Max Deposit (by Hoosier [IN]) Jun 23, 2018 6:18 AM
Max Deposit (by WMH [NC]) Jun 23, 2018 6:26 AM
Max Deposit (by S i d [MO]) Jun 23, 2018 7:59 AM
Max Deposit (by Still Learning [NH]) Jun 23, 2018 8:04 AM
Max Deposit (by Hoosier [IN]) Jun 23, 2018 8:12 AM
Max Deposit (by Hoosier [IN]) Jun 23, 2018 8:16 AM
Max Deposit (by JB [OR]) Jun 23, 2018 9:24 AM
Max Deposit (by Hoosier [IN]) Jun 23, 2018 10:08 AM
Max Deposit (by JB [OR]) Jun 23, 2018 10:18 AM
Max Deposit (by WMH [NC]) Jun 23, 2018 10:40 AM
Max Deposit (by JB [OR]) Jun 23, 2018 10:57 AM
Max Deposit (by Hoosier [IN]) Jun 23, 2018 12:34 PM
Max Deposit (by Oregon Woodsmoke [ID]) Jun 23, 2018 1:00 PM
Max Deposit (by WMH [NC]) Jun 23, 2018 1:22 PM
Max Deposit (by NC INVESTOR [NC]) Jun 23, 2018 4:08 PM
Max Deposit (by Hammer [TN]) Jun 24, 2018 5:23 AM
Max Deposit (by Steve [MA]) Jun 24, 2018 7:29 AM
Max Deposit (by Vee [OH]) Jun 25, 2018 6:06 AM
Max Deposit (by Hoosier [IN]) Posted on: Jun 23, 2018 6:18 AM Message:
Is there any legal limit (probably varies by state) on the amount of a security deposit you can charge? It seems many landlords charge 1 month’s rent….what if I want to charge more?
Also, are you permitted to charge more if the person has something risky in their profile, such as an eviction or short tenure on their job?
--99.92.xxx.xxx |
Max Deposit (by WMH [NC]) Posted on: Jun 23, 2018 6:26 AM Message:
Check your state laws! It is spelled out there. --50.82.xxx.xx |
Max Deposit (by S i d [MO]) Posted on: Jun 23, 2018 7:59 AM Message:
As WMH says, state law will spell this out (or not). Missouri's max is 2x the monthly rent. However, they do not count pet deposits toward that amount. Even if they did, I charge pet fees, so it wouldn't count.
The key is creativity. If your state's law is like mine then maybe you cannot charge more than 2x the rent, but why not charge 2x the rent AND a move-in/leasing fee? Big boy apartment complexes in my area are charging "lease origination" fees...no refundable, of course, and they are paid for paper work processing, not as a depost. Most land lords already do the paper work processing for free....which is kinda crazy when you think about it. Attorneys don't process papers for free: why should we? Just because "that's how everyone else does it?" Silly reason, unless the market simply won't bear it. My guess is too many LL's are afraid, but if there's a risk to mitigate, then use a FEE that you get to keep no matter what.
A side note: I'm a Class C land lord, so almost by definition my tenants are a little riskier than most. I weed out the bad ones and go with the best of the market. I won't rent to anyone whose risk level requires more than a 2 month deposit. Just for a point of reference. --173.19.x.xxx |
Max Deposit (by Still Learning [NH]) Posted on: Jun 23, 2018 8:04 AM Message:
NH is limited to landlord holding not more than 1 month’s rent. --24.61.xxx.xx |
Max Deposit (by Hoosier [IN]) Posted on: Jun 23, 2018 8:12 AM Message:
I just read the Indiana code, seems there is no limit in Indiana. Sorry to bother all of you with the question. --99.92.xxx.xxx |
Max Deposit (by Hoosier [IN]) Posted on: Jun 23, 2018 8:16 AM Message:
Oh...but I'd still like responses to the other half of my question...can you charge more for risky people? In other words, would there be a potential discrimination issue? --99.92.xxx.xxx |
Max Deposit (by JB [OR]) Posted on: Jun 23, 2018 9:24 AM Message:
Yes, I would charge more for risky people. But I would put that in the ad that that could be the case.
