A security deposit is defined as a fixed amount of money paid to a property manager or landlord that ensures the tenant will pay rent and abide by the contract.

Is it compulsory to pay a deposit when renting?

A tenant is expected to pay a deposit as a security for rent owed and damage to the property. Typically, this should not exceed six months' rent.  

How is the deposit held?

A separate account must be used to hold the deposit and neither the landlord nor the tenant is allowed to withdraw the deposit before the tenancy ends. The tenant has the right to refuse the landlord's request to deposit the amount in the landlord's private account or to hold the amount in cash. The landlord is also responsible for any fees incurred in setting up or maintaining the account.

How/When is the deposit returned?

The deposit is returned to the tenant when the lease expires. Either the landlord writes to the bank to return the deposit back to the tenant or the tenant makes a written request to the bank to return the deposit back to him/her; or the bank will inform the landlord in writing of the tenant's request. The landlord can either agree to the return of the deposit or request that the deposit be withheld if he has decided to take legal action against the tenant. 

Last modified 6 November 2023
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