| If you have been in property management long | | | | Therefore, you need to develop a standard form |
| enough, you have seen approved tenants change | | | | that specifically spells out the deposit is |
| their minds about leasing a rental for all sorts of | | | | non-refundable and why. Make copies and keep |
| crazy reasons. Just yesterday, I had a client give | | | | them in your car, work, and home. You never |
| me $200 deposit to rent a house in Tampa. She | | | | know when you will be called out to collect a |
| calls me this morning wanting to cancel because | | | | security deposit. I also have a receipt book and |
| she is afraid her furniture will not fit in the home. | | | | write an explanation on the receipt. This appeared |
| The house is a very small 3 Bed/2 Bath home in | | | | to be acceptable to the judge as well. However, it |
| a decent neighborhood. The tenant inspected the | | | | is preferable to have the tenant sign a standard |
| home on 3 different occasions, but she suddenly | | | | form so there can be no miscommunication of |
| develops buyer's remorse the day after putting | | | | the intent. |
| down a security deposit. I had already turned | | | | When a prospect attempts to cancel on their |
| down two other people who wanted to rent the | | | | promise to rent a property, you simply remind |
| home in the last 24 hours. | | | | them they will lose their security deposit. Here is |
| Prospective tenants will have all sorts of reasons | | | | where you will hear all sorts of explanations, |
| why they changed their minds. In my opinion, | | | | threats, and insults trying to convince you to |
| 50% of them just found a place they like better. | | | | refund the deposit. Just be polite and listen to |
| The other half are simply wishy washy. Collecting | | | | their arguments and then remind them of the |
| a non-refundable security deposit helps dissuade | | | | agreement they signed. I tell them, "I pulled the |
| people from changing their minds. I find that I only | | | | rental property off the market and turned away |
| have 1 out of 20 people, who want to change | | | | several good prospects because I had a deposit |
| their mind, actually forfeit their security deposit | | | | from you." Most people understand this, but they |
| and rent something else. Prospects need to have | | | | still try to guilt me into refunding the deposit. |
| "skin in the game" to ensure they follow through. | | | | You must be mentally prepared to hear all these |
| In order to make the non-refundable deposit truly | | | | guilt trips. They will claim the deposit is needed to |
| non-refundable, you must have the tenant sign a | | | | pay their electric bills or their kids will be in the |
| piece of paper stating that, if they do not move | | | | dark. The money is needed to buy groceries. |
| in by a certain date, the deposit is forfeited. If | | | | These people will give every reason and story |
| you do not have the tenant sign this type of | | | | under the sun to convince you to refund the |
| agreement, the tenant can take you small claims | | | | deposit. Just stay polite but firm and feel free to |
| court and win. In the State of Florida, the tenant | | | | end the conversation if the tone turns abusive. |
| can collect not only the deposit, but court costs | | | | You should not become angry and get in a |
| and up to triple the amount awarded by the | | | | shouting match. Once the client calms down, they |
| court. I have in fact been sued by a tenant for | | | | will often still rent your property, if you didn't lose |
| this very reason. The judge would have loved to | | | | your cool. |
| thrown the book at me, but I got the case | | | | This tip will save you thousands of dollars in lost |
| dismissed on procedure issue (the person suing | | | | rent if you implement it properly. It will also usually |
| was not the person who put down the deposit). | | | | convince the prospect to not change their mind. |
| From that point on, I have prospects sign an | | | | Therefore, in property management, you will |
| agreement. We also notify them of this policy on | | | | make a great deal of money from a tenant that |
| the rental application which they also sign. | | | | you would have lost. |