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Deposit - what is a deposit and why is it needed?

Deposit - what is a deposit and why is it needed?

A deposit is a sum of money which the landlord will usually ask for before the beginning of any tenancy. The specific uses of a security deposit will need to be stipulated in your contract, though it is usually used to cover any damage and breakages inflicted, and sometimes outstanding bills and rent. Ordinarily a deposit will be equivalent to one to two months’ rent.

It is important that it is clearly stated in the contract why the deposit has been asked for and what it will be used for, as it can affect what deductions your landlord is able to make at the end of your tenancy.

It is important to check whether your deposit has been protected in a deposit protection scheme. Since 1st October 2010 it has been a legal obligation for all deposits that pertain to an Assured Shorthold Tenancy (where the total annual rent for the property is less than £100,000) to be protected by a deposit protection scheme. If a landlord has not done so then compensation may be awarded to the tenant by a court of law. 



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