Written by: Eugene van der Walt | Afrikaanse weergawe
Few things sour the end of a lease faster than a fight over the deposit. The tenant wants it back in full, the landlord wants to cover the damages, and both often misunderstand what the law actually requires. Here is how rental deposits are supposed to work, and how to avoid the dispute altogether.
The Deposit Is the Tenant’s Money
A rental deposit is not a fee, and it is not the landlord’s income. It is the tenant’s money, held by the landlord as security against damage, unpaid rent, or other breaches of the lease. The Rental Housing Act is clear on this point. The landlord holds the deposit in a trust for the tenant and must account for it at the end of the lease.
Importantly, the landlord is required to invest the deposit in an interest-bearing account, and the tenant is entitled to the interest earned. Many landlords are unaware of this obligation, and many tenants never think to ask for the interest they are owed.
The Incoming and Outgoing Inspection
This is where most deposit disputes are won or lost. The Rental Housing Act requires a joint inspection of the property before the tenant moves in, to record the condition of the property and note any existing defects. A second joint inspection must take place at the end of the lease to compare the condition of the property against that record.
The incoming inspection protects both parties. It stops a landlord from charging a tenant for damage that was already there, and it stops a tenant from denying damage they actually caused. If a landlord fails to conduct the incoming inspection, the law presumes the property was handed over in good condition, which makes it very difficult for the landlord to later justify deductions.
What a Landlord May and May Not Deduct
A landlord may deduct from the deposit the reasonable cost of repairing damage caused by the tenant, beyond fair wear and tear, as well as any arrear rental or other amounts owed under the lease. The key phrase is fair wear and tear. A landlord may not deduct for the ordinary ageing of the property, such as faded paint, minor scuffs or worn carpets that result simply from normal living.
- Legitimate deductions include unpaid rent, the cost of repairing broken fixtures, cleaning where the property was left dirty, and replacing damaged items recorded at the outgoing inspection.
- Deductions that are not permitted include normal wear and tear, pre-existing damage recorded at the incoming inspection, and improvements the landlord simply wants to make.
The Timelines That Matter
The Rental Housing Act sets clear deadlines for returning the deposit. Where there were no deductions, the deposit plus interest must be repaid within seven days of the lease ending. Where there were deductions, the landlord must refund the balance, together with receipts for the repairs, within fourteen days of the property being restored to the landlord. If the tenant fails to attend the outgoing inspection, the landlord has a longer period to account. Landlords who miss these deadlines expose themselves to disputes and possible penalties.
If a Dispute Arises
Where a deposit dispute cannot be resolved between the parties, either side may refer the matter to the Rental Housing Tribunal. This is a free, formal dispute resolution body created specifically for landlord and tenant disputes, and its rulings have the same force as a court order. It is often a faster and more cost-effective route than litigation.
The Simple Way to Avoid All of This
Almost every deposit dispute traces back to a missing inspection or a vague lease. The solution is straightforward: conduct both inspections properly and in writing, photograph the property at the start and end of the tenancy, and keep the lease clear about what the tenant is responsible for. A little care at the beginning saves a great deal of conflict at the end.
Van Der Walt and Associates assists both landlords and tenants with lease agreements, deposit disputes and Rental Housing Tribunal matters. Contact us for an initial consultation.
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.