A damage deposit or deposit is a sum of
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: m ...
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, bond deposit, or bond.
The
owner of the item (the
landlord
A landlord is the owner of property such as a house, apartment, condominium, land, or real estate that is rented or leased to an individual or business, known as a tenant (also called a ''lessee'' or ''renter''). The term landlord appli ...
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 beyond normal wear and tear, the cost of
repair
The technical meaning of maintenance involves functional checks, servicing, repairing or replacing of necessary devices, equipment, machinery, building infrastructure and supporting utilities in industrial, business, and residential installat ...
ing that damage may be charged against the deposit, and part (or none) of the deposit will be returned.
In some
jurisdiction
Jurisdiction (from Latin 'law' and 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, the concept of jurisdiction applies at multiple level ...
s such as the
Australian
Australian(s) may refer to:
Australia
* Australia, a country
* Australians, citizens of the Commonwealth of Australia
** European Australians
** Anglo-Celtic Australians, Australians descended principally from British colonists
** Aboriginal Aus ...
states of
Victoria and
Queensland
Queensland ( , commonly abbreviated as Qld) is a States and territories of Australia, state in northeastern Australia, and is the second-largest and third-most populous state in Australia. It is bordered by the Northern Territory, South Austr ...
and in
New Zealand
New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...
,
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
A tribunal, generally, is any person or institution with authority to judge, adjudicate on, or determine claims or disputes—whether or not it is called a tribunal in its title. For example, an advocate who appears before a court with a singl ...
determines the distribution of the bond. In the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
deposits for all
assured shorthold tenancies must be held in a
tenancy deposit scheme, under the terms of the
Housing Act 2004.
See also
*
Collateral (finance)
In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as a lender's protection against a borrower's default and so can be used to offset the loan i ...
*
Key money
Key money is one of several forms of payment made to a landlord. The term has various meanings in different parts of the world. It sometimes means money paid to an existing tenant who assigns a lease to a new tenant where the rent is below market. ...
*
Rental agreement
*
Security deposit
A security deposit is a sum of money held in trust.
In leasing, security deposits, also known as "rent deposits", are required most often by lessors of automobiles, residential property, and commercial real estate.
Security deposits in the Un ...
References
External links
Information on tenancy 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.
{{DEFAULTSORT:Damage Deposit
Renting