In Taiwan’s rental market, it’s common for tenants to pay a “deposit” to reserve a property before signing the lease. But what happens if the tenant changes their mind and decides not to rent? Can they get their money back? And does the landlord have the right to keep it? This article walks you through the Civil Code and real-world practices to help you understand your rights and obligations.
What Is a Deposit?
What most people call a “deposit” is legally referred to as a guarantee deposit (“dingjin” in Chinese).
According to Article 248 of the Civil Code:
“When one party receives a deposit from the other, it is presumed that a contract has been established.”
In other words, once the landlord receives the deposit, the law assumes that a contract has been formed. The money serves not just to reserve the rental unit but also acts as a guarantee of good faith that neither side will back out.
Deposit ≠ Dingjin? It’s About Intent, Not Terminology
Although the term “deposit” is widely used, only the legal term “dingjin” carries weight under the Civil Code.
In court, the name used is less important than the actual intent of both parties.
So even if a receipt says “deposit,” if both parties intended for the payment to secure the lease and prevent either side from backing out, it will be treated as a dingjin.
🕯️ Related Read: What’s the Difference Between a Security Deposit and a Reservation Deposit in Taiwan?
Civil Code Article 249: Who’s Responsible, Who Pays
When a lease cannot be finalized or executed, whether or not the deposit must be returned—and how much—depends on who caused the failure.
Civil Code Article 249 states:
“If non-performance of the contract is due to the fault of the party who paid the deposit, the deposit shall not be refunded. If it is due to the fault of the party who received the deposit, double the deposit must be refunded.”
Here are three common situations:
- Tenant Backs Out (Attributable to the Paying Party)
e.g., the tenant changes their mind or finds another property.
The landlord has the right to keep the full deposit.
- Landlord Backs Out (Attributable to the Receiving Party)
e.g., the landlord rents to someone else or withdraws the offer.
The tenant can demand double the deposit back.
- No One at Fault (Force Majeure)
e.g., the house is destroyed by an earthquake or typhoon.
The landlord usually must return the full deposit, though not double, based on fairness principles, even if not explicitly stated in the law.
No Legal Limit on Deposit Amount – But Always Get a Receipt!
The law does not set upper or lower limits on the deposit amount—it’s up to both parties to agree. However:
- Don’t pay too much upfront, just in case things don’t go as planned.
- Always ask for a written receipt or keep a transfer record.
Some tenants have lost money in court simply because they had no evidence of payment, especially in cases where landlords later denied receiving the deposit.
3-Day Contract Review Period—Can Tenants Back Out?
According to consumer protection laws and practice, residential leases are considered standard form contracts, and tenants are entitled to a minimum 3-day review period.
If the tenant changes their mind during this period and the landlord refuses to return the deposit, the landlord may be violating fair trade laws.
However, if the tenant has had the contract for more than three days and then backs out without fault on the landlord’s part, the landlord may lawfully refuse to return the deposit.
Summary: Who Caused It, Who Pays
Whether the deposit can be refunded doesn’t depend on whether it’s called a “dingjin” or “deposit,” but on the original agreement and who caused the contract to fail.
To avoid disputes, landlords and tenants should:
- Confirm the tenant has at least a 3-day contract review period
- Always issue or request a receipt for any deposit
- Set a reasonable deposit, typically 20%–30% of the monthly rent
