Security Deposits – Where Does It Go?

One of the first roadblocks prospective tenants face when looking for property to rent is the security deposit. The purpose of a security deposit is to protect the landlord against any possible damage the tenant might cause or to cover the costs should any other unforeseeable event occur.

Section 5 (3) of the Rental Housing Act 50 of 1999 requires that the landlord invest a deposit into an interest-bearing account, which is for the tenant's benefit. However, many tenants are unaware of this requirement by the Act, and many landlords use this as an advantage by not refunding a tenant the interest earned on the deposit paid. Landlords are known to not include this provision in a lease agreement, and if a tenant does not read through the lease agreement thoroughly, this causes them to be unaware of it.