# Tenants don't want the deposit, and removing it changes nothing they do URL: https://www.leasesurance.co/blog/tenants-dont-want-the-deposit Title: Tenants don't want the deposit Summary: Given a real choice, up to 7 in 10 new tenants skip the cash deposit. The worry that dropping it makes tenants behave worse does not hold up in the data. --- [← Back to Blog](https://www.leasesurance.co/blog) Demand & behaviour Given a real choice, up to 7 in 10 new tenants skip the cash deposit. The fear that it worsens behaviour doesn't survive the data. LeaseSurance · Insights Two objections usually greet the deposit alternative. First, that tenants won't really choose it. Second, that removing the deposit wrecks their behaviour: they'll trash the unit or skip the last month. The data answers both, and neither holds. ## Tenants are already choosing it {#tenants-are-already-choosing-it} Offered a real choice at signing between a cash deposit and a small monthly waiver, most tenants don't pick the deposit. At properties where [deposit-free residential leasing](https://www.leasesurance.co/zero-deposit) is on the table, **up to 7 in 10 new tenants take the waiver**, and around two in three do so consistently. That demand shows up on the book. Leases insured have grown from **R20m to nearly R35m in under ten months**, and the growth is still accelerating. ## The behaviour worry doesn't survive the data {#the-behaviour-worry-doesnt-survive-the-data} The second objection is the serious one. If the deposit is a discipline device, removing it should make tenants worse. We tested that on a rent-normalised comparison of waiver and deposit cohorts. It made no difference. TENANT DEMAND ## Given a real choice, tenants skip the deposit. {#slide-1-title} Up to 7 in 10 pick the waiver. And removing the deposit changes nothing about how they behave. LeaseSurance Smart Leasing · Zero Deposits · 1/4 02 · THE FEAR, TESTED ### No deposit, same behaviour. {#slide-2-title} - **3.4%→3.3%** — Monthly churn: flat - **123% = 123%** — Move-out balance vs rent: identical - **−22%** — Damages at vacate Waiver vs deposit cohort, rent-normalised. The deposit wasn't disciplining anyone. LeaseSurance Smart Leasing · Zero Deposits · 2/4 03 · WHY ### The deposit's job was overstated. {#slide-3-title} 01 Never sized right A one-month deposit rarely covered a real vacate balance anyway. 02 Rewards beat forfeiture A payout for a clean exit shapes behaviour better than a lump held hostage. 03 Same tenant, same intent Affordability changed at move-in. Conduct at move-out didn't. LeaseSurance Smart Leasing · Zero Deposits · 3/4 04 · THE TAKEAWAY ## Demand is real. The downside isn't. {#slide-4-title} Tenants want out of the deposit, and letting them doesn't cost landlords a thing in behaviour. - **R20m → ~R35m** — leases insured · under 10 months · and growing Built on data. Powered by AI. Underwritten by Guardrisk. LeaseSurance Smart Leasing · Zero Deposits · 4/4 Monthly churn is flat at **3.4% versus 3.3%**. Move-out balances relative to rent are **identical** at 123% in both cohorts. Damages at vacate are **22% lower** for waiver tenants. Whatever the deposit was doing, disciplining behaviour wasn't it. The deposit wasn't holding anyone accountable. It was holding their cash. ## Why that makes sense {#why-that-makes-sense} A single-month deposit rarely covered a real vacate balance, so its deterrent value was mostly theoretical. Replace it with [a rewards layer that pays out on a clean exit](https://www.leasesurance.co/zd-rewards) and the incentive shapes conduct better than a lump sum held hostage. Affordability changes at move-in. Intent at move-out doesn't. Demand is real, and the downside landlords fear doesn't appear in the numbers. We set out the portfolio case in [why South African institutional landlords are dropping cash deposits](https://www.leasesurance.co/blog/why-sa-institutional-landlords-are-ditching-cash-deposits). Figures: adoption is a same-store, signing-basis measure across properties offering the waiver; the R20m→~R35m figure is LeaseSurance's tracked leases-insured milestone. Churn, move-out-balance and damages comparisons are from a rent-normalised waiver-versus-deposit cohort analysis. ### About LeaseSurance {#about-leasesurance} LeaseSurance provides deposit-free lease insurance for residential and commercial portfolios across South Africa. [Speak to Us](https://www.leasesurance.co/contact)