A Rent Deposit is a specified sum of money, usually calculated on the basis of a particular number of months’ rent, and is payable by the tenant. The landlord will hold this as security for the payment of rent and the tenant’s performance of the tenant’s covenants in the lease.
A Rent Deposit Deed should be entered by the landlord and tenant alongside the lease and this will specify the circumstances in which the landlord can access this fund, such as where the tenant has not paid rent on time.
A rent deposit may be required where the tenant is a new company with no filed accounts or where no references are available prior to entering the lease.
Standard commercial terms dictate that a rent deposit will usually be 3/6 months payable prior to completion.