Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Contract definition

What does Contract mean? In legal practice, a contract is the enforceable agreement by which parties set out promises and allocate risk, whether made orally, in writing or by conduct. The law of contract is principally case-law driven across England & Wales, Scotland, Northern Ireland and Ireland, with statutory interventions on formalities, construction and consumer protection. In England & Wales, Northern Ireland and Ireland, formation generally requires offer, acceptance, consideration and an intention to create legal relations. In Scotland, consideration is not required; a contract is formed by agreement (consensus in idem) with the necessary intention, with writing only needed in defined cases. Key features...

Acquisitions of let property: negotiating rent deposit transfers and outstanding rent reviews (England and Wales)

Published by a LexisNexis Property expert

Practice notes

What happens to Rent Deposits on a sale?

How a sale Contract should treat rent deposits ultimately depends on the wording of the relevant deposit deeds. Sellers ought to scrutinise those deeds early to determine whether the tenant needs to be a party to any document because, inevitably, that step takes time, sits outside the parties’ control, and the tenant will usually have less commercial drive than the seller and the buyer to move promptly.

There are generally three methods for handling rent deposits:

assignment
novation
new direct covenants between the buyer (as the new landlord) and the tenant

Whichever route is selected must match the deposit deed’s framework.

It is crucial that everyone follows the deed’s stipulated process; otherwise the rent deposit may have to be repaid, which creates an issue for the buyer. Sellers’ solicitors do not always confirm the exact requirements before sending out the draft contract, or they might include broad, generic wording to the effect that the seller will assign to the buyer whatever right, title and interest it has in each rent deposit deed, in each case subject to the terms on which the deposit is held...

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Web page updated on 21/05/2026

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