The tenant has moved out. Can the landlord keep the deposit?

A tenant returns the keys, but the landlord keeps the tenancy deposit to cover repairs and replacement items. Are photographs, invoices or a quotation for a new appliance enough to justify the deduction?

In Siti Ramah Mohd Noor v Syed Faisal Shah Syed Gulzar Ali Shah [2026] MLRHU 2146, the High Court in Shah Alam examined a dispute involving deposits, repair costs and the parties’ communications about ending the tenancy.

What happened?

The tenant had paid for repair and upgrading works at the premises. He said the landlord agreed to account for those expenses through rental discounts. When the relationship ended, he claimed the unpaid balance of those costs, the return of his security and utility deposits, and an overpaid water bill.

The landlord disputed the claims. She maintained that the tenant had ended the tenancy wrongfully and sought unpaid rent, repair costs and the cost of replacing a washing machine and curtains.

After trial, the Magistrates’ Court ordered the landlord to pay RM20,950 for the balance renovation and repair costs, refund deposits of RM13,125, and return RM233.70 for the overpaid water bill. It dismissed her counterclaim. The landlord appealed.

Why did the High Court uphold the tenancy deposit refund?

In its reasons dated 3 July 2026, the High Court found no basis to interfere with the trial court’s findings and dismissed the appeal.

The evidence supported the finding that the tenant returned the premises in good condition. The court also considered the absence of a clear, timely demand identifying the alleged damage and the proposed deductions from the deposits.

For the repair counterclaim, the landlord had to establish that the damage existed, that the tenant caused it, that repairs were necessary and that the amount claimed was reasonable. Photographs or invoices did not, by themselves, establish those connections. Evidence from the person who inspected or repaired the premises could have been material.

The washing-machine claim also failed. The landlord had not proved that she supplied a working appliance or that the tenant’s breach caused its failure. Nor had she proved that the replacement amount was the proper measure of loss. A replacement price did not establish the tenant’s liability.

The landlord’s reliance on a tenancy clause concerning notice did not resolve the deposit claim either. She had not properly pleaded that particular basis for forfeiture. Her communications about the tenant leaving also undermined the separate claim for lost rent.

What should landlords and tenants take note of?

A tenancy deposit provides security; its existence does not prove that a particular deduction is justified. The contractual basis and supporting evidence must therefore match the claim.

For landlords, start with a signed inventory, records of the initial condition and handover photographs. An itemised explanation of proposed deductions can then help establish what changed during the tenancy. Where repairs are disputed, evidence of the cause, work done and reasonable cost matters as much as the invoice itself.

For tenants, retain the inventory, communications about repairs and termination, and evidence of the condition at handover. Any arrangement to recover improvement costs through reduced rent should also state what happens to an unpaid balance when the tenancy ends.

This decision does not prevent lawful deductions for proven damage or other contractual liabilities. It shows why a landlord must prove the particular entitlement relied upon, rather than treat the deposit as automatically forfeited when a dispute arises.

Related tenancy reading

Share this article