Tenant Deposit

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Taking a tenant on can be risky business; luckily this risk can be reduced by taking a deposit from a tenant. Sounds simple but there are rules to protect the tenant’s deposit and the landlord’s interest. Landlords should take care to understand their responsibility and liability to protect and use the deposit.

The landlord must remember that before he can claim any damages from the deposit, he or his estate agent, would have had to perform a joint incoming and outgoing inspection with the tenant. Failure by the landlord, or his estate agent, to perform the joint incoming or outgoing inspection of the property in the presence of tenant as required by the Rental Housing Act, is deemed that the property is in a good and proper state of repair, and the landlord will have no further claim against the tenant or the deposit.

Also in terms of the Rental Housing Act, should there be no claim against the deposit with regards to arrear rent or additional charges, lost keys or damages to the property when the tenant vacates the property, the deposit must by refund to the tenant within 7 days. If there are damages to the property, the deposit must be refunded to the tenant with in 14 days of the restoration of the property. Should the tenant fail to attend the outgoing inspection with the landlord, the deposit must be refunded with 21 days of the expiation of the lease. The landlord can only claim damages at a reasonable cost to repair the property and must provide the tenant with the invoices / receipts for the repairs.

In summary, the landlord can not contract out of his responsibility or liability of holding the tenant’s deposit. He must comply with the Rental Housing Act in terms of paying interest back with deposit, the minimum number of days he has to refund the deposit and performing the incoming and outgoing inspections.

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  1. Thank you for informative article. As a Landlord I have had the misfortune of placing a problematic tenant in my property. The tenant did not pay rent for 3 months and still refuses to move out. I've had to spend money on the sheriff of the court, eviction notice etc. Not only is it costing me money but valuable time. Be carfeul when placing a tenant. What about my rights as a Landlord? I have found some good information on www.lessor.co.za

  2. Hi,
    At what interest rate should i calculate Tenant deposit refund.

    1. Hi Phindi, the interest rate set for the account that the deposit was held in. You would need to contact your bank to confirm the exact interest rate at the time of refunding the deposit.