Agreement of Lease – When must the deposit be returned to the tenant?

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The battle of the deposit is an age-old and hotly debated topic. Tenants are loathe to pay it, and quick to demand it back when the lease ends. Landlords generally don’t lease the property without it, and are loathe, and slow, to pay it back when the property rental comes to an end.

So, when must the landlord return the deposit to the tenant? The short answer is: as soon as reasonably possible but nevertheless within 7 days after the termination of the lease, or in accordance with the Lease Agreement. (The terms of the Lease Agreement must be the same as, or more favourable than the Rental Housing Act).

The Rental Housing Amendment Act gives a more definitive answer to this question. The following periods apply in terms of this Act.

  • Three days before the termination of the lease, the landlord must arrange to inspect the dwelling with the tenant, to determine if there are any damages.
    • If there are no damages to the rental property, then the deposit must be paid back to the tenant within seven days after the termination of the lease.
    • If there are damages to the leased property, then the landlord is entitled to withhold the deposit in order to cover these damages. Once the repairs have been made, the landlord must provide the tenant with receipts evidencing the cost of the repairs. These costs can be deducted from the deposit amount, and the balance of the deposit must be paid to the tenant fourteen days after the landlord regains possession of the repaired property.
  • If the landlord completely fails and neglects to inspect the property, then it is assumed that there are no damages, and the deposit must be returned, in full and with interest, within seven days after termination of the lease.
  • If the tenant fails or refuses to agree on an inspection date, the landlord must inspect the rental property within seven days after the termination of the lease. If there are any damages, the landlord may attend to the repairs and deduct the cost from the deposit, in which event s/he must provide the tenant with copies of the receipts. And in this instance the landlord must return the deposit within 21 days after termination of the lease.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.

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