpaid rent, repair costs, and other claims of relatively small value.
However, filing a lawsuit is not always the most cost-effective first step. Keeping written records of payment demands and attempting mediation before going to court will often save both time and money. A small claims lawsuit is generally most appropriate when negotiations have failed, mediation is unsuccessful, or a legally binding court decision is necessary.
Regardless of which dispute resolution method is chosen, the outcome usually depends on the quality of the evidence. A well-organized lease agreement, bank transfer records, move-out inspection reports, photographs, and communication records are often far more important than lengthy arguments. While the procedure may be simplified, the need for solid evidence remains the same.
