When Can I Legally Deduct Money from the Tenant’s Deposit in South Africa

Managing deposits fairly and lawfully is one of the most critical responsibilities for South African landlords. Tenants have strong legal protections regarding how their deposits are held, used, and refunded. Landlords must strictly adhere to these rules to avoid disputes and legal action.

The Rental Housing Act clearly outlines when a landlord is entitled to make deductions from a tenant’s deposit and what process must be followed.

This guide explains when you can legally deduct from the deposit, the inspection requirements, and best practices to protect both you and your tenant.

Purpose of the Deposit

A tenant’s deposit is not the landlord’s money to use freely. It is a security amount held in trust to cover specific, lawful costs that may arise at the end of the tenancy.

The main lawful uses for a deposit include:

• Unpaid rent at the end of the lease.
• Utility charges or other amounts the tenant agreed to pay but did not.
• Repairing damage to the property beyond fair wear and tear.

Any deduction outside these purposes can be challenged as unlawful.

Difference Between Damage and Fair Wear and Tear

A key legal principle is that landlords cannot deduct for fair wear and tear.

Fair wear and tear include:

• Minor scuff marks on walls.
• Light carpet wear from everyday use.
• Fading of paint or curtains from sunlight.
• Small nail holes for hanging pictures.

Damage beyond fair wear and tear can be deducted. Examples:

• Broken windows or doors.
• Holes punched in walls.
• Stains from negligence or misuse.
• Missing fixtures.

Understanding this distinction is essential for avoiding disputes over deductions.

Mandatory Inspections

The Rental Housing Act requires landlords and tenants to conduct ongoing and outgoing inspections.

Ingoing Inspection:

• Done at the start of the lease.
• Documents the property’s condition.
• Protects tenants from unfair claims for pre-existing damage.

Outgoing Inspection:

• Done at the end of the lease.
• Identifies any new damage caused by the tenant.
• It must be scheduled with the tenant present.

If the landlord fails to do the outgoing inspection, they may lose the right to deduct for damages.

Process for Deductions

Conduct the outgoing inspection with the tenant present.

Document all damages with photos and a signed inspection report.

Obtain quotes or invoices for repair costs.

Prepare a written, itemised account of all deductions.

Provide the tenant with the itemised account and any balance of the deposit (plus interest) within the legal timeframes.

This process is designed to ensure transparency and fairness.

Timeframes for Refunds and Deductions

The Rental Housing Act sets strict deadlines:

• If there are deductions, the landlord must refund the balance of the deposit (after deducting lawful amounts) within 14 days of either the completion of repairs or payment of outstanding costs.
• If there are no deductions, the entire deposit, plus interest, must be refunded within 7 days of lease termination.

Failing to meet these deadlines can lead to legal orders or penalties.

Holding the Deposit

Landlords must:

• Place the deposit in an interest-bearing account for the tenant’s benefit.
• Pay the interest earned to the tenant when refunding the deposit.
• Disclose to the tenant where the deposit is held and what interest rate is being earned.

Misuse of the deposit (e.g., spending it before deductions are agreed) is unlawful.

What Can Be Deducted

Permitted deductions include:

• Unpaid rent: If the tenant is in arrears at lease end.
• Utilities or municipal charges: The tenant is responsible for payment of these charges.
• Repair costs: For damage beyond fair wear and tear.
• Legal fees or other costs: Only if the lease explicitly allows them and they are lawful.

Not permitted:

• Normal wear and tear.
• Charges not agreed in the lease.
• Arbitrary or punitive penalties.

Best Practices for Landlords

• Always use a written lease that details deposit rules.
• Conduct thorough ingoing and outgoing inspections with the tenant.
• Take dated photos to document the condition.
• Keep receipts and quotes for repairs.
• Communicate clearly and in writing about any deductions.
• Refund on time and include an itemised statement.

These steps reduce disputes and strengthen your legal position.

Risks of Unlawful Deductions

If you deduct improperly from a tenant’s deposit, you risk:

• A complaint to the Rental Housing Tribunal.
• A legal order to refund the amount plus interest.
• Being barred from making specific claims in court.
• Damage to your reputation as a landlord.

Fair and transparent practices protect both parties.

FAQs

Can I use the deposit for unpaid rent?

Yes, if the tenant owes rent at the end of the lease, you may deduct it from the deposit.

Can I charge for cleaning?

You may deduct reasonable cleaning costs only if the property is left excessively dirty beyond normal wear and tear.

What if the tenant refuses to attend the inspection?

You can proceed with the inspection in their absence, but you must show you gave them reasonable notice.

Do I have to pay interest on the deposit?

Yes, the law requires you to hold it in an interest-bearing account and refund the interest to the tenant.

What happens if I don’t do the outgoing inspection?

You may lose the right to claim for damage beyond fair wear and tear.

Useful External Links

• www.gov.za/documents/rental-housing-act
  Official text of the Rental Housing Act.

• www.justice.gov.za
  Department of Justice – information on dispute resolution and evictions.

• www.westerncape.gov.za/service/rental-housing-tribunal
  Provincial tribunal page explaining inspections, disputes, and tenant rights.

• www.saflii.org
  Southern African Legal Information Institute – free access to landlord-tenant case law.

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