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We have all either been in a position where a landlord declined to refund a deposit or know someone who has faced the same frustration.
For many tenants, that deposit represents a significant amount of money, and when it is withheld without justification, it creates both financial strain and emotional stress.
Fortunately, the law provides remedies for such disputes, and the Small Claims Court has now been firmly recognised as the appropriate forum to pursue such cases.
This article examines the law, the evidence tenants must provide, and the steps to take to recover deposits legally.
What the law says about security deposits
In the law, there is no specific statute that comprehensively regulates security deposits for rental housing.
Instead, the rules are found in tenancy agreements, the general principles of contract law, and case law.
A security deposit is essentially a form of assurance that the landlord can draw on if the tenant leaves behind unpaid rent, outstanding utility bills, or damage beyond normal wear and tear.
Where none of these apply, tenants are entitled to a full refund.
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The law further requires that any deductions made from a deposit must be reasonable and supported by evidence.
Landlords are not allowed to impose arbitrary deductions or to treat the deposit as non-refundable without a legitimate contractual basis.
Kenyan courts have consistently upheld tenants’ rights to refunds where landlords fail to justify withholding.
Conditions tenants must meet to secure a refund
To have a strong claim for a refund, tenants must ensure that they have met certain basic conditions:
Tenancy agreement: Retain a written contract (or at least clear evidence of the terms if the agreement was verbal) showing the deposit paid and conditions for return.
Proof of payment: Keep receipts, bank slips or MPESA statements as evidence of having paid the deposit.
Fulfil obligations: Ensure rent and utility bills are fully paid, notice periods observed, and property left in reasonable condition.
Record of property condition: Take photographs or videos at move-in and move-out, and where possible, conduct joint inspections with the landlord.
Demand for refund: Send a formal written demand letter to the landlord, giving a reasonable deadline and attaching evidence of compliance with the tenancy terms.
An AI-generated image of a person holding a receipt
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The role of the Small Claims Court
Until recently, many tenants faced uncertainty about where to take deposit disputes. Some courts declined jurisdiction, leaving tenants stranded.
That changed with the High Court ruling in Muhanda v LP Holdings Ltd (2025), which confirmed that the Small Claims Court (SCC) does have jurisdiction to handle such matters.
The judgment established that deposit refund claims fall within Section 12(1)(b) of the Small Claims Court Act, which covers contracts relating to money held and received.
Importantly, the SCC can only hear claims worth up to Sh1,000,000. This makes it the perfect forum for most deposit disputes, since residential deposits rarely exceed that amount.
The SCC is also designed for efficiency, with cases meant to be concluded within 60 days of filing.
Steps to take if your deposit is withheld
Tenants should follow a structured approach when pursuing a refund:
Send a demand letter: Write to the landlord requesting repayment of the deposit within a set timeframe (e.g. 14 days).
Attempt negotiation: Where possible, try to resolve the matter amicably before escalating.
File a claim in the Small Claims Court: If the landlord does not comply, lodge a formal claim using the SCC claim form (SCC-1). Filing fees are modest and lawyers are not compulsory.
Present evidence at the hearing: Submit tenancy agreements, payment receipts, photos or videos, and correspondence with the landlord. Witnesses may also strengthen your case.
Enforce the judgment: If the court rules in your favour but the landlord still refuses to pay, enforcement mechanisms such as attachment of property can be pursued
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File image: Milimani Law Courts
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Pitfalls tenants should avoid
It is important to remember that the law also places responsibilities on tenants. Common pitfalls that weaken claims include:
Failing to document the condition of the property at the start and end of the tenancy.
Ignoring the requirement to give proper notice before moving out.
Leaving unpaid rent or utility bills.
Accepting vague or verbal assurances from landlords without written confirmation.