Knowledge Centre
Find the meaning of various terms related to renting & letting here.
When renting a new home, there's more to consider than simply picking a property and moving in. Especially when you're searching for a rental for the first time, there are several things to keep in mind. If you're new to the world of renting, you'll likely come across terms you're not familiar with, such as delivery condition, rent protection, and the rent tribunal. These are terms you really should know when you're renting a place on your own, as it's likely you'll deal with one or more of these aspects.
Deposit
What does this entail?
When you want to settle into a nice rental property, like an apartment or a rental house, there are several things you need to check to ensure everything is properly set up in the rental contract. Consider the balance between the amount of rent and what you get in return. There are some differences compared to buying a house. Financially, there are pros and cons to both sides. One thing that comes into play when renting a house is paying a security deposit. Here, you'll read more about all the matters related to paying a security deposit.
Reasons for a security deposit
When we talk about the deposit, we often mean the security deposit. This term will often be found in rental contracts. The security deposit you pay goes to the landlord of the property. This landlord can vary from a housing corporation to a private landlord. The difference is that a housing corporation is an organization, while a private landlord is an individual who rents out their property on their own initiative.
The reason a deposit is required is to give the landlord assurance about their property and any belongings. If the landlord rents out the property furnished, they have assurance regarding items like a sofa or television. If the tenant causes damage to the property or belongings, these can be partially or fully compensated from the deposit.
Another reason to ask for a security deposit is to provide the landlord with financial security from the tenant. If the tenant can pay the deposit, it gives reassurance to the landlord. Additionally, this deposit can also be claimed if the tenant falls behind on rent payments.
In summary, a tenant should initially get the full deposit back. If the landlord finds damages, they may withhold part or all of the deposit. Through the security deposit, the landlord has more financial security and reassurance that the property and furniture will be handled with care.The security deposit amount
The landlord can determine the amount of the deposit. However, this amount should not be too high. According to the government's guidelines, the deposit is typically three months of basic rent. This amount is considered reasonable. However, it is often the case that the security deposit amounts to one month of basic rent.
If the deposit turns out to be higher than expected, you may ask the landlord to provide a report on how the deposit was calculated. As a tenant, make sure you aren't taken advantage of, leading to unnecessarily high rent payments. You can negotiate if you're not comfortable with the amount. It's also advisable to ensure that the deposit is clearly mentioned in the rental contract and to pay it via bank transfer instead of cash. This way, you have additional proof in writing.