A Landlord’s Obligations in Respect of a Tenant’s Deposit

Consumer Protection Law, Law of Property, Question & Answer

30 July 2026

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2–3 minutes

Issue: Should a landlord keep a tenant’s deposit in an interest-bearing account?

Here’s a question from Melissa:

I recently moved out of a rental property and I’m wondering what my rights are regarding my security deposit. My landlord deducted R400 for damages, which I have no issue with. However, I lived in the property for five years, and the R4,200 deposit I paid in 2021 was refunded at the same amount (less the R400 deduction for damages).

Shouldn’t my landlord have kept my deposit in an interest-bearing account during my tenancy? If so, am I not entitled to receive the interest that accrued on the deposit as well?

From The Legal Desk

Thanks for your question, Melissa. Tenant deposits are a common source of unnecessary disputes between tenants and landlords, which is unfortunate because the law on this issue is fairly straightforward. That said, what seems straightforward to one party isn’t always so clear to the other. So, let’s take a look at the legals…

Per the Rental Housing Act (RHA),¹ a landlord is legally required to keep a tenant’s deposit in an interest-bearing account. The RHA stipulates several strict duties regarding the handling of deposits for residential dwellings.

Firstly, a landlord (or “landowner” in the amended Act) must invest the tenant’s deposit in an interest-bearing account with a financial institution. The interest rate applicable to this account cannot be less than the rate typically applied to a savings account by that same financial institution.

The deposit and all accrued interest are legally protected; they do not form part of the assets of the landlord’s insolvent or deceased estate should the landlord die or become insolvent. During the period of the lease, you, as the tenant. have the right to request written proof of the interest accrued on the deposit from the landlord. Should you ever do so, the landlord must provide a dated, written receipt for the deposit that clearly indicates the address of the dwelling and the period for which payment is made.

While we’re on the subject, it’s worth discussing how long a landlord has to refund your deposit after the lease ends. Typically, this depends on whether there are outstanding debts or damages to the property. If you do not owe any money for rent and there are no damages to the property, the landlord must refund the full deposit plus interest, without any deduction or set-off, within seven days of the lease’s expiration.

If the landlord applies the deposit and interest toward unpaid rent or the reasonable cost of repairing damage (including replacing lost keys), the remaining balance must be refunded no later than 14 days after the restoration of the dwelling to the landlord. The landlord must make relevant receipts available to the tenant for inspection as proof of these costs.

If the tenant fails to respond to the landlord’s request for a joint exit inspection, the landlord must still inspect the property within seven days of the lease’s expiration. In this scenario, the landlord has until 21 days after the expiration of the lease to refund the balance of the deposit and interest.