Tenants penalised over rent deposits

Landlords of commercial properties are still wielding a heavy stick over tenants in the form of rent deposits. All too often we see tenants, lacking in negotiating power or strength of covenant to dictate their own terms, being required to provide their landlord with a large rent deposit at lease commencement

Come the end of the lease, the tenants - having paid all their rents and other sums due under the lease - fully expect that deposit to be returned. In accordance with most rent deposit deeds, the landlord is perfectly entitled to withhold the rent deposit against settlement of any dilapidations claim.

It is a remarkable coincidence that all too frequently the dilapidations claim matches or generally exceeds the amount of the rent deposit.

Many of these claims are grossly overstated and the landlords, which more often than not are large well-known institutions, refuse to come to the negotiating table, as do their advisers.

The cost of legal intervention to recover the rent deposit is both time-consuming and expensive for the tenant, facts about which the landlords are well aware.

At a time when there has been comment about lengthy payment terms to suppliers, it is equally relevant to bring this issue to the fore and stop landlords exerting undue influence on unsuspecting tenants.

Paul Lande, CEO, Dilaps UK

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