Does a rental deposit have to earn interest in South Africa?

Yes. The Rental Housing Act requires the landlord to invest the deposit in an interest-bearing account at a rate no lower than a savings account, and the interest accrues to the tenant. The tenant may ask for written proof of the interest earned.

When must a landlord refund the deposit?

If nothing is owed, within 7 days of the lease expiring. If lawful deductions are made, the balance plus interest within 14 days of restoring the dwelling. If the tenant did not respond to the outgoing inspection, the full deposit plus interest within 21 days.

What can a landlord deduct from a deposit?

Arrear rent and the reasonable cost of repairing damage beyond fair wear and tear, supported by receipts or quotes. Normal wear and tear may not be deducted.

What happens if the landlord does not inspect at move-out?

If the landlord fails to inspect jointly with the tenant at the end of the lease, they are deemed to have acknowledged the dwelling is in good condition and lose the right to deduct for damage — the full deposit plus interest is then refundable.

Deposits & law · South Africa

Rental deposits & interest in South Africa: the landlord's guide

Deposits are one of the most disputed parts of a tenancy. The Rental Housing Act sets clear rules on how you hold the money, the interest it must earn, and exactly when you have to give it back.

Updated June 2026 · ~6 min read · General guidance, not legal advice (see disclaimer)

The short version: Hold the deposit in an interest-bearing account, the interest belongs to the tenant, inspect the property jointly at move-in and move-out, and refund the deposit plus interest (less lawful, documented deductions) within 7, 14 or 21 days depending on the circumstances.

The deposit must earn interest — for the tenant

Under the Rental Housing Act, a landlord who takes a deposit must invest it in an interest-bearing account with a financial institution, at a rate not lower than that of an ordinary savings account. The interest accrues to the tenant, not you. The tenant is entitled to ask, in writing, for proof of the interest earned at any time.

Inspect together — at the start and the end

Two joint inspections bookend the lease, and they decide whether you can ever claim against the deposit:

Incoming inspection — jointly with the tenant before or on move-in, to record the property's condition.
Outgoing inspection — jointly within the three days before the lease expires, to compare against the incoming record.

Miss the outgoing inspection and you lose the claim. If you fail to inspect jointly at the end of the lease, you're deemed to have acknowledged the property is in good condition — and you must refund the full deposit plus interest.

What you may deduct

You may apply the deposit and its interest toward:

Arrear rental and other amounts the tenant owes under the lease.
The reasonable cost of repairing damage to the property beyond fair wear and tear, backed by receipts or quotes.

You may not deduct for normal wear and tear, and every deduction must be documented — keep the invoices and photos from both inspections.

Refund deadlines: 7, 14 or 21 days

Situation	Refund deadline (deposit + interest)
No amounts owed	Within 7 days of the lease expiring.
Lawful deductions made	Balance within 14 days of restoring the dwelling, with receipts.
Tenant didn't respond to the outgoing inspection	Full deposit within 21 days of expiry.

Fair wear and tear vs damage

Fair wear and tear → your cost

The expected ageing of a lived-in home: faded paint, lightly worn carpets, minor scuffs. Not deductible.

Damage → deductible

Beyond normal use: broken fittings, holes in walls, stains, missing items. Deductible with proof.

Keep the paper trail

Deposit disputes are won and lost on records. Keep the signed incoming and outgoing inspection reports (with photos), the interest-bearing account statements, and the receipts for any repairs you deduct. If a dispute reaches the Rental Housing Tribunal, that file is your case.

Mastendi tracks deposits and accrues the interest for you

Record each deposit, set the interest rate once, and Mastendi accrues the monthly interest automatically and keeps it fully auditable. Capture move-in and move-out inspection reports with photos, and link any deductions to documented repair costs — so a refund (or a dispute) is a few clicks, not a shoebox of slips.

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Frequently asked questions

Does the deposit have to earn interest?

Yes — it must be held in an interest-bearing account at no less than a savings rate, and the interest belongs to the tenant, who can request written proof.

When must I refund the deposit?

Within 7 days if nothing is owed; within 14 days of restoring the dwelling if you make deductions; within 21 days if the tenant didn't respond to the outgoing inspection.

What can I deduct?

Arrear rent and the documented cost of repairing damage beyond fair wear and tear. Not normal wear and tear.

What if I don't do the outgoing inspection?

You're deemed to have accepted the property as in good condition and must refund the full deposit plus interest.

Disclaimer: This guide is general information for South African landlords and is not legal advice. The Rental Housing Act and provincial rules change and your situation may differ. Confirm the current position with the relevant Rental Housing Tribunal or a qualified attorney before acting.