Deposit Refund
Synonyms: Deposit Return، Security Deposit Refund، Bond Refund
Last updated: 2026-10-05
Short Definition
Returning security deposit to tenant at contract end after verifying property condition, landlord obligated to refund within reasonable time.
Overview
Legal Basis
Deposit Refund is based on the Civil Transactions Law issued by Royal Decree No. (M/191) of 1444 AH, which specifies the obligations of both parties at contract end. Article 12 of the Real Estate Brokerage Law requires the deposit to be held by REGA or a body it authorizes until the property is returned, and Article 20 of its Implementing Regulation ties its release to the parties' agreement, their acceptance of the experts' decision, or a court judgment. In a dispute, the matter goes to experts named by REGA if both parties agree, otherwise to the competent court via Najiz. Withholding the deposit without justification is considered a violation that may oblige the owner to refund the amount with compensation for delay.
Practical Example
Rim rented an apartment in Khobar for an annual rent of SAR 42,000 and paid a deposit of SAR 7,000. At contract end after two years, she agrees with the owner on inspection on the vacating day. The owner inspects the property in Rim's presence, documenting the condition with photos. He notices two stains on the living room wall (needing partial repainting costing SAR 600) and an unpaid last-month electricity meter worth SAR 320. The deduction is calculated: 600 + 320 = SAR 920. The owner transfers to Rim 7,000 - 920 = SAR 6,080 within 5 days, sending photos and deduction invoices. Rim is satisfied because the deduction is logical and documented. If the owner had refused to refund entirely with unjustified reasons, Rim could have filed a claim via Najiz to recover the full amount by court judgment.
Common Mistakes
- ✗Vacating the property without a joint inspection with the owner — causes subsequent disputes over who caused damages.
- ✗Assuming the owner will refund the deposit automatically without follow-up — requesting an official inspection appointment a week before vacating is recommended.
- ✗Not keeping the original deposit transfer receipt — may make it difficult to prove the amount in case of denial.
- ✗Allowing the owner to deduct normal wear (painting, slight tear) — this is illegal; objection is necessary.
- ✗Agreeing to deduction without repair invoice — every deduction must be supported by an invoice from an approved party.
International Differences
Deposit refund controls differ between countries. In the UAE, the deposit is usually returned within two weeks after handover. In Turkey, the Code of Obligations specifies returning the Depozito within a month of vacating, kept in a joint bank account. In Egypt, regulation is less clear and the matter depends on contract clauses. In the UK, the Tenancy Deposit Scheme requires returning the amount within 10 days of agreeing on the due amount, with a free arbitration mechanism in disputes. In the US, the period ranges from 14 to 30 days depending on the state, with explicit fines on the late owner. The Saudi advantage in deposit refund is that Ejar holds the deposit and returns it according to the receipt and handover form both parties fill in, with disagreements referred to experts named by REGA if both parties agree.
