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News & Resources

02 March 2020  | Chanré Wes

A rental deposit is an amount of money requested by a landlord before a tenant moves into the rental property. There are several reasons and uses for the deposit and we all know paying it can be a drag. Here we will look a few things we need to know about rental deposits.

In the good old days renting property was relatively easy; a tenant would only be held to the terms of the agreement he signed to for a specified duration. The landlord on the other hand just had to provide the property to the tenant.  The rental system used to be largely informal and not properly regulated. Hence, the legislator adopted the Rental Housing Act, 1999 (RHA) to govern rental property along with the Amended Rental Housing Act in 2014 that is set out to regulate the behaviour of both tenants and landlords.

Amongst other aspects the RHA deals with the question of rental deposits. Both landlord and tenant has rights pertaining to how a deposit should be handled.

Section 5 of the RHA allows a landlord to take a deposit from a tenant prior to the tenant moving into the property. The deposit amount must be clearly stipulated in the lease agreement and it must be agreed upon by the parties.  

What happens to the rental deposit? The RHA requires the landlord to invest the deposit into an interest bearing account with any financial institution. The tenant has a right to request a statement of interest earned on his money at any time, to which the landlord should provide him with same.

Why is a rental deposit required? The deposit is held by the landlord as security for any damage caused to the property by the tenant during the lease period, including cost for replacing lost keys, remote controls, utility charges and any other money owed to the landlord.

What happens to the deposit at the end of the lease period?

The landlord is obliged to pay the interest (of the invested deposit) and the deposit to the tenant at the end of the lease period. It should however be noted that the pay out of deposit and the interest thereon is subject to certain agreed upon deductions between the parties. Deductions from the deposit can include reasonable costs of repairs to the property, cost of replacing lost keys etc.

After effecting his rightful deductions from the deposit, the landlord must pay the balance of the money to the tenant. The tenant has a right to request receipts of the repairs as affected by the landlord in order to confirm what was actually spent on the property. A landlord is not allowed to deduct money from the deposit for general maintenance and upkeep of the property.

Tenants are advised to read their lease agreement thoroughly and ensure that they understand how their deposit will work. All rental disputes can be referred to the Rental Housing Tribunal in the province you reside in. For more information hereon, do not hesitate to call our offices for assistance. 

Reference List:

  • Rental Housing Act 50 of 1999
  • Amended Rental Housing Act 35 of 2014


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