Also, don't do the move in/leasing fee without first checking to see if it's legal in your state. It is illegal here! --50.45.xxx.xx |
Max Deposit (by Hoosier [IN]) Posted on: Jun 23, 2018 10:08 AM Message:
I could say in the ad something like "Security deposit $xxx for properly qualified applicants" or "fully qualified" or similar...that would cover charging more for high-risk apps --99.92.xxx.xxx |
Max Deposit (by JB [OR]) Posted on: Jun 23, 2018 10:18 AM Message:
What my ads say is Security Deposit is $1200 to $1800 or sometimes I write the amount as: "security deposit $1500 but management reserves the right to charge higher deposit if deemed necessary." That is the wording I have been using and haven't come across any issues so far. --50.45.xxx.xx |
Max Deposit (by WMH [NC]) Posted on: Jun 23, 2018 10:40 AM Message:
I'm curious as to how much money could cover a risky applicant? Risky in what way? What problems are you forseeing that $300 or $500 extra dollars would cover? --50.82.xxx.xx |
Max Deposit (by JB [OR]) Posted on: Jun 23, 2018 10:57 AM Message:
Well, I would see an extra $300 to $500 helping to cover a good portion of rent owing on a skip out or of generally significant help in damage or cleaning under normal circumstances.
WMH, are all your places left just as you rented them, clean and free of any damage? Mine nearly never are.
Although I wouldn't probably rent to a "risky" applicant, if someone may not have a great job history or good, verifiable rental history (if all else checks out good) I might deem them riskier and require a higher deposit. Same if I decide to accept their animal/s. --50.45.xxx.xx |
Max Deposit (by Hoosier [IN]) Posted on: Jun 23, 2018 12:34 PM Message:
WMH...I had one tenant who had gone through a divorce, and her alimony payment was not yet formalized through the court, but she had a "handshake" agreement with her husband on the amount, which would be enough to satisfy me. I made a special agreement with her that we'd double her deposit, but if she met one of two criteria I would release the extra month deposit to her. One criteria was a court-documented copy of the final alimony agreement at that amount or higher. The other criteria was 8 months of on-time payments.
It worked out fine...she made all payments on time and I gave her the extra deposit back.
This is just one example...others have come up. --99.92.xxx.xxx |
Max Deposit (by Oregon Woodsmoke [ID]) Posted on: Jun 23, 2018 1:00 PM Message:
Both deposit limits and legal fees will be mentioned in state and local law. If nothing is said about limits, you can charge whatever you can get away with. Be aware that too high move in costs will limit your tenant pool.
But, generally, unless your state or local l aw forbids it, you can charge high risk tenants extra deposit.
Just be real careful that what you consider to be "high risk" isn't protected by law. I consider a bunch of kids in a family to be high risk, but you can't charge that family more.
Someone with bad credit, yes, as long as you charge everyone with bad credit extra deposit and not just the Ethiopians with bad credit extra deposit. --174.216.xx.xx |
Max Deposit (by WMH [NC]) Posted on: Jun 23, 2018 1:22 PM Message:
That handshake agreement would have disqualified her for me, because no proof of nuttin' nowhere. I'd wait for a better qualified person... --50.82.xxx.xx |
Max Deposit (by NC INVESTOR [NC]) Posted on: Jun 23, 2018 4:08 PM Message:
To answer the second part of your question, initially we charged one month's SD for tenants with credit scores above 700 and a solid rental history. About 3 years ago we decided to require 2 month's SD irrespective of their credit score or rental history. Two months is our state limit. That means we can charge 2 months SD or 1 month SD and last month's rent but not 2 SD plus last month's rent.
It is entirely dependent on your state laws. However, even though many states don't have set limits there is an implied "reasonable" amount and generally the only way you'll discover what "reasonable" means is when you show up in court some day. --71.75.xx.xx |
Max Deposit (by Hammer [TN]) Posted on: Jun 24, 2018 5:23 AM Message:
A good way to cover yourself is to have a scoring sheet with written criteria for screening tenants.
We have one renter who paid a double security deposit due to short employment history. (new job) Everything else looked good but the 1.5months at new job made her score borderline. When we explained that her score was borderline but could rent to her with extra security deposit, she was happy to get the house. No discrimination or protected class issues. She has been great so far. --137.119.xxx.xxx |
Max Deposit (by Steve [MA]) Posted on: Jun 24, 2018 7:29 AM Message:
In MA the most we can collect is first, last, SD equal to first and a reasonable key / lock fee --72.93.xxx.xxx |
Max Deposit (by Vee [OH]) Posted on: Jun 25, 2018 6:06 AM Message:
I advertise my units with a 2xrent value deposit, 7 years running and it helps trim away the junky tenants without needing to get into criminal or background checks. --107.209.xxx.xx |
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