20th April 2017

Tenant Question – Rent deposit deed and lease renewal

At a glance

My company has occupied an office suite under a lease for 3 years. We have always paid the rent on time and haven’t done anything to upset the landlord. When we entered into the lease, we also entered into a rent deposit deed. Our lease is coming to an end and I am in the process of negotiating the terms of a new lease with my landlord. They want me to enter into another rent deposit deed. Is this reasonable?

Firstly, the current rent deposit will have to be repaid on expiry of the current lease.

This time round, you are now a “known entity” to the landlord and you have told us that you have paid the rent on time and been a “good” tenant (presumably having materially complied with the obligations placed upon you by the lease).  This should work in your favour and suggest that the Landlord doesn’t need a rent deposit deed.

That said, the Landlord obviously controls the building and the lettings of it.  It might be that the Landlord is trying to ‘future proof’ their portfolio in case things change in the future.

Are you willing to provide the company’s accounts to your landlord?  Obviously if these are strong (and getting stronger), then the argument against a rent deposit being justified or required is further improved.   It might be worth doing this to see if you can persuade your landlord otherwise.  However, unfortunately for you, the new lease is within the gift of your landlord and as a rent deposit deed is a commercial term, you may be unable to persuade them to drop this point.

For any assistance with your commercial property needs, please contact Isabel Alderton-Sell by calling her on +44(0)1293 558520 or by emailing Isabel.

This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.

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