What is the difference between a holding deposit and a security deposit?
A holding deposit is used to hold the premises for the prospective tenant until a lease agreement is signed. Should the lease not proceed the Lessor may use the funds to cover costs incurred eg: legal fees. Once the lease agreement has been signed the holding deposit is allocated towards rent.
A security deposit is money paid by the Lessee to the Lessor and usually held in a trust account. It can be allocated towards rent arrears or damage to the premises if the lessee fails to honour their obligations under the lease. A security deposit is generally a cash payment but can also be in the form of a bank guarantee supplied by the lessees bank.