How much deposit can a landlord ask for and when must it be returned?

Does the law set the amount of a rental deposit?

No. The Residential Tenancy Act proposed by KPKT was still being finalised in August 2026 and has not been tabled in Parliament ^[6]. The Minister said in February 2026 that it was at its final stage ^[7].

Until that act is in force, the deposit amount, deductions and return period are decided by the tenancy agreement and the Contracts Act 1950 ^[4].

How much deposit is usually asked for?

Common market practice is a security deposit of two months' rent, one month's advance rent and a utility deposit of half a month ^[8]. An access card or key deposit is usually between RM50 and RM100 ^[8].

This is practice, not a legal limit. The amount agreed in the tenancy agreement is what applies.

What can be deducted from a deposit?

Under the Contracts Act 1950, a party that suffers loss from a breach of contract is entitled to compensation for that loss ^[4]. If the agreement names a specific amount for a breach, only reasonable compensation up to that amount can be claimed ^[4].

In practice, deduct only for losses you can prove, such as unpaid rent, unpaid bills or damage beyond normal wear and tear, and give a written reason for each deduction.

How do you claim a deposit that was not returned?

Individuals can file claims of up to RM5,000 at the Small Claims Court ^[1]. Neither party may be represented by a lawyer, and the decision is final and binding ^[2].

The claim is filed using Form 198, and the party being claimed against must file a defence in Form 199 within 14 days ^[2]. The filing fee is RM20 ^[3].

Claims above RM5,000 go to the Magistrates' Court, which hears civil claims of up to RM100,000 ^[1].

The jurisdiction of the Tribunal for Consumer Claims does not mention tenancies or deposits, and it does not hear claims involving an interest in land ^[5]. The Small Claims Court is the more certain route.

What records should a landlord keep?

Complete records shorten disputes, because the evidence for each deduction can be shown.

• An inventory list signed by both parties when the tenant moves in ^[8].
• Photos of each room's condition when the tenant moves in and out ^[8].
• A deposit receipt with the amount and date.
• A written reason and evidence for each deduction.

Frequently asked questions

Can I ask for a three-month deposit?

Yes, if the tenant agrees, because no law sets a limit. Market practice is two months ^[8].

How long does a landlord have to return the deposit?

No period is set by law. Set the period in the tenancy agreement so both parties are clear.

Can a tenant use the deposit as the last month's rent?

Only if the agreement allows it. A deposit is security against damage and arrears, not advance rent.

Does interest have to be paid on the deposit?

We found no law that requires it, so it only applies if the agreement says so.

Can I claim a deposit without a lawyer?

Yes. At the Small Claims Court, individual claims of up to RM5,000 are heard without lawyers representing either party ^{[1] [2]}.