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      3. Retail leasing

      Retail leasing FAQ16: What’s the difference between the Security Deposit and the Bank Guarantee?

      What’s the difference between the Security Deposit and the Bank Guarantee?

      • Security deposit is a cash bond that can be used in the case the tenant breaches
      • Bank Guarantee is the understatement by the bank in favour of the landlord that the bank will owe the BG amount in the case that the tenant defaults or breaches their lease
      • In retail leasing, the term security deposit more often refers to an amount equal to 1 month’s gross rent which is paid as a holding deposit when the heads of agreement is signed and is later used by the landlord as the first month’s rent once the lease commences.