Start your membership account today...  Access to credit reports, 100's of rental specific forms, agreements, letters, checklists, how-to articles, guides, expert advice and much more!  Even a FREE, 3-day trial!

Not a Member?
Get a Free Trial Membership

  Get FREE Stuff! Run Credit Report Rental Forms  Shop & Buy Forms!  Advertise Your Rental Customer Care

Welcome to Landlord.com's Discussion Forum
Sign up Latest Topics
 
 
 


Reply
  Author   Comment  
rkenned1

Registered:
Posts: 1
Reply with quote  #1 

I am going to rent out my  house and wanted to know what do you reccommend for a deposit from the tenant? Should it be equivalent to one months rent?

OHlandlord

Registered:
Posts: 3,814
Reply with quote  #2 

Most LLs collect a deposit equal to one month's rent.  Some states have laws on how much deposit you can collect, where you must put the deposit, if you must pay the tenant interest on their deposit, and even how long you can hold some portions of the deposit.  Some even have laws on whether pet fees are deposits.  Please post your state to get more information specific to your state laws.  Always get the initial funds (move-in money), that is the first month's rent and deposit, either in cash, certified bank check, or money order.  NEVER, NEVER accept a personal check for these amounts unless you hold the keys until you take the check to THEIR bank, verify the funds, and cash the check there.  If you give the keys before this, you give them possession and end up with a bad check and no money.  It will be expensive to evict them out of the unit and take several months to do it.

MrFurrly

Registered:
Posts: 16
Reply with quote  #3 

Depending on the demand for the unit I would try to get first months, last months and security deposit. I don't think the law regulates how much rent you can collect in advance. Usually just re-painting it will be more than one months rent.

OHlandlord

Registered:
Posts: 3,814
Reply with quote  #4 

Some states DO regulate how much rent you can collect in advance.  In some states, any advance rent is considered as a deposit, as are pet deposits.  Some states do have limits on how much deposit you are allowed to collect, if you need to pay interest on this money, and when you need to return it (for instance:  in some states you must return all money over one month's rent after they stay in the unit for one year).  Please check with your state laws before accepting advance rent or any deposit in excess of one month's rent.  Also, keep in mind that if you have already accepted advance rent, it makes it hard to evict.  Many judges don't like to allow an eviction if you've already accepted the rent.

MrFurrly

Registered:
Posts: 16
Reply with quote  #5 
Thanks for clearing that up OH. Definitely need to find the state of perfect balance when it comes to deposits. Nevada gives you a total of 3 x the monthly rent allowed to collect. OH, have you ever had to evict someone who has paid rent in advance? Would be an interesting story.
OHlandlord

Registered:
Posts: 3,814
Reply with quote  #6 
I don't accept advance rent for just that reason.  My state would not allow you to evict if you have accepted rent for that period (even partial payments of rent) unless you evict for lease violations.  Eviction for lease violations is much more problematic than evicting for non-payment, and requires much more documentation & evidence.  In my state, if I take any deposit over one month's rent, I must pay interest at a rate of 5% a year to the tenant.  This is the highest required interest to tenants in the nation.  The law was written many years ago and needs to be revised.  (I don't even get that much from my bank!  So I'd be losing money each year.)  So I don't take pet deposits, I accept only non-refundable pet fees and monthly pet rent.  I don't take advance payments of rent (like last month's rent).  I don't take deposits greater than one month's rent.  Etc.  Strange to have such huge restriction on deposits when we have the highest foreclosure rate in the nation.

What I have found is that some states consider pet deposits, advance rent, and other types of these monies equal to security deposits and consider it all one lump sum.  So a month's security deposit, a month's advance rent, and a pet deposit would put you over the legal limit if you can only collect one or two month's of deposit.

Other restrictions on deposit vary by state, and some are very specific.  PA requires you to return anything over one month's worth after the tenant stays one year.  CA allows you to collect an extra 1/2 month's worth if they have a waterbed.  Connecticut restricts the deposit according to the age of the tenant.  KS allows an extra 1/2 month for a pet.  Several states restrict it based on the type of agreement, the length of it, or if the unit is furnished or not.  There are also rules on who must pay interest to tenants on their deposit, whether the deposit must be placed in a special account, etc.  The rules for deposits are quite specific in some states.  I urge the OP to read his/her state law on this.  OP, if you need to know where to find this, please post your state and I'll give you the statute # to read.
Previous Topic | Next Topic
Print
Reply

Quick Navigation:

Easily create a Forum Website with Website Toolbox.

Apartment Finders > > Member Log-in > Free Trial Offer > Free E-newsletter > Customer Service > Get Free Stuff! > Run Credit Report > Rental Forms > Vacancy Center > Do-it-yourself > Evicting Your Tenant > Foreclosure Resources > Landlord Discussion Board > Income Tax Resources > Information Center > Join Landlord.com > Landlord Law > Library > Multi-family > Professional Advice > Rental & Property Mgmt > Rent Collection > Repair & Maintenance > Security Deposit > Software Center > Tenant Screening > Vacation Homes > What's New > Rental Agreements > Free Leases > Inside Our E-store > > Security Deposits > > Landlord Daily News > Rental Agreements >
LandscapingSanJose.net Resources: Cleaner Sunshine coast