General

'Key' money is illegal

It is illegal for a landlord, supervisor or managing agent to require a prospective tenant to pay a 'bonus', commonly called 'key money'.  This amount is paid in addition to the rental and security deposit. This form of exploitation has become quite common in South Africa and Zimbabwe and, like in the United States of America, in the Netherlands (sleutelgeld), Sweden, Pakistan (paghri), Japan (gratitude money) and Australia (key money) it is as a result of the acute housing shortage.

Through this exploitative practice, the landlord, supervisor, or managing agent gives preference to a prospective tenant who is able to pay the bonus or 'premium'.  A receipt is not issued and the amount usually not refunded. 

Note:
Key deposit is a minimal amount paid for keys to the rental property that is refundable when the dwelling is vacated and the keys returned to the landlord.
Security deposit is the rental or damage deposit the tenant pays that is refundable and regulated by the Rental Housing Act.

An extract from Landlord and Tenant - Rights and Obligations

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