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 ar ...
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
Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...
of the item (the
landlord
A landlord is the owner of a house, apartment, condominium, land, or real estate which is rented or leased to an individual or business, who is called a tenant (also a ''lessee'' or ''renter''). When a juristic person is in this position, t ...
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 installa ...
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' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels.
J ...
s such as the
Australian states of
Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
and
Queensland
)
, nickname = Sunshine State
, image_map = Queensland in Australia.svg
, map_caption = Location of Queensland in Australia
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, establishe ...
and in
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island coun ...
,
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 single ...
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 Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
deposits for all
assured shorthold tenancies must be held in a
tenancy deposit scheme, under the terms of the
Housing Act 2004
The Housing Act 2004 (c 34) is an Act of the Parliament of the United Kingdom. It introduced Home Information Packs, which have since been abandoned. It also significantly extends the regulation of houses in multiple occupation by requiring so ...
.
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 if the ...
*
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. I ...
*
Rental agreement
*
Security deposit A security deposit is a sum of money held in trust either as an initial part-payment in a purchasing process (often used to prevent the seller's selling an item to someone else during an agreed period of time while the buyer verifies the suitabili ...
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