Rent Deposit Deeds

When a tenant is taking a new lease from a landlord, the tenant has to prove that he will be able to afford the rent.  He usually does this by providing references – frequently a bank reference and two trade references.

If the landlord is not that confident of the tenant’s ability to pay the rent, he may also require the tenant to pay a rent deposit.  Typically, this could be 6 months’ rent at the start of the lease and would be documented in the form of a RENT DEPOSIT DEED.  The deposit is then held in a separate account. 

Usually, the tenant would get this money back at the end of the lease or when the tenant transfers the lease to someone else with the landlord’s consent. 

However, if the tenant fails to pay the full rent on the rent payment days, the landlord can dip into the rent deposit account and take the shortfall.  At the same time, he can insist that the tenant tops up the balance in the rent deposit account. 

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