Damage deposit
Encyclopedia
A damage deposit or deposit is a sum of money
paid in relation to a rented item
to ensure it is returned in good condition. They are particularly common in relation to rented accommodation
, where they may also be referred to as a tenancy deposit or in some places a bond.
The owner of the item (the landlord
in the case of accommodation) will take a sum of money from the person(s) renting the item (the tenant). If the item is returned in good condition at the conclusion of the tenancy the owner should return the deposit. If the item is returned with damage the cost of repairing that damage may be charged against the deposit, and part (or none) of the deposit will be returned.
In some jurisdiction
s such as Victoria
, Australia
, bond funds are held in trust by a government body and released upon agreement from both parties, failing accord of the two parties, an independent tribunal
determines the distribution of the bond. In the United Kingdom
deposits for all assured shorthold tenancies
must be held in a tenancy deposit scheme
, under the terms of the Housing Act 2004
.
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
paid in relation to a rented item
Renting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
to ensure it is returned in good condition. They are particularly common in relation to rented accommodation
Accommodation
Accommodation may refer to:* A dwelling* A place of temporary lodging* Accommodation , a theological principle linked to divine revelation within the Christian church* Accommodation , a term used in United States contract law...
, where they may also be referred to as a tenancy deposit or in some places a bond.
The owner of the item (the landlord
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
in the case of accommodation) will take a sum of money from the person(s) renting the item (the tenant). If the item is returned in good condition at the conclusion of the tenancy the owner should return the deposit. If the item is returned with damage the cost of repairing that damage may be charged against the deposit, and part (or none) of the deposit will be returned.
In some jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
s such as Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, bond funds are held in trust by a government body and released upon agreement from both parties, failing accord of the two parties, an independent tribunal
Tribunal
A tribunal in the general sense is any person or institution with the authority to judge, adjudicate on, or determine claims or disputes—whether or not it is called a tribunal in its title....
determines the distribution of the bond. In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
deposits for all assured shorthold tenancies
Assured shorthold tenancy
The Assured Shorthold Tenancy is the default tenancy for most dwellings in England and Wales. It is a form of Assured tenancy with limited security of tenure, which was introduced by the Housing Act 1988, with important changes made by the Housing Act 1996....
must be held in a tenancy deposit scheme
Tenancy Deposit Scheme
Under the provisions of the United Kingdom Housing Act 2004 every landlord or letting agent that takes a deposit for an assured shorthold tenancy in England and Wales must join a tenancy deposit scheme. The new regulations came into effect from 6 April, 2007....
, under the terms of the Housing Act 2004
Housing Act 2004
The Housing Act 2004 is an Act of the Parliament of the United Kingdom. It introduces Home Information Packs, which came into force for homes of four or more bedrooms on 1 August 2007. It also significantly extends the regulation of houses in multiple occupation by requiring HMOs to be licensed...
.
External links
- Tenants' information guide on deposits from Shelter (UK)
- Tenants' Rights: Security Deposits (USA) from the Connecticut Network for Legal Aid
- Tenants' information guide on deposits (UK) aimed at students, but useful for most types of tenants.
- Tenancy Deposit Scheme for Regulated Agents (UK) - a scheme aiming to aid fairness in tenancy deposits.