Do you charge a deposit when signing a lease?

Question

First tenant turnover I am having at a property where I secured the tenant this far in advance. I feel like I should get some kind of deposit at the signing of the lease but understand I should not accept the First Last & Security yet. Do people typically ask for the 1st month (or security deposit, call it what you will) at lease signing? Rent is $2500 a month and starts 9/1. Lease signing will take place 7/8.... Or is a smaller amount exptected? I want to make sure I have something as a non-refundable deposit that will go towards the rent and want to write it in the lease. Curious what other experiences are right now.

Thanks in advance!

Nathan Strahan · Answer

When it comes to securing a tenant far in advance, it's not uncommon for landlords to request a deposit at the signing of the lease to solidify the tenant's commitment.

As for the amount, it varies depending on local rental market practices and individual landlord preferences. Some landlords may ask for a full month's rent as a deposit, while others may ask for a smaller amount. Generally, asking for one month's rent as a deposit is a reasonable practice.

To ensure clarity and avoid any misunderstandings, it's essential to clearly outline the terms of the deposit in the lease agreement. Specify that the deposit is non-refundable, will be applied towards the first month's rent, and include any conditions or circumstances under which the deposit may be forfeited.

Remember to familiarize yourself with the specific laws and regulations regarding rental deposits in your jurisdiction, as they can vary. It's always a good idea to consult with a local attorney or a real estate professional to ensure you're complying with the relevant laws and regulations.

Nathan Gesner · Answer

Question: why doesn't the lease start until 9/1? Is that when the rental is available? Or are you holding the property vacant until the Tenant is ready to move in?

When I notify a Tenant that their application is approved, I give them 24 hours to pay the deposit. If they don't, I offer it to the next approved applicant. I don't hold a property without money in hand, period.

Once I have money, my policy states I will hold the property vacant for one week. After that, the Tenant is required to start paying rent, utilities, etc. I may adjust this to two weeks for a really, really good tenant or if the rental market is slow, but I will never voluntarily hold a property vacant without rent for longer than two weeks.

Richard F. · Answer

Aloha,

What does local LL/Tenant law allow you to collect prior to move in? Here we are not able to collect more than one month rent as a deposit, and only up to one full month of initial rent. You don't state just how far in advance you are dealing with here, but on rare occasion we have accepted the full deposit as a "hold" deposit, which will convert to the Security Deposit once keys are handed over, based on a one page agreement stating all of the pertinent facts.

Typically however, we require the SD in full within 2 business days of the application approval, with first month full or pro-rated amount prior to handing over keys, and within 15 days. The actual signing of the Rental Agreement can happen at any point prior to getting the keys.

Do you charge a deposit when signing a lease?

Do you charge a deposit when signing a lease?

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