Rent deposit deed

This document is a draft rent deposit deed.

The deed anticipates the deposit of a sum of money by the tenant as security for performance of its covenants under the relevant lease. To provide the landlord with security in the event of the tenant's insolvency, the deed includes provisions whereby a charge is created in favour of the landlord.

In all probability, the deposit arrangement is a financial collateral arrangement under the Financial Collateral Arrangements (No.2) Regulations 2003 (SI 2003/3226) (as amended to take account of the Companies Act 2006). Under these regulations, collateral security arrangements between companies (such as rent deposits) no longer need to be registered at Companies House, and do not suffer from a consequent risk of inability to enforce security during an insolvency. Despite these regulations, the deed nevertheless provides for the registration of the charge.

Before using this precedent document, it is advisable to read the drafting notes accompanying it. If you have any queries or comments about this document or the drafting notes, use the contact tab at the top of the page.

For comparison, the City of London Law Society rent deposit deed can be seen by clicking on: City of London deed. Despite its status, this document has not been met with universal approval (see, for example, an article by Sue Highmore in the Estates Gazette, 15 August 2009, page 60).