Tenant wants to delay paying security deposit for medium term rental

Member since 2021 · 1 post · 0 votes

I am currently in the process of renting my fully furnished townhome for a 6 month term to a family of four. Tenant wants to take possession 4/1 and has asked to pay the security deposit of $3,000 closer to the move in date along with first month rent. I asked for it at lease signing. I know it’s common to get the full security deposit at lease signing, but wondering what people’s thoughts are on offering them to pay half at lease signing and the rest before move in since we are two months out before move in. Don’t want to be unreasonable demanding 3k two months ahead of time but also want money up front to take the property off the market. I have had a hard time finding a good tenant as I can only rent the unit until the end of September. Unit is in Florida

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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

Never hold a house that has no payment attached to it. I promise you this good family of four will spend the next 2 months looking for something cheaper while you are left holding the bag on a worthless lease. If you are going to only take partial payment - which I would advise against 100% - then you take payment of first months rent, not deposit, so that you have something you can keep while you are trying to re-let the property after they bail when they find something better/cheaper.

They are trying to hold your property in their back pocket as a fallback, or they are broke as hell. Either way is not good for your business.

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Glen Wiley
Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes
2y
I don't mind letting them wait until closer to move in. Make sure the lease clearly stipulates the security deposit and do not acknowledge receipt of the SD until you actually have it. Do not give them keys/access until you have the SD.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Until they pay, the house remains open to anyone who wants to rent it.

Once you pay, the house goes off the market.
Simple rules.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
2y
Never hold a house that has no payment attached to it. I promise you this good family of four will spend the next 2 months looking for something cheaper while you are left holding the bag on a worthless lease. If you are going to only take partial payment - which I would advise against 100% - then you take payment of first months rent, not deposit, so that you have something you can keep while you are trying to re-let the property after they bail when they find something better/cheaper.
They are trying to hold your property in their back pocket as a fallback, or they are broke as hell. Either way is not good for your business.
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Skyline Properties
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James CarlsonPro Member
Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
2y
@Justin Macaskill
Yeah, I hate to be another miser here, but I wouldn't do it.
We own medium-term rentals in Denver and Colorado Springs, and the only time we've had a problem was when we went against our agreed-upon parameters and let someone in with really bad credit but with an up-front payment.
It's not the same situation as yours, but I think you stick to what you ask for. If they can't do it, then that's an indication they might have trouble paying in the future as well. And, as you and others have said, you're now at big risk of holding open a place with no leverage whatsoever and if they pull out, you have no practical recourse and are likely out a month or more of that $3,000 monthly rent while you try to get someone else in.
[email protected]720-460-1770
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Nadia DaggettBusiness Member
Real Estate Broker · Tampa, FL · Member since 2019 · 92 posts · 60 votes
2y
Have you tried Obligio? They offer a program that enables tenants to pay their security deposit through a low monthly payment. I appreciate this program because it pay quickly with any damages to the property issues after the tenant departs. It works well for my corporate rentals. I believe it is applicable for stays of three months or more, however.
[email protected]813-527-1030
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Joey BanasihanPro Member
Investor · Boise, ID · Member since 2019 · 233 posts · 188 votes
2y
Hey @Justin Macaskill, I am currently in a similar timeline situation. I would bolster your lease agreement around secuirty deposits. I would consider a two part payment for the deposit, 1/2 now and 1/2 a month later. Have something that states the security deposit is not be refundable 14 days or less before move-in date if tenants decided to break their lease. Also maybe have something in writing that the first month rent is also due 14 days before move-in, if not lease will be terminated and deposit not refunded (have a lawyer look over that stuff.
The reality is that some families are strapped for cash, and anything close to $6000 is not an easy feat for most folks. Just be sure to have language that protects you but also making it clear of the expectations and consequences if timelines are not abided to.
Just my thoughts, but everyone has their own threshold of risk, and always make sure legal stuff is run by lawyers and aligns with county/state guidelines.

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
2y
@Justin Macaskill make sure your lease says not valid until all moneys are paid in full. What is closer is that in two week or 5? Is 3000 one months rent? I would collect a month now for commitment and let them pay the rest closer to the date. There is no lease signing without a deposit. What is the reason for the short term need? Is this an insurance or construction issue? Could be contributing to the request. Tell him until you get a deposit you keep marketing.
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Jamie Banks
Real Estate Consultant · Reston, VA · Member since 2022 · 513 posts · 521 votes
2y
I would require the full security deposit to rent the unit. Between now and 4/1 there may be a chance to increase your price if this booking doesn’t pan out. I find that when I deviate from my rental policies I end up with bad guest so I always advice to stick with your regular security deposit procedure!
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