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UK Rent Deposit Deed Template (Commercial Lease)
Draft a UK Rent Deposit Deed for a commercial business tenancy within the meaning of Part II of the Landlord and Tenant Act 1954. The deed regulates how the deposit is held, the permitted deductions, the release conditions, the interest treatment, and (in Expert mode) the trust-on-deposit framework under the Trustee Act 2000, dilapidations apportionment methodology, insolvency carve-out, top-up obligation, assignment replacement deposit, Schedule of Condition cross-reference, and statutory-demand + CRAR interaction. NOT for residential tenancies — residential deposits require TDS / mydeposits / DPS protection within 30 days of receipt; non-compliance generates 1-3× deposit penalties under the Housing Act 2004.
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Rent Deposit Deed (Commercial Lease)
In Respect Of The Property At Ground Floor And Basement, 14 Margaret Street, London W1W 8SH · Lease Dated 2026-04-15 · Deposit £72,000.00
LANDLORD
Cavendish Place Holdings Ltd
38 Cavendish Square, London W1G 0PT
Company No. 07418293
Company No. 07418293
By: Geoffrey Walter Templeton, Director
TENANT
Nordic Heritage Coffee Roasters Ltd
14 Margaret Street, London W1W 8SH
Company No. 11829304
Company No. 11829304
By: Anders Bjorn Petersen, Managing Director
Effective: 2026-06-03
Commercial business tenancy · LTA 1954 Part II
THIS DEED is made on the date set out above between the Landlord (a UK private limited company) and the Tenant (a UK private limited company). (A) The Landlord and the Tenant have entered into a Lease dated 2026-04-15 for a term of 120 months in respect of the property described in clause 1 (the "Lease"). (B) The Lease constitutes a business tenancy within the meaning of Part II of the Landlord and Tenant Act 1954. (C) The Tenant has agreed to pay to the Landlord the sum of £72,000.00 by way of security for the Tenant's obligations under the Lease, on the terms set out in this Deed (the "Deposit").
1.
THE PROPERTY
1.1 The property the subject of this Deed is Ground Floor and Basement, 14 Margaret Street, London W1W 8SH comprising the ground-floor retail unit (approximately 850 sq ft) and the basement storage area (approximately 320 sq ft) together with all fixtures and fittings as more particularly described in the Lease. The Lease referred to above demises the Property to the Tenant on the terms and conditions set out therein.
2.
THE DEPOSIT AND HOLDING
2.1 The Tenant shall pay to the Landlord (or its nominated trustee under clause 2.3) the sum of £72,000.00 (representing 6 months' rent) by way of security for the due performance of the Tenant's obligations under the Lease. 2.2 The Deposit shall be held by the Landlord's solicitor on trust in accordance with the Trustee Act 2000 separately from the Landlord's other monies in a dedicated interest-bearing account at a UK clearing bank. 2.3 Subject to clause 5 (Interest), interest shall be paid to the Tenant on the Deposit at a rate of 3.5% per annum.
3.
PERMITTED DEDUCTIONS FROM THE DEPOSIT
3.1 The Landlord may apply the Deposit (or any part of it) towards any of the following:
• arrears of rent, service charge, insurance rent or any other sum due under the Lease;
• any sum reasonably and properly incurred by the Landlord in remedying any breach of the Tenant's covenants under the Lease;
• dilapidations (subject to clause 8 where the dilapidations methodology applies);
• legal and surveyor costs reasonably incurred by the Landlord in connection with any breach;
• any other sum properly payable to the Landlord under the Lease.
3.2 The Landlord shall serve written notice on the Tenant within 28 days of any application from the Deposit setting out the amount applied, the reason for the application and the remaining balance.
3.3 Additional permitted deductions:
Additional permitted deductions include: (a) any unpaid utility charges where the Tenant is contractually liable; (b) any unpaid contributions to the Insurance Rent under clause 6 of the Lease; (c) all reasonable third-party costs incurred by the Landlord in enforcing the Tenant's repairing covenants under clause 4 of the Lease.
• arrears of rent, service charge, insurance rent or any other sum due under the Lease;
• any sum reasonably and properly incurred by the Landlord in remedying any breach of the Tenant's covenants under the Lease;
• dilapidations (subject to clause 8 where the dilapidations methodology applies);
• legal and surveyor costs reasonably incurred by the Landlord in connection with any breach;
• any other sum properly payable to the Landlord under the Lease.
