A property owner may require a deposit on their property from a tenant. The deposit is meant as collateral against the store that could occur as a result of the tenant. The deposit is meant to be kept separate from the rent. In fact the covenants of the lease may require the deposit to be placed in a special account for the duration of the licence to occupy agreement. If the tenant follows the covenants in the lease to the letter they can expect the deposit to be returned. To make this entire process legal a rent deposit deed is necessary for company to company rentals. It is not unlike the deposit scheme in a residential tenancy.
The rent deposit deed will state the amount of income required from the tenant to be given to the landlord at the beginning of the lease. The deed will need to state provisions in which the landlord is favoured if the tenant defaults. If the tenant defaults the landlord is able to keep the deposit as missing rent. The deposit is meant to lower the risk to the landlord.
In business the landlord will have VAT. The VAT can be specified as part of the rent deposit deed. In 2010 the VAT will be increased, which means the landlord needs protection from this increase. It can mean that the landlord raises the deposit in order to be protected as well as raising the rent on a property.
The law of England and Wales states that a business does not have to hold the deposit in a deposit scheme. The money does need to be held in a separate account though. Usually a solicitor of the business will be responsible for holding on to the funds. The deposit account is often going to pay the landlord interest, and keep the landlord from misappropriating the funds. The interest can be paid to the tenant at the end of the agreement. However, the deed for rent deposit can also state that the interest will go towards any repairs necessary to the building. The terms you need to follow for the rent deposit deed will need to be explicit in the document you use.
For instance, if the tenant is late or misses a payment the landlord can withdraw money from the deposit account at any time. This helps to keep the loss the landlord has at a minimum. They would have to return the money to the account if the tenant makes good. At the end of the licence to occupy the money is returned and all UK laws must be adhered to.
Our site is set up to provide you with business and commercial documents you require. Our site is a DIY place for legal documents. For a small fee you are able to download a general rent deposit deed. The terms in the deed can be changed within the UK laws for your situation. Before making changes that seem extreme you need to speak with a solicitor. Otherwise, the document will hold up in a court of law. It has been drafted by a solicitor to ensure it is legal. The template document can be saved to your computer for quick and easy access.
At any time you need the rent deposit deed you can reuse it, without paying another fee. Furthermore, once the deed has been signed by both parties it is legally binding in a court of law. While the rent deposit deed does not have to be registered with a municipal court, both parties should have copies and it can be used if the landlord or tenant has breached the contract.