Security Deposit Payment : ezLandlordForms

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Antoinettye C

started a topic almost 12 years ago

I recently approved an application from a potential tenant. After conveying my decision, I asked the applicant to submit the security deposit (one month's rent), so that I could instruct my broker to remove the listing and allow me to prepare the lease agreement which would be sent for their review prior to signing (about one week later). Applicant indicated 'discomfort' with my request, stating preference to pay security deposit upon signing lease. In same breath I stated that under that condition, I will continue to have broker show listing - applicant has a problem with this part being they cannot understand reason for continued viewing (duh?). My response - you have given me nothing tangible and should you decide to abandon this application, it would be a set back for me (not to mention running the risk of upsetting the broker).

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Dawn A

said almost 12 years ago

If they don't want to put down money to hold the place and go to the security deposit, that might mean that they won't pay in the future. Or they don't trust you. Whatever -- let them know that if they don't want to adhere to your security deposit policy, this probably isn't the rental for them. Then move on.

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Bob R

said almost 12 years ago

I agree with Dawn’s comment. However, I would not call it a Sec.Dpst. Call it a Deposit to hold the rental for them and to remove it from the market. Also, state that the deposit is non-refundable should they change their mind about renting from you. And, that the deposit will be converted to a Sec.Dpst when they sign the contract and move –in. In some States if you call it a Sec.Dpst all monies MUST be returned if potential tenants change their mind due to the fact that Sec.Dpst can only be used for damages. -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance. BTW...check out the Rental Property Organizer at Simp-List.com. Free Trial Download with data. Special Discount ‘til midnight tonight.

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Antoinettye C

said almost 12 years ago

Thanks for your response - I share the same view as expressed by Dawn - from my perspective, a Landlord assumes far more risk by handing over keys to a complete stranger, as opposed to a would be tenant handing over security deposit (or hold deposit), so much for the trust!

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Bob R

said almost 12 years ago

NY Law states “A landlord may use the security deposit as a reimbursement for the rea¬sonable cost of repairs beyond normal wear and tear, if the tenant damages the apartment, or a reimbursement for any unpaid rent.” The catch word here is “Unpaid Rent.” Since the applicant is a “potential tenant”. If they took you to court, I believe you would lose based on past cases. Risk is not the issue here -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance. BTW...check out the Rental Property Organizer at Simp-List.com. Free Trial Download with data.

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Antoinettye C

said almost 12 years ago

Rob, you missed the point - if the prospective's tenant's concern is the risk of losing money before signing ( I asked for a check (not even certifed), she knows where to find me, and she could have asked for a copy of drivers license, etc., my point being there are several ways for one to protect oneself in these situations). My statement about risk still stands - a tenant who pays a SD and first months rent is risking *far less* than the landlord once the keys have been handed over - my house costs far more than tenant's investment (two months rent). As for damage settlement let's be honest here - the costs are usally not covered by SD should the tenant do serious physical damage or chooses the eviciton route. I was more annoyed this person expected me to pull the listing without making any sort of financial commtiment - an application is worthless, we will agree on this point (it does *not* demonstrate intent to sign a lease, merely expression of interest in renting the place). Without making a financial commitment, there is no motivation on my end to spend the money to pay for a lease agreement and spending time to customize it - what if this person is a *no show* on the date set for lease signing?

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Bob R

said almost 12 years ago

No, you’re missing the Point. The discussion is about a deposit to hold a unit before signing an agreement. A SD should NOT be given until the Contract has been signed. I reiterate - “A landlord may use the security deposit as a reimbursement for the reasonable cost of repairs beyond normal wear and tear, if the tenant damages the apartment, or a reimbursement for any unpaid rent.” ……… Until they sign, you are without contract and no rent is due……. I side with the prospective tenants. If I was in their shoes, I would want to do an inspection and only than would I sign the agreement and receive the keys….. My suggestion was to call it a Non-Refundable Holding Deposit. I’m not clear on how you think that you would lose out by calling it a Holding Deposit. However, if you call it a SD and should the matter go to court, you probably would lose your case. Not sure why you’re so hung up on calling it a SD. ----- Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance. BTW...check out the Rental Property Organizer at Simp-List.com. Free Trial Download with data

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Sheila B

said about 11 years ago

A whole week between acceptance and signing the lease would seem like forever if I were wanting to rent a place. It seems like that is where the process needs to be streamlined. Why does it take a whole week to "prepare a lease"?