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Drafting a rental agreement security deposit

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Mr. Jaime Boogaers
Mr. Jaime Boogaers
Corporate Law
Attorney, 16 years of experience

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About us

Our expertise

Our lawyers and in-house counsel specialize in drafting, reviewing, and amending legal documents and contracts. We look not only at the legal text but also at how you use the document in practice.

Custom solutions for your industry

Every business operates differently. That is why we take your industry, customers, working methods, and specific risks into account.

Our facts

  • Active since 2001
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  • Fixed rates in advance
  • Tailored legal solutions for entrepreneurs
  • Thousands of agreements per year

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Meet our office

Our ContractCheck, simply explained what can all go wrong.

Why MKB Juristen?

Since 2001, we have been active as a no-nonsense legal firm for entrepreneurs. We quickly get to the heart of the matter: with a thorough assessment, clear answers, and a document that works practically.

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We translate your situation into a legal document that you can actually use. You won't receive a loose template, but a document tailored to your business, agreements, and risks.

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Are you unsure whether you should have the document drafted, checked, or amended?
During the initial consultation, we will determine the sensible course of action together. Afterward, you will know exactly where you stand.

Why customization?

A legal document only works well if it aligns with your business, agreements, risks, and industry. That is why we do not work with a standard generator, but with legal experts who assess your situation.

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You will receive a legal document that is practical and aligns with the agreements you wish to make.

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The founders of MKB Juristen

Our organization consists of several small teams working within various legal fields. Each legal field has its own senior in-house counsel and/or lawyers.

Denian Wielhouwer

Corporate lawyer in corporate law & business expert

Denian Wielhouwer

Annelore Hendriks

Corporate lawyer, corporate law, administrative law

Annelore Hendriks

Ilja van Driel

Corporate law attorney, employment law

Ilja van Driel

Jaime Boogaers

Corporate law, ICT & privacy law, energy law attorney

Jaime Boogaers
Custom choices

Which choices determine the content?

A few fundamental choices determine the strength and extent of your guarantee. Make these choices consciously before the document is drafted.

Choice or question Why this matters legally
Is the guarantor a private individual or a business party? For a private (non-business) surety, additional protection rules apply, such as the requirement of a maximum amount and the consent of any spouse.
Will it be a standard suretyship or joint and several liability? With a standard deposit, you can only claim against the guarantor after default by the tenant; with joint and several liability, you can claim against the guarantor directly and independently.
For what amount is the deposit guaranteed? Choose between a fixed maximum amount or a defined category of obligations; a ceiling provides clarity for the deposit and is required for a private individual.
Does the deposit continue upon renewal or modification of the lease? Explicitly stipulate whether the guarantee also applies after tacit renewal or contract amendments; otherwise, the guarantor may rely on this.
Does the suretyship apply in addition to or instead of a security deposit or bank guarantee? Determine the ratio to other collateral so that you are not double covered or, conversely, insufficiently covered.
Clauses and provisions

What components belong in a rental security deposit agreement?

A guarantee under a lease agreement is only valuable if all core components are clearly and fully documented. The components below together constitute a watertight guarantee that is enforceable in practice.

Provision Relevant to Legal point of attention
Parties and capacity Always Name the landlord, tenant, and guarantor with full details and (for legal entities) the Chamber of Commerce number and representative.
Description of principal obligation Always Refer to the specific rental agreement (date, property, address) to which the deposit applies.
Scope of the guarantee Always Specify which obligations are assumed: rent, service charges, damage, fines, and delivery costs.
Maximum amount Recommended A fixed ceiling is mandatory for a private surety and prevents unlimited liability.
Duration and termination Always Determine whether the deposit runs with the rent, including upon renewal, and how and when it ends.
Terms of contact Always Rule on whether the landlord can be held liable directly or only after default and a formal notice from the tenant.
Joint and several liability or subsidiarity Recommended Specify whether the deposit only needs to be paid after the tenant (classic deposit) or immediately (joint and several).
Applicable law and disputes Recommended Determine that Dutch law applies and which court has jurisdiction in the event of a dispute.
Use in practice

How do you use this document correctly?

A suretyship is only effective if it is properly established, carefully safeguarded, and invoked. Follow the steps below.