3.2 The Landlord shall serve written notice on the Tenant within 28 days of any application from the Deposit setting out the amount applied, the reason for the application and the remaining balance.
3.3 Additional permitted deductions:
Additional permitted deductions include: (a) any unpaid utility charges where the Tenant is contractually liable; (b) any unpaid contributions to the Insurance Rent under clause 6 of the Lease; (c) all reasonable third-party costs incurred by the Landlord in enforcing the Tenant's repairing covenants under clause 4 of the Lease.
4.
RELEASE OF DEPOSIT
4.1 Subject to clause 3, the Landlord shall release the Deposit (less any sums applied under clause 3 and any interest treatment under clause 5) to the Tenant within 28 days of: the natural expiry of the Lease at the end of the contractual term where there is no subsisting breach by the Tenant. 4.2 Where there is a dispute regarding any deduction, the Landlord shall release the undisputed balance within the same period.
5.
INTEREST
5.1 Interest shall be paid to the Tenant on the Deposit at a rate of 3.5% per annum. 5.2 Any interest paid to the Tenant under this clause shall be paid annually (or, if earlier, on release of the Deposit) and shall be subject to deduction of any income tax payable as a matter of law.
6.
TRUST DEPOSIT STRUCTURE
6.1 The Deposit shall be held by Hartwell Cromer LLP — Real Estate Department of 47 Lincoln's Inn Fields, London WC2A 3PE (the "Trustee") on trust for the Landlord and the Tenant in accordance with the Trustee Act 2000. 6.2 The Trustee shall: (a) deposit the Deposit in a designated client account at a UK clearing bank; (b) act in accordance with the Trustee Act 2000 duty of care (s.1); (c) not commingle the Deposit with the Trustee's general office account; (d) pay out the Deposit only on the joint written instructions of the Landlord and the Tenant, or in default of agreement, on the determination of a competent court or arbitrator. 6.3 In the event of the Trustee's insolvency or inability to act, the Landlord and the Tenant shall appoint a replacement trustee within 28 days.
7.
TOP-UP OBLIGATION
8.1 Whenever the Deposit falls below the original amount (as a result of any application under clause 3), the Tenant shall pay to the Landlord (or the Trustee, as the case may be) a top-up payment to restore the Deposit to the original amount within 14 days of written demand. 8.2 Rent-increase top-up. Where the rent under the Lease increases (whether by rent review, indexation or otherwise), the Tenant shall pay an additional top-up to maintain the Deposit at the same proportion of the new rent within 14 days of the rent increase taking effect.
8.
ASSIGNMENT — REPLACEMENT DEPOSIT
9.1 On any assignment of the Lease in accordance with its terms, the outgoing Tenant shall be released from this Deed on payment by the incoming assignee of a replacement deposit on substantially equivalent terms (or such terms as the Landlord may reasonably require having regard to the financial standing of the assignee). 9.2 The Landlord may require a replacement deposit of up to 12 months' rent (current at the date of assignment) from any incoming assignee whose audited accounts demonstrate net assets below £2,000,000 or whose Experian / Dun and Bradstreet credit score is below the standard market threshold for a tenant of equivalent size.
9.
SCHEDULE OF CONDITION CROSS-REFERENCE
10.1 The Property as at the date of the Lease is recorded in the Schedule of Condition prepared by Hartwell Property Surveyors Ltd dated 12 April 2026, comprising a Photographic Schedule with 87 numbered photographs together with a narrative report annexed to the Lease as Schedule 2 ("the Schedule of Condition"). 10.2 Dilapidations claims against the Deposit shall have regard to the Schedule of Condition. The Tenant shall not be liable for any disrepair pre-existing as at the date of the Schedule of Condition.
10.
INSOLVENCY CARVE-OUT
11.1 The Deposit is held by the Trustee (or the Landlord) on trust for the Tenant pending application or release in accordance with this Deed. On the Tenant's insolvency (within the meaning of section 247 of the Insolvency Act 1986), the Deposit shall not form part of the Tenant's insolvency estate and shall be applied or released in accordance with this Deed. 11.2 The Landlord retains all rights to lodge a proof of debt or otherwise enforce in the Tenant's insolvency in respect of any shortfall after application of the Deposit, without prejudice to any other remedy.
11.
DILAPIDATIONS APPORTIONMENT METHODOLOGY
12.1 Dilapidations applied against the Deposit shall be calculated in accordance with the following methodology:
Dilapidations shall be quantified by reference to: (a) the section 18(1) Landlord and Tenant Act 1927 cap (the diminution in value of the Landlord's reversion); (b) the supersession principle where the Landlord intends to carry out works that supersede the disrepair (Salisbury (Marquess of) v Gilmore [1942]); (c) the cost of compliance with the repairing covenants (Joyner v Weeks [1891]); whichever is lower. A jointly-instructed independent dilapidations surveyor shall be appointed where the parties cannot agree the methodology.
12.2 The Tenant shall be entitled to inspect any surveyor's report supporting a dilapidations claim against the Deposit within 14 days of demand.
Dilapidations shall be quantified by reference to: (a) the section 18(1) Landlord and Tenant Act 1927 cap (the diminution in value of the Landlord's reversion); (b) the supersession principle where the Landlord intends to carry out works that supersede the disrepair (Salisbury (Marquess of) v Gilmore [1942]); (c) the cost of compliance with the repairing covenants (Joyner v Weeks [1891]); whichever is lower. A jointly-instructed independent dilapidations surveyor shall be appointed where the parties cannot agree the methodology.
12.2 The Tenant shall be entitled to inspect any surveyor's report supporting a dilapidations claim against the Deposit within 14 days of demand.
12.
STATUTORY DEMAND AND CRAR
13.1 Nothing in this Deed shall preclude the Landlord from serving a statutory demand under section 123 of the Insolvency Act 1986 in respect of any debt due under the Lease for which the Deposit is insufficient. 13.2 The Landlord may also exercise its remedy of Commercial Rent Arrears Recovery (CRAR) under the Tribunals, Courts and Enforcement Act 2007 Part 3, without prejudice to its rights under this Deed.
13.
GENERAL PROVISIONS
No provision of this Deed shall create any interest in land within the meaning of the Land Registration Act 2002. This Deed binds the Landlord, the Tenant and their respective successors in title. Any notice required to be given under this Deed shall be given in writing and served at the address of the recipient party stated above. This Deed contains the entire agreement between the parties in respect of the Deposit and supersedes any prior arrangement.
14.
GOVERNING LAW
This Deed is governed by and construed in accordance with the law of England and Wales and the parties submit to the exclusive jurisdiction of its courts in respect of any dispute arising out of or in connection with this Deed.
15.
EXECUTION AS A DEED
This Deed is executed by the parties intending to take effect as a deed in accordance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 (for individuals) and section 44 of the Companies Act 2006 (for companies). IN WITNESS WHEREOF the parties have executed this Deed on the date set out above. Where the Tenant is a UK company, the Tenant acknowledges that the floating charge created by this Deed (if any) must be registered with Companies House within 21 days of creation in accordance with section 859A of the Companies Act 2006.
EXECUTED AS A DEED BY THE LANDLORD
Geoffrey Walter Templeton
Director
Cavendish Place Holdings Ltd
Date: ____________________
EXECUTED AS A DEED BY THE TENANT
Anders Bjorn Petersen
Managing Director
Nordic Heritage Coffee Roasters Ltd
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a UK Commercial Rent Deposit Deed?
A UK Rent Deposit Deed (RDD) is a deed regulating a security deposit posted by a commercial tenant to a landlord in connection with the grant of a business tenancy. The deed sits alongside the underlying lease (typically signed at the same time as the lease itself). It records the amount of the deposit (typically 3, 6 or 12 months' rent depending on the strength of the tenant covenant), how the deposit is held, the events on which the landlord may apply the deposit, the conditions for release of the deposit to the tenant, and the interest treatment. The deed is executed in deed format under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 (individuals) or section 44 of the Companies Act 2006 (companies).
The Rent Deposit Deed is a critical document for British commercial property practice because: (i) the deposit gives the landlord recourse beyond the underlying tenant covenant — including against insolvent tenants; (ii) the deed framework determines whether the deposit is held on trust (and therefore protected against landlord insolvency) or by the landlord directly; (iii) the deed records the permitted deductions methodology, which can be highly contested at lease expiry; and (iv) the deed creates rights and obligations of 12-year duration under section 8 of the Limitation Act 1980 (deeds), beyond the 6-year limit for simple contracts.
Commercial Rent Deposit Deeds in the United Kingdom are NOT subject to the residential Tenancy Deposit Scheme regime under the Housing Act 2004. Residential tenancy deposits must be protected in one of three authorised schemes (TDS, mydeposits, DPS) within 30 days of receipt, with prescribed information served on the tenant; non-compliance generates 1-3× deposit penalties and prevents service of a section 21 notice. Commercial deposits operate under contract / deed only. The template therefore expressly limits scope to commercial tenancies and warns British users against residential use.
What's Covered in This UK Template
Our UK Rent Deposit Deed template produces a deed compliant with LTA 1954 + Companies Act 2006 + LP(MP)A 1989 with optional trust-on-deposit, top-up, assignment, dilapidations and insolvency overlays.
Landlord-Tenant Parties Format
Standard British deed parties layout — landlord + tenant with entity type (Ltd / plc / LLP / partnership / individual), Companies House numbers and execution role.
Property and Lease Cross-Reference
Property address + demise description + underlying lease date + term — anchoring the deed to the specific lease and demise.
Deposit Basis (3 / 6 / 12 Months' Rent)
Pick deposit basis — 3 months' rent (low-risk covenant tenants), 6 months (mid-risk / start-up), 12 months (higher-risk / no covenant), or fixed sum.
Deposit Holding Structure
Three options — held by landlord directly (simplest; tenant takes landlord-insolvency risk), held by landlord's solicitor on trust under the Trustee Act 2000 (recommended), or held by managing agent on trust.
Permitted Deductions Methodology
Standard British framework — rent arrears, service charge, insurance rent, breach remedy costs, dilapidations, legal and surveyor costs, with 28-day landlord-notice obligation on any application.
Interest Treatment
Three positions — landlord retains all interest (standard commercial), tenant entitled to all interest, or tracker-rate interest payable to tenant (e.g. at BoE base rate). Negotiable depending on tenant strength.
Trust Deposit (Trustee Act 2000)
Expert mode unlocks the trust-on-deposit framework — solicitor-on-trust with Trustee Act 2000 duty of care, segregated client account, joint-instruction payout, replacement trustee provisions. Protects against landlord insolvency.
Multi-Tenant Joint and Several
Expert mode adds the multi-tenant joint and several liability framework for shared tenancies — each tenant liable for whole, deposit applied without prejudice to landlord rights against others.
Top-Up and Rent-Increase Top-Up
Expert mode adds the dynamic replenishment obligation — tenant restores deposit after any application within 14 days, plus optional rent-increase top-up maintaining proportional security as rent rises.
Assignment Replacement Deposit
Expert mode adds the assignment provisions — outgoing tenant released on payment by assignee of replacement deposit calibrated to assignee financial standing (audited accounts, credit score).
Schedule of Condition + Dilapidations
Expert mode adds the Schedule of Condition cross-reference (caps dilapidations at term-end disrepair) and the dilapidations apportionment methodology (s.18(1) LTA 1927 cap + Salisbury v Gilmore supersession + Joyner v Weeks cost-of-compliance — whichever is lower).
Insolvency Carve-Out + CRAR
Expert mode adds the insolvency carve-out (deposit not part of tenant insolvency estate per IA 1986 s.247) and the statutory-demand + CRAR interaction (preserves landlord rights under IA 1986 s.123 and TCEA 2007 Pt 3 Commercial Rent Arrears Recovery).
How to Create a UK Rent Deposit Deed
Follow these steps to draft a UK Rent Deposit Deed for a commercial lease.
- 1
Enter Parties + Property + Lease Details
Enter the British landlord and tenant — name, address, entity type (Ltd / plc / LLP / partnership / individual), Companies House numbers if applicable. Enter the property address and demise description (e.g. ground-floor retail + basement storage with floor areas). Enter the underlying lease date and term in months.
- 2
Set the Deposit Amount and Holding Structure
Pick deposit basis — 3 / 6 / 12 months' rent or fixed sum. Enter the deposit amount in GBP and the deed date. Pick the holding structure — held by landlord direct (simplest but takes landlord-insolvency risk), held by landlord's solicitor on trust (recommended — Trustee Act 2000 protections), or held by managing agent on trust.
- 3
Configure Release Conditions + Interest Treatment
Pick the primary release event — lease expiry with no subsisting breach (most common), assignment with landlord consent + replacement deposit, or other termination mechanism. Set the release period in days (28 is conventional). Add any additional permitted deductions. Pick interest treatment — landlord retains (standard) / tenant entitled to all interest / tracker rate. Enter signatories.
- 4
Unlock Expert: Trust + Top-Up + Assignment + Schedule of Condition
In Expert mode, tick "Hold on trust" for solicitor-on-trust framework under Trustee Act 2000 — protects against landlord insolvency. Add multi-tenant joint and several if applicable. Add top-up obligation (14-day replenishment) + optional rent-increase top-up. Add assignment replacement-deposit calibrated to assignee financial standing. Add Schedule of Condition cross-reference.
- 5
Add Insolvency + Dilapidations + CRAR and Execute
In Expert mode, add the insolvency carve-out clause (IA 1986 s.247) — deposit not part of tenant insolvency estate. Add the dilapidations apportionment methodology — s.18(1) LTA 1927 cap, Salisbury v Gilmore supersession principle, Joyner v Weeks cost-of-compliance. Add the statutory-demand + CRAR interaction clause. Download as PDF and execute as a deed under section 1 LP(MP)A 1989 (individuals) or section 44 Companies Act 2006 (companies). If tenant is a UK company creating a charge, register with Companies House within 21 days.
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Legal Considerations
A commercial Rent Deposit Deed is a 12-year deed with significant rights and obligations. Get the trust-deposit structure right.
This template is for informational purposes only and does not constitute legal advice. Significant commercial deposits (over £100,000), complex tenant structures (group guarantees, parent-company support), or contested dilapidations methodologies should be reviewed by a UK commercial property solicitor.
Reviewed for England commercial property practice (June 2026)
Commercial vs Residential — Critical Distinction
Commercial Rent Deposit Deeds operate under contract / deed only. The British residential Tenancy Deposit Scheme regime under the Housing Act 2004 — which requires deposit protection in TDS / mydeposits / DPS within 30 days of receipt, prescribed information service, and 1-3× deposit penalties for non-compliance — applies only to residential assured shorthold tenancies. Commercial deposits are out of scope. This template is for COMMERCIAL ONLY — using it for a residential tenancy will leave the landlord unable to serve a section 21 notice and exposed to 1-3× deposit penalty under section 214 Housing Act 2004. The distinction is fundamental.
Trust-on-Deposit Protection Against Landlord Insolvency
A British commercial deposit held directly by the landlord becomes part of the landlord's general assets. On landlord insolvency, the deposit is at risk — the tenant ranks as an unsecured creditor and may recover little or nothing. A deposit held by the landlord's solicitor on trust (or by the managing agent on trust) under the Trustee Act 2000 is segregated from the landlord's estate and protected against landlord insolvency. This is now the recommended commercial practice in the UK and the template defaults to the trust framework. Where the deposit is held by a UK solicitor, the SRA Accounts Rules apply alongside the Trustee Act 2000.
Dilapidations Apportionment — Methodology Matters
Dilapidations claims against the deposit at lease expiry are highly contested in British commercial property practice. Section 18(1) of the Landlord and Tenant Act 1927 caps damages at the diminution in value of the landlord's reversion. The supersession principle (Salisbury (Marquess of) v Gilmore [1942]) reduces damages where the landlord intends to carry out works that supersede the disrepair (e.g. demolition or major refurbishment). The cost-of-compliance methodology (Joyner v Weeks [1891]) caps damages at the cost of remedying the breach. The template specifies "whichever is lower" — the most tenant-favourable position. Surveyor cost is typically jointly instructed where the parties cannot agree the methodology. The Pre-Action Protocol for Claims for Damages in Relation to the Physical State of Commercial Property at Termination of a Tenancy (Dilapidations Protocol) governs the British pre-action process.
Companies House Charge Registration (21 days)
Where the tenant is a UK company and the Rent Deposit Deed creates a floating charge (or other registrable security) over the deposit money, section 859A of the Companies Act 2006 requires registration with Companies House within 21 days of creation. Failure to register renders the charge void against a liquidator, administrator and creditor of the tenant — the deposit reverts to the tenant's general assets in insolvency. The template includes the standard execution clause requiring Companies House registration. For LLPs registered under the Limited Liability Partnerships Act 2000, equivalent charge-registration obligations apply.
Frequently Asked Questions
Draft Your UK Commercial Rent Deposit Deed Now
Use our free LTA 1954 + Companies Act 2006 template to draft a UK commercial Rent Deposit Deed. Expert mode unlocks the Trustee Act 2000 trust-on-deposit framework, top-up obligation, assignment replacement-deposit, Schedule of Condition cross-reference, IA 1986 s.247 insolvency carve-out, dilapidations apportionment methodology (s.18(1) LTA 1927 + Salisbury v Gilmore + Joyner v Weeks) and statutory-demand + CRAR interaction. NOT for residential — residential tenancies require TDS / mydeposits / DPS protection.
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