South Australia Commercial Security Deposit Laws

Under the Retail and Commercial Leases Act 1995, commercial landlords in South Australia have specific rules governing how much security they can request and how it must be managed. These rules primarily apply to "retail shop leases" falling within the Act's scope.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed solicitor in South Australia for advice specific to your situation. Information last verified: March 2026.

Maximum Bond Amount

For leases covered by the Retail and Commercial Leases Act, a landlord can request a security bond of up to three months' rent, exclusive of GST.

If the rent increases during the lease term, the landlord can request an increase to the security bond, provided:

• At least two years have elapsed since the bond was last increased.
• The total bond amount does not exceed the current three months' rent limit.
• 60 days' written notice is given to the tenant.

Bond Lodgement

All security bonds paid under a retail shop lease must be lodged with the Small Business Commissioner (SBC).

• Landlords must lodge the bond within 7 days of receiving it.
• Registered agents have up to 28 days to lodge the bond.

The bond is held by the SBC for the duration of the lease. Neither the landlord nor the tenant can access the funds without mutual agreement or a court/tribunal order.

Bank Guarantees

As an alternative to a cash bond, it is very common in SA commercial leasing for the landlord to accept a bank guarantee instead. Under a bank guarantee, the tenant's bank promises to pay the landlord a specified amount on demand if the tenant defaults.

• No Statutory Cap: While the cash bond is capped at 3 months' rent, there is no legislated limit on the value of a bank guarantee. However, common practice is for bank guarantees to be between 3 and 6 months' rent.
• Return: The landlord is required to return a bank guarantee within two months after the lease expires and the tenant has fulfilled all their end-of-lease obligations (including "make good" requirements).

Returning the Cash Bond

At the end of the lease:

1. Mutual Agreement: If both parties agree on deductions, they complete the appropriate form and submit it to the SBC.
2. Dispute: If they cannot agree, either party can apply to the Magistrates Court (not SACAT for bond refund disputes specifically) for a determination on how the bond should be distributed.

Leases Outside the Act

For commercial leases that fall outside the scope of the Retail and Commercial Leases Act (e.g., annual rent exceeds $420,000, or the tenant is a publicly listed company), there are no statutory limits on the bond amount, no requirement to lodge the bond with the SBC, and no prescribed return timeline. Everything is governed entirely by the lease agreement.

Best Practices for SA Commercial Landlords

1. Lodge the Bond Promptly: A 7-day lodgement window is tight. Lodge the bond with the SBC within 48 hours to avoid any compliance risk.
2. Document the Property Condition: Conduct a thorough pre-lease and end-of-lease inspection with photographs and video. This evidence is critical if the bond dispute escalates to the Magistrates Court.
3. Track Bank Guarantee Expiry: If a tenant's bank guarantee has an expiry date, ensure it is renewed well before it lapses. If the guarantee expires, you lose your security.

How Landager Can Help

Landager provides robust financial tracking for your SA commercial portfolio. Easily record bond lodgement dates, track bank guarantee expiry deadlines, and monitor the 2-year interval rule for bond increases, ensuring you never miss a compliance obligation under the Retail and Commercial Leases Act.

Back to South Australia Commercial Laws Overview.