Situation What should you do? Point of attention
Upon termination of the lease Have the guarantor sign the document before or simultaneously with the rental agreement. This way, security is covered from the first day of the rental.
With a private guarantor Obtain written consent from any spouse or registered partner. Without that consent, the guarantee can be annulled.
During the term Keep the signed original together with the rental agreement. In the event of a dispute, you must be able to prove the guarantee and the principal obligation.
In case of non-payment First put the tenant in default and then claim the deposit in writing. The correct order prevents the guarantor from successfully contesting the claim.
Common mistakes

Common mistakes

In practice, things often go wrong with guarantees on a number of recurring points. Avoid these mistakes to prevent the loss of your security.

Wrong Consequence Better approach
No maximum amount for a private deposit The guarantee may be voidable on this point. Always include a specific ceiling amount for a non-business guarantee.
No permission from the guarantor's spouse The spouse can annul the suretyship. Have the partner co-sign or agree in writing.
Vague description of the covered obligations Discussion about what is and is not covered by the deposit. Describe accurately: rent, service charges, damage, and delivery costs.
No arrangement for extension of the lease The deposit may become void upon tacit renewal. Explicitly stipulate that the deposit continues even after extension.
Calling upon the guarantor too early or without notice of default The claim against the guarantor may be dismissed. First put the tenant in default and follow the correct sequence.
Risk profile

What is your situation and what do you pay attention to?

The correct structuring of the guarantee depends on your specific situation. If you recognize your situation below, please pay attention to the point mentioned.

Risk profile Example Focus in the document
Director acts as guarantor for his private limited company The director-major shareholder acts as guarantor for the rent of his company. Assess whether this is a private guarantee and whether a maximum amount and partner consent are required.
Parent company acts as guarantor for subsidiary A group company guarantees the rental obligations of a group company. This is typically a corporate guarantee; note the authority of the signing director.
Collateral in addition to existing bank guarantee There is already a bank guarantee or deposit, and you want additional security. Align the suretyship with the other securities to prevent overlap or underfunding.
Subletting or substitution The tenant changes or a subtenant moves in. Determine whether the deposit also remains valid for the new tenant or subtenant.
Additional documents

When is this document not enough?

A suretyship provides security for the rent but does not cover all situations regarding collaboration, liability, or collection. You will need additional documents or assistance in the following cases.

Situation Supplementary document Why
Situation Related document Explanation
You wish to record agreements between shareholders who also provide personal guarantees Shareholders' Agreement Regulates mutual relationships and securities within the company.
You work together on a structural basis with the other party Cooperation Agreement Establishes rights, obligations, and liability in the collaboration.
The tenant does not pay despite the deposit Debt collection We are claiming the outstanding amounts from the tenant and guarantor.
Explanation of this document

Drafting a security deposit for a rental agreement, why?

Not every entrepreneur knows exactly what a rental agreement guarantee is, when you need it, and which risks it must cover. That is why we explain below what this document entails, what you should look out for, and why customized legal solutions are important.

