Security deposits are one of the most important tools a landlord has to protect his/her rental property.
We have found that 92% of landlords collect a security deposit – as it is generally considered standard operating procedure for furnished rentals.
The average security deposit on a corporate rental is as low as $500 up to one month’s rent. Owners sometimes charge a separate pet deposit to insure themselves against damage and wear and tear caused by a pet. Security deposits must be given back to the tenant (if no damage is done to the property) in a timely fashion. State laws govern this time period (generally within 21 days). I recommend returning it as soon as the tenant leaves and you’ve had a chance to inspect the property. The more time that passes, the more questions may arise as to whether the damage was done by that tenant or a following tenant.
In today’s tight business market, corporations often balk at the idea of locking up money in a security deposit – and it can kill a deal. Because landlords feel pressured, they may skip the security deposit in order to seal the deal. But beware if you do this, because someone who isn’t willing to pay a security deposit may have something to hide. Do your homework and research the client before making any rash decisions about whether to skip the deposit or not. If it’s a reputable corporation, you can probably feel good that the property will be gently used by its employee and that the company will cover any damage to the unit. After doing a little research on the company or individual and things turn up okay, you can also have them sign a LOR, or letter of responsibility, which you can download from your MyCHBO account.
Remember, security deposits are meant to protect your property and yourself from unruly tenants. Most of the time (especially in the corporate rental world) they are never tapped… but they sure do make an effective incentive for a tenant to keep the place orderly. That said, you can be flexible with your security deposit policy when working with reputable corporations. Ultimately you have to go with what works best for you taking into consideration your clientele.
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