WRITTEN BY MARI VAN DER WALT
24 MAY 2022

It is trite law that upon entering into a lease agreement, the tenant will need to pay a deposit to the landlord. This deposit is used as protection for the landlord should the tenant breach the lease agreement. The legal framework surrounding deposits is particular and should be dealt with according to the law.

What Amount is the Landlord Entitled to Charge as a Deposit?

Section 5(3)(c) of the Rental Housing Act 50 of 1999 (Rental Housing Act) stipulates that the deposit “may not exceed an amount equivalent to an amount specified in the agreement or otherwise agreed to between the parties”.

In practice, the deposit usually equals one month’s rental; however, the parties can agree to a specific amount.

Must the Landlord Place my Deposit in an Interest-Bearing Account?

Yes, in terms of section 5(3)(d) of the Rental Housing Act, a landlord must invest the deposit in an interest-bearing account with a financial institution.

Such interest will be due to the tenant upon the termination of the lease agreement subjected to the allowed utilisation thereof as set out in section 5(3)(g) of the Rental Housing Act.

The interest rate may not be less than the rate applicable to a savings account with a financial institution.

Where the landlord is a registered estate agent as provided for in the Estate Agency Affairs Act, 112 of 1976, the deposit and any interest thereon shall be dealt with in accordance with the provisions of that Act;

May I Request Proof of the Deposit Bearing Interest From the Landlord?

Yes, the tenant may, during the lease period, request the landlord to provide him with written proof in respect of interest accrued on such deposit, and the landlord must provide such proof.

Can the landlord keep my deposit?

Yes, section 5(3)(g) of the Rental Housing Act afford the landlord to utilise the deposit, as well as the accumulated interest, towards any outstanding amount the tenant is liable for. This may include charges for, inter alia:

  • arrear rent;
  •  municipal charges;
  • water and electricity;
  • replacing of keys; and
  • costs associated with the reasonable repair of the property.

After the aforementioned have been deducted, the balance of the deposit must be paid to the tenant within 14 days after the restoration of the property to the landlord.

What are the Costs Associated with the Reasonable Repair of the Property?

The landlord is not allowed to use the deposit for general maintenance or upkeep of the property.

If the tenant didn’t cause any damage to the property, the full deposit and interest must be paid to the tenant within seven days of the lease’s expiration date.

May the Tenant Request Proof of any Expenses Set off against the Deposit?

Yes, the landlord may be requested to deliver any receipts relating to the costs for repairs to the property. If it is clear that the landlord incurred no costs, the deposit, together with the accrued interest in respect thereof, must be refunded to the tenant without any deduction or set-off within seven days of the expiration of the lease.

If you feel your deposit is not protected due to the landlord’s conduct, contact Burger Huyser Attorneys’ lease agreement specialists to provide comprehensive legal guidance in claiming your deposit back.

DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE