What the law expects, in general terms
Residential deposits in Kenya are mainly governed by the signed tenancy agreement rather than a single fixed rule. In general terms, one month's rent is the usual deposit, though some landlords ask for two. The deposit stays the tenant's money, held as security. Deductions should be for real, documented costs, and the balance should be refunded within the period the lease states. This is general guidance, not legal advice, so have an advocate check your agreement.
Service charge: inclusive or separate?
Separate. Rent is KES 25,000 and service charge is KES 2,000, both visible on the invoice. Tenants can see what shared services cost, and you can change the service charge without touching the rent.
Inclusive. The tenant sees one figure, KES 27,000, and you carry the shared costs. It is simpler to read but hides the cost of services.
Either works. What matters is that the lease says which one applies.
How to record and refund a deposit, step by step
- State the deposit amount, what it covers and the refund period in the lease.
- Record the deposit as its own charge on the first invoice, never mixed into rent.
- Take a signed condition checklist with photos at move-in.
- At move-out, inspect with the tenant and compare with the checklist.
- List each deduction with a receipt or quote: unpaid rent, final water, repairs beyond normal wear.
- Send the tenant the itemised statement and refund the balance within the agreed period.
- Keep the statement and proof of refund on file.
Worked example
A tenant moves into a one-bedroom unit. Rent is KES 25,000, the deposit is one month's rent, KES 25,000, and the service charge is KES 2,000 shown as a separate line. The first invoice is:
- Rent: KES 25,000
- Deposit: KES 25,000
- Service charge: KES 2,000
- Total: KES 52,000
Every invoice after that is KES 27,000. After 18 months the tenant leaves owing KES 1,350 for water, and a wall they damaged needs repainting at KES 4,000, supported by a receipt. Deductions total KES 5,350, so the refund is 25,000 minus 5,350, which is KES 19,650. Ordinary fading of paint is normal wear and is not deducted.
How HomeManager handles it
HomeManager records the deposit as a separate charge on the tenant's first invoice and tracks it per tenant, so at move-out you can see exactly what you hold for that person. Service charge can be a separate line on each invoice or included in the rent, and this is a setting per unit, so one building can mix both.
When you move a tenant out, HomeManager frees the unit, voids unpaid invoices for that tenancy and ends portal access. The AI assistant can do this after you press Confirm, and the card lists those effects before anything changes. The deductions and the refund itself are your decision. HomeManager records this against the tenant's account, and you pay the refund by your usual method, such as M-Pesa or bank transfer.
Keep every deposit on the record.
HomeManager tracks each tenant's deposit and service charge from the first invoice, so move-out is a checklist, not a search.
Get Started with HomeManagerFrequently asked questions
How much deposit can a landlord ask for in Kenya?
One month's rent is the usual residential deposit, and some landlords ask for two. The amount is set in the tenancy agreement, so state it clearly. HomeManager records the deposit as a separate charge on the first invoice.
Can a landlord keep the deposit for repainting?
Only for damage beyond normal wear, and with an itemised list and receipts. Fading or minor marks from ordinary living are not deductible. Compare against the move-in checklist before deducting.
Should service charge be included in rent or listed separately?
Either is fine if the lease says which. A separate line is more transparent and easier to adjust. In HomeManager this is a setting per unit, so you can choose differently for each unit.
How long does a landlord have to refund a deposit?
The lease should state a period, commonly 14 to 30 days after the tenant hands back the keys. Refund the balance with an itemised statement within that period.