Can a Landlord Withhold a Tenant's Deposit in South Africa?
In South Africa, the relationship between landlords and tenants is governed by the Rental Housing Act No. 50 of 1999. One common concern for tenants is the return of their deposit at the end of the tenancy.
Tenant's Deposit: A tenant's deposit, often referred to as a security deposit or rental deposit, is a sum of money that a tenant pays to a landlord before occupying a rental property, usually equal to 1 or 2 months rent depending on criteria such as the tenant's credit profile or the condition/value of the property. The purpose of this deposit is to protect the landlord from any potential damage to the property or unpaid rent. It also provides the tenant with a financial guarantee for the return of the deposit at the end of their tenancy, provided certain conditions are met.
The deposit is held in trust in case there are damages - the tenant may not request the landlord use the deposit as rent at any time during the lease and most especially not in the last month of the agreement.
Timeline for Returning the Deposit: According to the Rental Housing Act, a landlord must return the tenant's deposit, or provide an explanation for withholding it, within 7 days after the termination of the lease agreement. This timeline starts from the date the tenant vacates the premises and hands back the keys to the landlord.
Should the outgoing inspection determine that the tenant did cause damage; the deposit must be refunded within 14 days of restoration of the property.
Should the tenant not attend the outgoing inspection, the landlord must refund the deposit with 21 days of termination of the lease.
Tenant's Obligations: To ensure the timely return of their deposit, tenants have certain obligations they must fulfill. Firstly, tenants should leave the rental property in the same condition as when they first occupied it, subject to fair wear and tear. Fair wear and tear refers to the natural deterioration that occurs to a property through typical use, such as minor scuff marks on walls or worn carpet in high-traffic areas. The tenant must attend both the incoming and outgoing inspection
Furthermore, tenants must give proper notice in accordance with the terms of their lease agreement when terminating their tenancy. Failure to do so may result in the landlord deducting fees equivalent to the notice period from the tenant's deposit. Additionally, tenants should settle any outstanding rental arrears or utility bills before vacating the premises.
Landlord's Obligations: Landlords also have responsibilities regarding the deposit. They must safeguard the tenant's deposit by placing it in an interest-bearing account with an authorized financial institution. The interest accrued on the deposit belongs to the tenant and is refundable along with the principal amount upon the termination of the lease agreement.
If a landlord wishes to withhold a tenant's deposit, they must have a valid reason supported by evidence, such as unpaid rent, property damage beyond fair wear and tear, or outstanding utility bills. Reasonable deductions can be made to cover the costs of repairs, cleaning, or other necessary expenses resulting from the tenant's negligence.
The landlord cannot use the deposit to upgrade the property when the tenant vacates.
In South Africa, a landlord can withhold a tenant's deposit under specific circumstances outlined in the Rental Housing Act. It is essential for both parties to understand their obligations and abide by the timeline set for the return of the deposit.
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