What is a security deposit in a rental agreement?
A suretyship in a tenancy agreement is the agreement whereby a third party—the surety—commits to the landlord to pay the rent and fulfill the other obligations arising from the tenancy agreement, in the event that the tenant fails to meet their obligations. Tenancy sureties are most commonly used in three situations: when renting to start-up entrepreneurs or companies without a track record, where the landlord requires the director-major shareholder or shareholder to act as guarantor in their private capacity; when renting to international tenants without Dutch recourse options; and when renting residential properties where parents act as guarantors for their child as tenants. The suretyship is a form of personal security provided alongside or in place of a security deposit. Our lawyers draft legally watertight sureties for landlords that maximize recourse options, and assess the extent and risks of the liability guarantors assume.
What is the difference between a suretyship and a security deposit in a rental agreement?
These are two different security instruments, each with its own advantages and disadvantages. A security deposit is an amount that the tenant pays to the landlord at the beginning of the lease agreement as security for performance. At the end of the lease, the landlord returns the security deposit, less any outstanding rent and damages. The security deposit is a business security: recovery is immediately possible on the deposited amount. A suretyship is a personal security: the landlord can hold the surety liable for all outstanding obligations of the tenant up to the maximum amount of the suretyship. A suretyship generally offers landlords more security than a security deposit because the amount is not limited to the security deposit, but the possibilities for recovery depend on the financial position of the surety. Our lawyers advise landlords on the most effective combination of securities for their specific tenant profile.
How do you formulate a guarantee when renting to a BV?
When leasing commercial premises to a BV, landlords almost always require the director-major shareholder (DGA) or shareholder to provide a personal guarantee. The guarantee when leasing to a BV involves a number of specific points of attention. First, the extent of liability: the guarantee must specify the maximum amount for which the guarantor is liable — usually a multiple of the monthly rent, sometimes unlimited. Second, ongoing liability: in the case of a long-term lease agreement with indexation, the rent may increase over the years; the guarantee must determine whether that increase is for the guarantor's account. Third, the consent requirement pursuant to Article 1:88 of the Dutch Civil Code: if the DGA is married and the guarantee does not fit within the normal course of business, the partner's consent is required. Fourth, the duration of the guarantee: does the guarantee end if the tenant has met all their obligations for a certain period? Our lawyers draft a guarantee for landlords that maximizes recovery options.
What defenses can a guarantor invoke in a rental agreement?
The guarantor in a tenancy agreement has a number of statutory defenses he can invoke if he is sued. The most relevant defense is the privilege of foreclosure pursuant to Article 7:855 of the Dutch Civil Code: the guarantor can demand that the landlord first sue the tenant and foreclose on the latter's assets before he can sue the guarantor. This defense lapses if it is expressly excluded in the guarantee agreement — banks and professional landlords usually stipulate this. The guarantor can also invoke defenses held by the tenant himself: if the tenancy agreement has been terminated or the tenant has a set-offable counterclaim, the guarantor can invoke this. The guarantor who pays the rent arrears succeeds to the rights of the landlord vis-à-vis the tenant by means of subrogation and can recover the amount paid from the tenant. Our lawyers advise guarantors on the defenses available to them and the likelihood of success when defending against a claim by the landlord.
How do you terminate a suretyship under a rental agreement?
In principle, a suretyship ends when the lease agreement ends. However, in the case of a continuous lease agreement, the suretyship can be difficult to terminate if the landlord has not granted a separate right of termination for this purpose. Particular complications arise in the following situations. The guarantor dies: his heirs assume his guarantee obligations. The lease agreement is extended beyond the agreed period: does the suretyship also apply to the extended period? The tenant is replaced by another tenant through substitution: does the suretyship also apply to the new tenant? Your suretyship agreement must explicitly regulate these situations: does the suretyship automatically terminate upon contract extensions beyond the initial term, and is the suretyship tied to the original tenant? Our lawyers draft a suretyship agreement that clearly regulates when the suretyship ends and the guarantor is released from liability.
How does it work at MKBjuristen?
Our lawyers draft a suretyship for landlords accompanying a lease agreement that maximizes recourse options, clearly defines the extent of liability, and correctly handles the spouse's consent requirement. For sureties, we assess the suretyship offered to you, advise you on the extent of your liability and the defenses you can invoke, and negotiate limitations of your liability on your behalf.
Are you unsure whether your document is legally correct? We would be happy to assess the sensible course of action: drafting, reviewing, or amending.
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Why not use a standard document?

A standard document often seems like a quick solution, but usually does not fully align with your company, agreements, risks, and way of working. Our legal experts draft documents that fit your situation.

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Explanation regarding the use of the document

A standard document seems cheap, until it doesn't fit your situation properly. That is why we provide custom legal solutions tailored to your business.

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Every business operates differently and faces different legal risks. Therefore, we tailor the document to your industry, customers, agreements, and way of working.

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A legal document only has value if it suits your practice. That is why we look not only at the text, but also at how you use the document in your business.

Common mistakes with legal documents

A legal document often seems simple, but small errors can have major consequences later on. In practice, we see that entrepreneurs run the greatest risk when a document does not align well with their business, agreements, or way of working.

  • Using a standard document that does not suit the company
  • Forgot important agreements regarding payment, delivery, liability, or termination
  • Have a document generated without legal review
  • Continuing to use old documents while the company has changed
  • Not knowing how the document should be used correctly in practice

A legal document only prevents problems if it suits your situation. That is why we look not only at the text, but also at your company, agreements, and risks.

Why is a standard document often not enough?

Because a standard document does not take into account your industry, customers, risks, and specific agreements, important provisions may be missing or not align well with your practice.

Can I create a legal document myself using AI?

AI can assist in creating text, but does not independently assess whether the document is legally appropriate, complete, and usable for your business. Legal review therefore remains important.

When do I need to have my document checked?

Have your document checked if your business has changed, you have new customers or services, you have doubts about existing agreements, or the document has not been updated for a long time.

Will I also receive an explanation about the use of the document?

Yes. We explain how to use the document in practice, what to look out for, and which steps are important to prevent disputes afterwards.

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Annelore Hendriks

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SME Lawyers at the Chamber of Commerce Source: Chamber of Commerce 2019
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