Sections 2 and 19 discuss the creation of, and the parties’ rights in, the secur

Question

Sections 2 and 19 discuss the creation of, and the parties’ rights in, the security deposit. Do these rights favor the landlord or the tenant?

Section 2.

Rent Tenant shall pay to Landlord during the Initial Term rent of _________________ Dollars ($) per year, payable in installments of _______________ Dollars ($) per month. Each installment payment shall be due in advance on the first day of each calendar month during the lease term to Landlord at the following address: The rental payment amount for any partial calendar months included in the lease term shall be prorated on a daily basis. Tenant shall also pay to Landlord a Security Deposit in the amount of __________________ Dollars ($). The rental for any renewal lease term, if created as permitted under this Lease, shall be ___________ Dollars ($) per year payable in installments of _______ Dollars ($) per month.

Section 19.

Security Deposit Landlord shall hold the Security Deposit without liability for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that Tenant shall not consider the Security Deposit an advance payment of rent or a measure of Landlord's damages in case of default. Unless otherwise provided by law or regulation, Landlord may commingle the Security Deposit with Landlord's other funds. Landlord may, from time to time, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages of rent or to satisfy any other covenant or obligation of Tenant hereunder. Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. If Tenant is not in default at the termination of this Lease, Landlord shall return the balance of the Security Deposit remaining after any such application to Tenant.

Explanation / Answer

Section 2 and section 19 rights favour the land lord as the tenant not only pays the rent to the landlord but also should also pay a security deposit to the landlord. The landlord can use the security deposit until his wish but the tenant cannot ask for that deposit until the lease agreement is completed. The tenant even cannot consider this security deposit as an advance to land lord unless it is provided by law or regulation which states that landlord can use the money without paying interest.

So it clearly shows that both the section 2 and 19 favour the landlord.

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