Understanding Rent Control, Deposits & Rental Arrears in Bermuda

In Bermuda, residential properties with an Annual Rental Value (ARV) of $22,800 or less fall under Rent Control, meaning the rent you can charge, and how you increase it, is regulated by law under the Rent Increases (Domestic Premises) Control Act 1978. If you are a landlord of a rent-controlled unit, you must work closely with the Consumer Affairs Rental Unit to ensure your rental rates, increases, and deposits comply with Bermuda law.

Registering a New Rent-Controlled Unit

If you build a new unit with an Annual Rental Value (ARV) of $22,800 or less and rent it for the first time, you must notify the Consumer Affairs Rental Unit and provide a copy of the first tenancy agreement.

• The rent charged in this first agreement becomes the “first registered rent.”

• If you later want to charge more than this amount, you must apply for approval before increasing the rent.

• Offering “friends and family” discounts to your first tenant may negatively impact your ability to raise rents later, so set the first rent carefully.

How Rent Increases Work

Landlords can request a rent increase in two ways:

1. When Landlord & Tenant Agree

If both parties agree to the increase:

• The landlord must file Form RC-2 with the Rent Commissioner.

• A tenant cannot agree to an increase during the first six months of tenancy.

Note: Tenants receiving Financial Assistance cannot agree to a rent increase, landlords must submit Form RC-8 instead.

When the Tenant Does Not Agree

If the tenant does not agree to the increase:

• The landlord must apply using Form RC-8 (in triplicate).

• The Rent Commissioner will review the request and decide.

Vacant Units

If a unit is vacant and the landlord wants to charge a new tenant more than the registered rent, they must apply using Form RC-7 before advertising or offering the new rental price.

Advertising Rental Units

A landlord cannot:

• Advertise or charge rent above the approved registered rent, or

• Fail to disclose the previous rent and any approved rent increases.
  

Failure to comply can result in:

• $1,000 fine,

• Up to six months imprisonment, or

• Both.

Tenants who discover they were overcharged should not stop paying rent. Instead, they can apply to the court to recover the excess.

Damage Deposits vs. Key Money

Bermuda law strictly regulates deposits for rent-controlled properties.

Legal: Damage / Security Deposit

A landlord may legally charge up to half a month’s rent (two weeks) as a damage deposit to cover:

• Unpaid rent

• Damage caused by the tenant

• Removal costs of tenant belongings
  

Charging more than this is illegal unless refunded to the tenant.

Illegal: “Key Money”

It is unlawful for a landlord to demand:

• Extra payment to secure the unit, or

• Inflated charges for furniture as a condition of tenancy.
  

Demanding or accepting key money can lead to:

• $1,000 fine,

• Up to six months imprisonment, or

• Both.

Getting Your Deposit Back

At the end of a tenancy, tenants are entitled to the return of their damage deposit unless the landlord has a valid reason to deduct money, such as:

• Actual damage beyond normal wear and tear

• Missing or broken items from the inventory
  

Landlords cannot deduct for:

• Ordinary wear and tear

• Damage caused by their own negligence (e.g., failure to repair leaks)
  

Tenants should:

• Complete all move-out obligations in the tenancy agreement

• Request their deposit in writing (email recommended)

• Ask for written reasons and receipts if money is withheld
  

If the landlord refuses to return the deposit, the tenant may need to consider legal action.

Understanding Rental Arrears

Tenants must pay rent on time. Falling behind means you are in rent arrears, which can lead to eviction. If you fall behind:

• Act quickly, do not ignore the problem.

• Confirm whether the arrears are truly your responsibility:

  • Joint tenants share responsibility.

  • Separate tenancy agreements mean separate responsibility.

  • New tenants are not responsible for previous tenants’ arrears (unless the tenancy was formally assigned to them).

• Check your personal records (bank statements, receipts) against your landlord’s records.
  

If arrears are confirmed, Consumer Affairs recommends negotiating a repayment plan:

• Make payments realistic, you must be able to sustain them.

• Put the plan in writing and have both parties sign.

• Even partial payments can help if the matter goes to court.

If the landlord refuses to negotiate, continues to pursue eviction, or demands arrears that are not yours, you may need legal advice.

Final Notes

Both landlords and tenants have legal obligations under Bermuda’s rental laws. Understanding how rent control works, how deposits are managed, and how arrears should be handled helps ensure fairness, transparency, and compliance on both sides. If landlords or tenants need support, they should contact Consumer Affairs for guidance or assistance.