How Much Deposit Can a Landlord Legally Charge? Three Statutory Limits on Deposits, Termination and Subleasing

How Much Deposit Can a Landlord Legally Charge? Three Statutory Limits on Deposits, Termination and Subleasing

Since the Rental Housing Market Development and Regulation Act took effect, landlords and property managers in Taiwan have statutory duties that cannot be contracted away.

These three are the most commonly breached — and the consequences are not trivial.

Limit one: the deposit cannot exceed two months' rent

Article 7 is unambiguous:

「The amount of the security deposit shall not exceed the total of two months' rent.」

If the monthly rent is NT$20,000, the deposit cap is NT$40,000. Charging three months is unlawful.

The same article also fixes the point of return:

「Upon extinction of the lease, when the lessee has returned the rental housing and discharged the obligations arising under the lease, the lessor shall return the deposit, or the balance after set-off against those obligations.」

In other words: once the lease ends, the property is returned and outstanding sums are settled, the deposit is due back. Debts may be set off, but the remainder must be returned.

Withholding it indefinitely, or delaying on the basis of "I still need to check for damage," does not hold up.

Limit two: early termination requires written notice within statutory periods

A landlord cannot terminate at will. Article 10 sets out the statutory grounds:

• The lessee damages the rental housing or its fixtures and neither repairs nor provides equivalent compensation
• The lessee is in arrears on rent or charges amounting to two months' rent, and refuses to pay after being given a reasonable period to do so
• The lessee sublets the property without the lessor's written consent
• The lessor needs to recover possession for reconstruction
• Other statutory grounds for early termination

Note the phrasing on arrears: it is not two late payments, but an accumulated amount reaching two months' rent.

Even where statutory grounds exist, the landlord must still provide written notice with supporting evidence, observing these periods:

• Grounds 1 to 3 and 5 → 30 days before termination
• Recovery for reconstruction → 3 months before termination

Without written notice, evidence, and adequate advance warning, the validity of the termination is open to challenge.

Limit three: subleasing requires written consent and notice within 30 days

This is where property managers and intermediate landlords most often run into trouble. Article 9:

「A sublessor shall obtain the written consent of the lessor before subletting all or part of the rented housing.」

Obtaining consent is not the end of it. Two further duties apply:

• When signing the sublease, the sublessor must provide that written consent to the sub-lessee
• The lessor must be notified in writing within 30 days of signing the sublease

The sublease must also state:

• The scope of the leased property as between sublessor and lessor
• The lease term
• The grounds on which the lease may be terminated

Omitting any of these can throw the entire sublease arrangement into dispute — and "subleasing without written consent" is itself a statutory ground for the original lessor to terminate early under Article 10.

One more thing: the lease is deemed a consumer relationship

Article 5 provides:

「The relationship between the lessor and the lessee under a lease contract shall be deemed a consumer relationship, and the relevant provisions of the Consumer Protection Act shall apply.」

This means the landlord is treated as a business operator subject to consumer protection law.

More significantly, the same article provides that the mandatory and prohibited provisions for master lease contracts are announced by the central competent authority; clauses breaching them are void, and mandatory provisions form part of the contract even if they were never written into it.

In other words:

• What you omitted, the law writes in for you
• Unfavourable terms you added may simply be void

The risk of assembling your own contract template is higher than it looks.

A landlord's self-check

• Does the deposit exceed two months' rent?
• Are the conditions and timing for returning the deposit clearly stated?
• Are your grounds for termination actually statutory grounds?
• Do you have written notice and supporting evidence, with sufficient advance notice?
• For subleases, do you have written consent, and did you notify the lessor within 30 days?
• Are you using the mandatory contract provisions announced by the central competent authority?

All of these "written" requirements can now be satisfied electronically — under Article 5 of the Electronic Signatures Act, provided the content can be presented in full and remains accessible for later inspection. See: Are Electronic Leases Legal in Taiwan? A Landlord's Guide After the 2024 Electronic Signatures Act Amendment

Turning legal requirements into a workflow

The rules are not complicated. What is hard is remembering them for every unit and every contract.

The Hao Future App builds them into the workflow:

• Deposit fields prompt the statutory cap based on the rent
• Termination grounds and notice periods follow the Act
• Sublease consent and notice deadlines are recorded and auditable
• All written notices retain signing history and timestamps

Ten units can be managed from memory. A hundred cannot.

Disclaimer

This article summarises the law in force at the time of writing and is provided for general information only. It does not constitute formal legal advice and is not a substitute for assessment by a qualified lawyer. Circumstances differ; for specific disputes, litigation or significant transactions, please consult a practising lawyer. Where this translation differs from the Traditional Chinese original, the Chinese version governs.

Sources cited

• Rental Housing Market Development and Regulation Act, Articles 5, 7, 9, 10
• Electronic Signatures Act (comprehensively amended 15 May 2024), Article 5