11/10/2025
Deposits in terms of the Rental Housing Act.
1. What is the purpose of a deposit?
A deposit is paid to ensure that the property is returned in the same condition that it was let fair wear and tear excepted. The deposit is not security for the last month’s rental.
2. Where must the deposit be kept?
It must be retained in a separate savings account and the interest thereon accrues to the tenant. The exception is where a deposit is paid to an attorney and retained in the firms trust account or paid to an estate agent and retained in such agent trust account. In such instances the interest accrues to the Legal Practice Council or the PPRA.
3. What if we don’t indulge in interest?
The parties may agree to waive interest but this agreement may not be upheld by the Rental Tribunal or a Court as legislation stipulates that it must be invested in an interest bearing account.
4. How much constitutes a fair deposit?
This would depend on the type of property and the agreement between the parties. Generally, a deposit is the equivalent of one month’s rent. It can also be two months rent and a utility deposit is often requested as well.
More about deposits in the next post.
