There isn't a single legally prescribed standard deposit of one, 1.5 or two months’ rent in South Africa. The amount is agreed between landlord and tenant and must be reflected in the lease. In practice, deposits of between one and two months’ rent are common.
According to Antonie Goosen, Principal and Founder of Meridian Realty recent rental-market data illustrates this middle ground, with the average damage deposit sitting at around 1.3 times monthly rent.
“A landlord may look at factors such as the tenant’s credit profile, affordability and the value of the property when determining the deposit. So one tenant may be asked for one month while another application could require a larger deposit.”
Goosen says tenants should also remember that the deposit remains protected.
“It isn't simply additional income for the landlord. It must be dealt with in accordance with the Rental Housing Act, including being held in an interest-bearing account where applicable, and the deposit together with the interest must ultimately be reconciled when the lease ends," he says.
READ: Key rental laws every South African landlord and tenant should understand
REMAX Living rental specialist Linda Segal says typically, 1.5 months rent as deposit applies for rental below a certain threshold: shall we say upwards of R7 000pm and below R20 000pm on average. Entry level renters may not be able to afford more than one month's rent as deposit, and this is why the screening process is vitally important. A minimum of two months' rent as a deposit for higher value rentals is considered a must by owners.
"The damages deposit is designed to protect a landlord if rent is paid late or as a result of a mishap - accidental or otherwise - experienced by tenant, which results in physical damage to the rental property. But the best protocol always is to work with an experienced rental agent who knows exactly how to assist investors navigate risk. The foundation for a successful lease is placing a qualified tenant whose impeccable credentials have been verified by a highly skilled rental agent," she advises.
READ: How to get your full rental deposit back
Beverley Delit of REMAX Living says standard rental deposit in practice, I usually insist on two months’ rent as deposit, depending on the property, tenant profile, furnishings, pets and risk. For premium Atlantic Seaboard rentals, two months is common, especially with furnished or high-end properties. The key is that the deposit must be clearly stated in the lease and handled correctly.
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