Deposit

The term “deposit” is broadly used to describe a sum of money that is initially given from one party to another. This can be done to either secure a sale of an item or as security of the safe return of said item once a rented period is complete. Though deposits are used in a wide range of financial transactions for various purposes, they are especially common in relation to rented accommodation. Deposits will only be repaid on the premise that the item (or rented property) is eventually returned in good condition. Deposits for rented accommodation are often known as security deposits or bonds. If, at the end of the tenancy, the property has endured serious damage beyond usual wear and tear, the deposit will be withheld. Under the terms of the Housing Act 2004, all deposits for shorthold tenancies within the United Kingdom must be held in a third-party tenancy deposit scheme. This ensures the deposit is not inappropriately spent by the landlord.