Rental Deposit Rules in South Africa 2026: Complete Landlord Guide

Rental deposits are one of the most misunderstood aspects of being a landlord in South Africa. Get them wrong and you could face a Rental Housing Tribunal complaint, financial penalties, or a tenant who knows the law better than you do.

This guide covers everything you need to know about rental deposit rules in South Africa — from how much you can charge to exactly how and when to return the money.

How Much Deposit Can a Landlord Charge in South Africa?

There is no statutory cap on rental deposits in South Africa. The Rental Housing Act (Act 50 of 1999) does not prescribe a maximum amount. In practice, most landlords charge between one and two months’ rent as a deposit.

That said, charging an excessive deposit can deter good tenants and may be challenged as an unfair practice. The market norm is:

One month’s rent — the standard for most residential leases
Two months’ rent — common for furnished properties, pet-friendly leases, or higher-risk tenancies
No deposit — rare, but some landlords waive the deposit in exchange for higher rent

The key is to specify the exact deposit amount in your written lease agreement. If you don’t have a written lease, proving what was agreed becomes significantly harder.

The Interest-Bearing Account Requirement

This is where most landlords trip up. Section 5(3)(g) of the Rental Housing Act requires that:

A landlord must invest a tenant’s deposit in an interest-bearing account with a financial institution and pay the tenant interest at the rate applicable to that account.

This is not optional. It applies to every residential lease in South Africa, whether you manage one unit or a hundred.

Which Banks Offer Deposit Trust Accounts?

Most major South African banks offer savings or trust accounts suitable for holding tenant deposits:

FNB — Money Maximiser or savings account
Standard Bank — PureSave or notice deposit
Absa — Transact savings account
Nedbank — JustSave or notice deposit
Capitec — Savings account (competitive interest rates)

The account must be in the landlord’s name (or their agent’s name), but the interest earned belongs to the tenant. Some landlords open a dedicated savings account per tenant; others use a single trust account and track allocations internally.

How to Calculate and Pay Deposit Interest

At the end of the lease, you owe the tenant:

The original deposit amount
Minus any legitimate deductions (more on this below)
Plus accrued interest at the rate the account earned

For example, if a tenant paid a R10,000 deposit and the savings account earned 5.5% per annum over a 12-month lease, you owe approximately R550 in interest — on top of whatever deposit balance remains after deductions.

Pro tip: Keep a record of your bank statements showing the deposit balance and interest earned. This protects you if a tenant disputes the amount.

Returning the Deposit: Timelines and Process

The Rental Housing Act requires landlords to return the deposit (plus interest, minus lawful deductions) within 14 days of the lease ending — provided a joint inspection has been conducted.

If no inspection takes place, the deposit must be refunded within 21 days.

The Joint Inspection Requirement

Before you deduct anything from a deposit, you must conduct a joint inspection with the tenant:

Schedule it — ideally on the last day of the lease or the day the tenant vacates
Walk through the property together — compare the current condition against the move-in inspection report
Document everything — take photos, note damages, and have both parties sign an inspection report
Agree on deductions — or at least record what each party considers fair

Without a joint inspection, deducting from the deposit becomes legally risky. Tenants can (and do) challenge deductions at the Rental Housing Tribunal if proper process wasn’t followed.

What You Can Deduct From a Deposit

Lawful deductions include:

Damage beyond normal wear and tear — a broken window, holes in walls, stained carpets from negligence
Outstanding rent — if the tenant owes rent at the time of vacating
Unpaid utilities — electricity, water, or other charges the tenant was responsible for
Cleaning costs — if the property is left in a significantly worse condition than it was handed over

You cannot deduct for:

Normal wear and tear (faded paint, minor scuff marks, worn carpets from regular use)
Pre-existing damage that was noted in the move-in inspection
Upgrades or improvements you want to make after the tenant leaves

Common Deposit Mistakes Landlords Make

1. Not Using an Interest-Bearing Account

This is the most common violation. Some landlords deposit the money into their personal current account or, worse, spend it. Both are illegal. The tenant’s deposit must sit in an interest-bearing account for the duration of the lease.

2. Skipping the Move-In Inspection

If you don’t have a documented move-in condition report (with photos), you have no baseline against which to assess damage. This makes it nearly impossible to justify deductions later.

3. Deducting for Normal Wear and Tear

A five-year tenancy will naturally result in some wear. Trying to charge for repainting walls that have faded over time, or replacing carpets that have worn through normal use, is not legally defensible.

4. Missing the Refund Deadline

Failing to return the deposit within 14 days (or 21 if no inspection was conducted) exposes you to a Tribunal complaint and potential penalties.

5. Not Providing an Itemised Statement

When making deductions, provide the tenant with a written breakdown showing:

The original deposit amount
Interest earned
Each deduction with a description and amount
The net amount being refunded

How Indlu Helps You Stay Compliant

Managing deposits across multiple properties — tracking interest, scheduling inspections, and meeting refund deadlines — can quickly become overwhelming. Indlu’s deposit tracking feature automates the process:

Records deposit amounts and dates per tenancy
Calculates accrued interest automatically
Sends reminders for joint inspections as lease end dates approach
Generates itemised deposit statements for tenants

No more spreadsheets, missed deadlines, or manual interest calculations.

Frequently Asked Questions

Can a landlord use the deposit as the last month’s rent? Not unilaterally. The deposit is security against damage and unpaid obligations — it is not a rent substitute. If both parties agree in writing, the deposit can be applied to the final month’s rent, but this should be documented in the lease or a separate agreement.

What happens if the landlord doesn’t return the deposit? The tenant can lodge a complaint with their provincial Rental Housing Tribunal. The Tribunal can order the landlord to refund the deposit plus interest and may impose additional penalties.

Does the landlord have to prove damage to justify deductions? Yes. The burden of proof lies with the landlord. This is why move-in and move-out inspections with photographic evidence are essential.

Can a landlord increase the deposit during the lease? Only if the lease agreement contains a clause allowing for deposit increases (typically tied to annual rent increases). The tenant must agree to the terms at lease signing.

What if the tenant refuses to attend the joint inspection? Invite them in writing (email or letter) with a proposed date and time. If they don’t respond or refuse to attend, proceed with the inspection, document everything thoroughly, and keep proof that you attempted to schedule it.

Indlu’s deposit tracking keeps you compliant without the admin. Get started from R99/mo.