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How much is the security deposit on a lease, and is there a cap?

Short answer

None of the official texts we reviewed sets a cap or a fixed amount for a lease security deposit: the Real Estate Brokerage Law and its Implementing Regulation do not fix an amount, and Ejar’s unified residential lease binds the parties to the percentage or amount they agreed. The deposit is optional, but if one is set in a lease documented on Ejar it must be held by the platform, and it is reserved from the tenant’s Ejar wallet when the lease is documented. The 5% limit in the Brokerage Law applies to earnest money (a down payment on a deal), not to the security deposit.

What we checked, and what it says about the amount

A security deposit (the law calls it a “guarantee”) is money the tenant pays in trust to compensate the owner for damage the tenant causes. None of the official texts that deal with it sets a minimum or maximum amount:

  • Real Estate Brokerage Law (Royal Decree M/130 dated 30/11/1443H): Article 1 defines the deposit and Article 12 governs how it is held and returned, without setting an amount.
  • Its Implementing Regulation (Article 20): sets the form of the deposit and how it is held and returned, with no amount or percentage.
  • Ejar’s unified residential lease: the parties commit to “the agreed percentage or amount” of the deposit.
  • Civil Transactions Law: we found nothing in its lease provisions (from Article 407) that sets a deposit amount.
  • Provisions regulating the lessor–tenant relationship (Royal Decree M/73 dated 2/4/1447H): they cover rent, renewal and registration and do not mention deposits.

Cash or bank guarantee?

Article 20 of the Implementing Regulation says the deposit, if there is one, is either a cash guarantee or a bank guarantee. A cash deposit must be handed to the Real Estate General Authority (REGA) or its delegate within two working days of concluding the unified lease and receiving the deposit, and kept in a dedicated account that may not be used for anything else.

In practice, Ejar’s deposit holding service pages describe reserving an amount from the tenant’s Ejar wallet; they do not describe any way to lodge a bank guarantee.

When it is paid and where it is held

If no deposit is set, the lease can still be documented. If one is set in a lease documented on Ejar, it must be recorded and held by Ejar as a neutral party, not by the lessor. The deposit rules in the Brokerage Law and its regulation apply across the whole Kingdom.

  • The broker enters the amount when registering the lease, and a notice asks for it to be paid from the tenant’s wallet.
  • Before approving the lease, the tenant tops up the wallet if the balance is not enough, and the amount is reserved automatically.
  • Once the lease is documented, the amount shows in the wallet as the reserved deposit; if it is not documented, the hold is released.

Follow-up questions

Is the 5% figure in the Brokerage Law a cap on deposits?

No. Article 13 of the law deals with earnest money: it caps it at 5% of the value of a deal made through a broker, and anything above that counts as an advance payment. The security deposit is governed by Article 12, which sets no amount or percentage.

Do I have to accept the deposit amount the lessor asks for?

The amount is a matter of agreement, so you can negotiate it before approving the lease; a lease is only documented on Ejar once both parties approve it.

Is the deposit different on a commercial lease?

We found no cap for either in the law or the regulation. However, the copy of the unified commercial lease published on Ejar’s website, which is watermarked as not intended for official use, lets the lessor under Article 14 deduct unpaid rent, bills, utility charges and repair costs from the deposit after the tenant moves out, with the burden of proof on the lessor and only after notifying the tenant in writing within 30 working days of moving out; otherwise the full deposit must be returned. The unified residential lease provides for deducting damage the tenant caused and returning the rest within 30 days of moving out.

Official sources

General information for guidance, not legal advice; the governing regulations and official bodies are the final reference.

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