Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Costs definition

What does Costs mean? In litigation, costs are the legal fees, disbursements, court fees and VAT incurred in bringing, defending or appealing a claim, and the sums a court or tribunal may order one party to pay another for those liabilities. The concept is governed by procedural rules and case law rather than a single statutory definition: England and Wales (CPR 44–47), Northern Ireland (RCJ Ord 62), Scotland (where the equivalent term is expenses), and Ireland (Legal Services Regulation Act 2015 and the Legal Costs Adjudicators). The general approach is broadly consistent, subject to local terminology and procedure. Typical features include the discretionary rule...

Commercial Lease Rent Deposits: Charge vs Trust, VAT, Drawdowns, Top-ups, Insolvency, Assignment and Reversion Transfers (England and Wales)

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Practice notes

Nature and purpose of a rent deposit

A rent deposit is an amount lodged by the tenant with the landlord, serving as security against unpaid rent and/or the landlord’s losses arising from any other breach of the lease (including the costs of enforcement), by way of protection for the landlord. In that respect, the label ‘rent deposit’ is a misnomer indeed, as the fund is not confined to rent arrears (however broadly ‘rent’ is defined in the lease). For more detail and context, see the Amount of the initial deposit set out below. Landlords typically request one when a lease is granted or assigned to a tenant considered a ‘weak covenant’, ie a tenant unable to give the landlord sufficient evidence of its financial standing before becoming the tenant, and not yet proving robust financial standing. That said, a landlord may equally require a deposit during the term if the current tenant starts to show indications of financial weakness, and begins to give cause for concern. A rent deposit can be taken instead of, or as well as, a guarantee, sitting alongside a guarantee if required. Where rent is payable monthly or quarterly in advance by the tenant and the...

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Web page updated on 21/05/2026

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