Which Deposit Is For What?

Taking deposits from a renter before letting your property out is a common practice. The purpose of the deposit is to cover the cost of repair if the property gets damaged by the tenant. The landlord may also take a deposit for taking a property off the rental list while the rental agreement is undertaken. In this article we will review the different types of deposits that a tenant can be charged for.

A security deposit – it covers the assets that have been damaged beyond the usual wear and tear, including the carpets, it also covers the cost of cleaning services Chingford companies are usually great assistants in managing this stage,  garbage removing and guarantees for unpaid financial obligations. The coverage of the security deposit should be stated in the rental contract it usually amounts to six week’s rent.

Security deposits taken by the landlord are protected by authorized deposit schemes. Depending on the schemes the methodic for claiming the deposit is different. In some schemes the burden of proof falls on the landlord therefore the landlord will have to prove his case on why the deposit should be retained of deducted. If at the end of the tenancy the landlord keeps the deposit or a part of it to cover damages the retained amount is considered as income from rental business, however if the deposit is fully returned the deposit is not considered as income. If the retained deposit is used to pay the cleaning bill for conducting an end of tenancy cleaning Chingford based firm.

Holding deposits are another variation of deposits frequently requested by landlords, especially in time where the search for rental units is high. As the name hints the holding deposit is used to reserve a property until the rental agreement is finally signed by both parties. The amount of the deposit usually totals to two week’s rent, the terms according to which the deposit could be held by the landlord are written in a holding deposit agreement. If the letting deal fails to be signed the landlord could withhold a part of the deposit as a compensation for not having the rental unit on the market within the reservation period, but if the rental deal goes ahead the deposit is either returned to the tenant or its amount is deduced from the rent of the first month.