Caution Deposit Policy

Version: 1.0
Effective Date: 2026-05-22
Governing Law: Federal Republic of Nigeria

This policy forms part of the Kushi Terms of Service and is incorporated by reference into the Kushi Tenancy Agreement/Mandate.

1. Purpose

The caution fee is a refundable security deposit set by the host on a per-listing basis. Kushi acts as a neutral custodian — holding the caution fee in escrow on behalf of the host for the duration of the tenancy and any applicable claim window thereafter.

Kushi does not own the caution fee. It holds it as a fiduciary obligation and is obligated to disburse it to the appropriate party (host or guest) in accordance with the terms set out in this policy, the Tenancy Agreement/Mandate, and applicable Nigerian law.

2. Custody Fee

In exchange for providing escrow services, Kushi charges a custody fee of 5% of the caution fee amount, collected from the guest at the time of booking.

The custody fee is non-refundable. It is earned by Kushi at the point of booking confirmation, regardless of the eventual outcome of the tenancy or any caution claims.

Example: Caution fee = ₦300,000. Custody fee = ₦15,000. Total collected from guest = ₦315,000. Kushi retains ₦15,000; ₦300,000 is held in escrow.

The amount held in escrow for disbursement to the host is the caution fee net of the custody fee. Total host claims cannot exceed caution_fee × (1 − 0.05) (i.e., 95% of the stated caution fee).

3. Host Claim Process

A host may file a claim against the held caution fee at any time during or after the tenancy, provided the tenancy has commenced and the 14-day post-tenancy claim window has not expired (see Section 7).

Claim Rules

• Claims may be partial or full (up to the maximum claimable amount).
• Multiple claims may be filed; cumulative claims cannot exceed the maximum claimable amount.
• The maximum total claimable by the host is: caution_fee × 0.95 (net of the 5% custody fee already retained by Kushi).
• Claims must include a stated reason (e.g., property damage, outstanding utilities, breach of lease terms).
• Supporting evidence (photographs, receipts, inspection reports) is strongly encouraged and may be required in a dispute.

Claim Submission

Claims are filed through the Kushi platform. Upon submission, the system will:

1. Record the claim amount, reason, and timestamp.
2. Lock the claimed amount within the escrow balance (the balance cannot be disbursed to the guest while a claim is pending).
3. Trigger a notification to the guest (see Section 4).

4. Guest Notification and Approval

Upon the submission of any host claim, the guest will receive an immediate notification via:

• In-app push notification
• Email notification

The notification will state the claim amount, the host's stated reason, and the deadline to respond.

The guest has 5 business days to take one of the following actions:

5. Silent Guest Procedure

If the guest does not respond within the notification period, Kushi customer support will initiate a structured follow-up before any action is taken on the claim.

Escalation Steps

1. Day 1 after deadline: Kushi customer support sends a follow-up notification via in-app, email, and SMS/phone (if available).
2. Day 3 after deadline: A second follow-up attempt is made via all available contact channels.
3. Day 5 after deadline: If the guest remains unresponsive after all reasonable contact attempts, the matter is referred to the Kushi Dispute Resolution Team.

Dispute Resolution Team Discretion

If the guest remains unresponsive after the escalation sequence, the Kushi Dispute Resolution Team may, at its sole discretion:

• Approve the host's claim in full or in part, or
• Decline the host's claim,

based on the evidence submitted by the host, the tenancy record, and any other relevant information available to Kushi.

Important: This discretion is exercised by Kushi as a platform operator, not as a legal adjudicator. Kushi's decision in a silent-guest case does not preclude either party from pursuing independent legal remedies. The Tenancy Agreement/Mandate must include a clause acknowledging and accepting this process.

6. Dispute Resolution

Triggering a Dispute

A dispute is triggered when the guest formally contests a host claim through the Kushi platform within the notification period.

Dispute Fee

A fixed dispute fee of ₦10,000 is deducted from the caution escrow pot upon the opening of each dispute. This fee covers Kushi's mediation costs and is non-refundable regardless of the dispute outcome.

Mediation Process

1. Evidence Submission: Both parties are notified and given a defined period (recommended: 5 business days) to submit evidence. This may include photographs, inspection reports, communication records, receipts, and any other documentation relevant to the claim.

2. Investigation: The Kushi Legal/Dispute Team reviews all submitted evidence, the signed Tenancy Agreement/Mandate, and the tenancy history on the platform.

3. Decision: The Kushi Dispute Resolution Team renders a binding decision on the platform, determining whether to release the disputed amount (in full or in part) to the host, or to retain it for the guest.

4. Legal Referral: Where the Kushi Dispute Resolution Team determines that the matter exceeds the platform's scope of resolution, or where fraud, criminal conduct, or significant property damage is alleged, the team may recommend that the affected party pursue the matter through formal legal channels.

Legal Framework for Disputes

Disputes involving caution fee claims are governed by:

• Tenancy Law of Lagos State 2011 — Section 19 governs a landlord's obligations regarding security deposits and refund timelines. This applies to properties in Lagos State.
• Recovery of Premises Act (Cap R4 LFN 2004) — Applies to tenancy disputes in states other than Lagos where a state-specific Tenancy Law has not been enacted.
• Disputes exceeding ₦500,000 in claimed value may be referred to the Lagos Multi-Door Courthouse (LMDC) (for Lagos properties) or the relevant Magistrate Court for properties in other states.

7. Post-Tenancy Claim Window

Host Claim Deadline

The host has 14 days after the official tenancy expiry date to file any outstanding caution claims. This window begins at midnight on the day following tenancy expiry.

After this 14-day window closes with no pending or new claims, the remaining escrow balance becomes freely refundable to the guest.

No Pending Claims Required

For the refund to become available, there must be:

• No open (pending) claims by the host, and
• No active dispute proceedings.

If a claim is filed before the window closes, the relevant portion of the escrow remains locked until the claim is resolved (approved, disputed, or declined).

8. Guest Refund Process

Once the 14-day post-tenancy claim window has closed and no claims are pending, the guest's remaining caution balance is eligible for refund.

Refund Procedure

1. The guest will receive a notification (in-app + email) informing them that their caution balance is available for refund.
2. The guest submits their preferred bank account details via the Kushi platform.
3. Kushi processes the bank transfer. The timeline for processing is subject to Kushi's operational procedures and Flutterwave transfer settlement times (typically 1–3 business days).

Automatic Processing

Refunds are processed automatically by the platform once the guest submits valid bank details and there are no pending holds on the escrow balance.

9. Reminder Notifications

Kushi will proactively notify guests to claim their caution refund to prevent unclaimed balances accumulating on the platform.

Notification Schedule

If the guest fails to claim their refund after both notifications, Kushi support may attempt further contact. Unclaimed escrow balances will be governed by Kushi's dormant funds policy (to be defined separately).

10. Governing Law

This policy is governed by and construed in accordance with the laws of the Federal Republic of Nigeria.

Primary Legal References

Any dispute arising from the application of this policy that cannot be resolved through Kushi's internal dispute resolution process shall be referred to a court of competent jurisdiction in Nigeria.

11. Policy Administration

This policy is owned by the Kushi Legal & Compliance team. Any amendments must be reviewed and approved by the Legal & Compliance team and the Chief Executive Officer before taking effect. Version history will be maintained and all updates will be communicated to users through the platform's terms of service update mechanism.