2 Months Deposit when renting. Normal?

Holysock

Hi all

I was all set to rent a place recently however it then transpired that the landlord was insisting on 1 months rent plus 2 months rent worth of a deposit. I was advised that the second month of the deposit could be paid in installments over a few months however it put me off the whole thing so didn't end up renting it in the end. I just wanted to see if this is unusual and has anyone come across this before? Is it normal practice now?

c montgomery

Holysock wrote: »

Hi all

I was all set to rent a place recently however it then transpired that the landlord was insisting on 1 months rent plus a 2 months deposit. I was advised that the second month of the deposit could be paid in installments over a few months however it put me off the whole thing so didn't end up renting it in the end. I just wanted to see if this is unusual and has anyone come across this before? Is it normal practice now?

I think it should be the norm.
I'm hearing of alot of tenants not paying the last months deposit and leaving a week or 2 early without notifying the landlord as there may be some damage to the property etc...
As their not paying the last months rent they see the deposit as covering this however the landlord is out of pocket for any damage.

When I rent a car I have to stump up my credit card for any damages for an asset that costs about 30k. Most houses cost over 250k yet landlords are expected to be happy with on average a 1k deposit and no real comeback.

Victor

c montgomery wrote: »

Most houses cost over 250k yet landlords are expected to be happy with on average a 1k deposit and no real comeback.

If fairness, your €250,000 includes the land value, so it is generally impractical for a tenant to do more damage to the property than the reconstruction value, which might only be €100,000. the only exception might be contamination of land from a leaking oil tank or the like.

salamanca22

c montgomery wrote: »

I think it should be the norm.
I'm hearing of alot of tenants not paying the last months deposit and leaving a week or 2 early without notifying the landlord as there may be some damage to the property etc...

And also a lot about landlords keeping deposits when they should not be.

Unless in a high demand area I would definitely not pay 2 months deposit. There are other places.

However, if there were a third part holding service for deposits like the UKs TDP I would more easily hand over 2 months deposit if absolutely required.

iainBB

salamanca22 wrote: »

And also a lot about landlords keeping deposits when they should not be.

Unless in a high demand area I would definitely not pay 2 months deposit. There are other places.

However, if there were a third part holding service for deposits like the UKs TDP I would more easily hand over 2 months deposit if absolutely required.

We change 1.5 month and I think I will move to 2 months next rental. last month people are not paying rent thinking the deposit is for that.

delthedriver

2 month deposit should be the norm. Ask any landlord who has had a premises trashed by a tenant!!!!

syklops

Value the contents of the house and add the estimate of what fixing a 'trashed' house would be and theres your deposit amount.

When you rent a car there is a chance that you never return and rob the car. Short of burning it to the ground you can't rob a house.

delthedriver

syklops wrote: »

Value the contents of the house and add the estimate of what fixing a 'trashed' house would be and theres your deposit amount.

When you rent a car there is a chance that you never return and rob the car. Short of burning it to the ground you can't rob a house.

So a ten grand deposit should be a minimum?

theteal

Out deposit over here was 1.4 * monthly rent. The fact that it's held by a 3rd party deposit scheme made it a no brainer for me. Were I renting in Ireland handing that straight to a landlord, I would have serious resevations

punisher5112

There should be a better system in place where the prtb fails on.

Deposits should be held by a 3rd party and also inspection of the property and noted and defects or damage.

At the end of tenancy the deposit should be there for renter to use at next property if needed or paid back.

Obviously if there are damages or costs involved that should be taken but there should also be a way of getting all money owed.

The idea that a person can stay in a property for months or even years without paying rent is a joke.

There should be proper legislation on this and also all the mortgage holders that don't pay and the buy to let LL that get to keep the rent money but forget about paying mortgage for up to 2years should be chased for all the money.

delthedriver

A lot of landlords are keeping properties vacant, the tide has turned !


Landlords can afford to be extremely choosy .................. . Too many landlords have been screwed by tenants. Chasing a man of straw through the PRTB is a complete waste of time.

c montgomery

c montgomery wrote: »

When I rent a car I have to stump up my credit card for any damages for an asset that costs about 30k. Most houses cost over 250k yet landlords are expected to be happy with on average a 1k deposit and no real comeback.

When I rent a car I stump up my credit card, with a 500 euro credit limit good luck getting much out of that car hire company!

If a LL asked me for two months rent I'd laugh in his/hers face and walk away! I'd rather put the 2nd months rent on a horse than give it to a landlord to spend or make interest on.

davo10

Jovanni Whining Slammer wrote: »

When I rent a car I stump up my credit card, with a 500 euro credit limit good luck getting much out of that car hire company!

If a LL asked me for two months rent I'd laugh in his/hers face and walk away! I'd rather put the 2nd months rent on a horse than give it to a landlord to spend or make interest on.

A deposit of at least two months is becoming more and more popular and I think will soon be the norm. As stated earlier, a lot of tenants believe that it is ok not to pay the final months rent, this can leave a LL with losses due to damage which are above and beyond wear and tear.
I have taken two months deposit for the last 4-5 years, I've never refused to give back a deposit and any time I have retained some of it, it was for genuine repaired which were agreed with the tenant. Since I started to take 2 months, not once has any tenant refused to pay their last month's rent whereas it happened me a few times when it was just one month deposit.

As for the above post, if the tenant doesn't want to pay 2 months, I don't laugh in their face, I just ask them to move aside a little so that the person behind them can pay it.

MarkAnthony

Wasn't a few months back and in Dublin 8 was it OP?

I don't ask tenants for 2 months deposit but I do ask for two months rent. I think it's a fair compromise but you'd think I'd have asked for the first born the way some people reacted when I suggested it in this forum before! :pac:

The way I do it is the US system (my only reason for calling it that is it's off Judge Judy!). First and last month's rent + 1 month deposit. Because it's not the norm I offered people the option to pay in installments, I probably won't next time.

To be fair I refund the difference if the rent goes down and don't charge the difference if the rent goes up (I've had the interest at 0.1% after all )

That way everyone is happy as there is no question of them getting that part back as they just skip a month at the end.

Personally I wouldn't hand over 2 months deposit but Davo has it 100% correct above.

EDIT: As for Car Hire companies there is a way round credit limits apparently - but that's OT.

Jaketherake

delthedriver wrote: »

A lot of landlords are keeping properties vacant, the tide has turned !


Landlords can afford to be extremely choosy .................. . Too many landlords have been screwed by tenants. Chasing a man of straw through the PRTB is a complete waste of time.

I hear ya. I originally registered to look at something else but this thread caught my eye.

I am a landlord of almost 20 years, with 5 properties in Dublin.
About a year and a half ago, due to experience with the PRTB, I decided that anything to do with the PRTB was a joke and totally and unfairly stacked against the landlord.

So since then I have taken steps that seem to be working well to remove the PRTB from my life.

I had already had problems relating to deposits and damage etc in the past, so I had already for the last few years been asking for 2 months deposit, letting without mattresses (why do tenants always stink these up and remove covers from them) and giving a cash bonus when a tenant had spent each year without me having to fix anything (this worked really well).

Those measures worked out very well, but I digress. The PRTB are the problem.

So what I did was, when the tenants left, I put 3 of the properties on AirBnB. It was slow at first and I had to figure it out, but now I make more from those properties than I did from renting them.

There were and are a few issues, but i am taking steps to sort them out, but i'll list the advantages and disadvantages quickly

Advantages:

- NEVER HAVE TO DEAL WITH PRTB or give them money for registering.

- Properties are always spotless after guests leave. I charge a €25 cleaning fee and have a cleaner who cleans after every rental.

- AirBnB are actually quite easy to deal with (most of the time, i'll go into this in a minute).

- I can charge different amounts, depending on the demand, but demand is quite good.

- I make more money than renting - surprisingly to me.

- No overholding, Credit cards cover any damage. Tenant is ALWAYS liable and REACHABLE for damage they cause. Unlike with the PRTB where the tenant cannot be got at at all for damages.

Disadvantages

- Dealing with AirBnB when there are booking problems. Its like a call center. Ridiculous.

- AirBnB have a lot of rules, so when things are going ok they are fine, but bureaucratic when not. tbh i think there is a market for a similar service but geared specifically to landlords. AirBnB are not the full package, but the only option at the moment. They are still very amateurish.

- Lots of work for me. But I employed my nephew. He now deals with keys, checks, fielding calls and emails etc. He enjoys it and I give him a %, otherwise I would hand this over to an agent, because its too much work for me.

- Bookings may be very strong one months and then the next very week, so not constant. A concert or big event can have you booked out for a week.

- Too much interaction required compared to renting, but I have outsourced this


Anyway, sorry about how long that was. It started as just a rant against the PRTB.
I'll probably do the same with the other properties, but the tenants have been in those ones for years and I think i'll keep that the way it is til they move out and then make a decision.

But the whole landlording game has gone against the landlord big time. And Politicians going on about the crises and rent control and all that sh!t, but what they dont say is that their share of the rent that tenants pay is over 60% and they dont want anything to happen to that.

borderlinemeath

The months deposit doesn't really work anymore. So many tenants will not pay their last months rent as they are convinced the big bad landlord will not return it. In addition, if you were to go by the rules of the RTA, ie if you give 14 days notice to pay late rent, then issue a 28 day eviction notice - you're six weeks in already without any rent paid so the tenant is indebted already, regardless of whether they've trashed the place or not. So perhaps the minimum deposit should be 1.5 months rent. My husband has just let a house and for the first time asked for 2 months deposit plus the first months rent and had no trouble getting it.

borderlinemeath

Jaketherake wrote: »

.

I am a landlord of almost 20 years, with 5 properties in Dublin.
About a year and a half ago, due to experience with the PRTB, I decided that anything to do with the PRTB was a joke and totally and unfairly stacked against the landlord.

The PRTB will say as much themselves, 80% of the cases go in the tenants favour, even when they may rule against a tenant, getting anything from them is an exercise in futility. What's even more annoying is that the landlord has to pay for the registration when it's the tenant that gets all the protection. You'll have a tenant squat in your property for a year and get nothing at the end of it, but change the locks and the tenant may get awarded a fairly decent settlement against the landlord. It really is time for legislation to change and give landlords some protection against rogue tenants who squat and destroy their assets.

Jaketherake

borderlinemeath wrote: »

The months deposit doesn't really work anymore. So many tenants will not pay their last months rent as they are convinced the big bad landlord will not return it. In addition, if you were to go by the rules of the RTA, ie if you give 14 days notice to pay late rent, then issue a 28 day eviction notice - you're six weeks in already without any rent paid so the tenant is indebted already, regardless of whether they've trashed the place or not. So perhaps the minimum deposit should be 1.5 months rent. My husband has just let a house and for the first time asked for 2 months deposit plus the first months rent and had no trouble getting it.

I got around the problem the tenant not paying the last months rent (most of the time).

I charge market rent. So I tell the tenant on moving in that I have budgeted €500 for expenses for the property during the year.
On the anniversary of their rental, what remains will be given to them. And if it happens that they leave 1.5 years after moving in and i havent had to dip into that budget they will get €500 at the end of 12 months and €250 the day they leave, provided the rent is up to date and the budget is intact.

I also tell them that if I have to call them about late rent or anything else then thats using my time so its €50 off that budget straight away.

You would be amazed at the amount of times the tenant now fixes small things, or buys their own stuff instead of asking me for it. Because coming to me now costs them money as they see it.


Before I did that they were calling me about letterboxes not closing properly, lightbulbs buzzing, fuses gone in the hoover, hoover bags, shower hoses, doorbell batteries, squeeky handles on doors .... you name it.

Now they dont, they learn how to change fuses, oil hinges, buy a shower hose for a fiver, buy a battery for a doorbell. All that costs them a few euro. For me to do it would cost €50 plus the few euro.

Now I find tax and PRTB are my biggest bug bears.

borderlinemeath

Whatever about the taxation (we all have to pay it) the complete unfairness of the PRTB and how it's stacked in the tenants favour along with the lack of protection for landlords in the legislation is what is most soul destroying.

athtrasna

Mod note

Can we get back on topic please. This thread is not about the PRTB

Holysock

<mod snip>

OP here. No it wasn't even in Dublin actually, it was North Wicklow which is why I was a bit thrown by it. I would have been less surprised if it had been in Dublin! I'm pretty new to renting so at least I'm aware of the reasoning behind it from the landlords perspective now and can make the decision next time a bit more informed! Still not sure I would pay it next time but at least now I'm not as suspicious

Thanks for all the replies everyone

syklops

delthedriver wrote: »

So a ten grand deposit should be a minimum?

I know this comment was tongue in cheek, but even so, if replacing the essentials and repainting the gaff comes even close to 10k then you are doing it wrong.

handlemaster

Two months should be the norm. This still doesnt cover bad tenants.

skallywag

If Ireland is going to come into line with countries which have traditionally taken renting much more seriously then the deposit needs to rise from one month, in fact three months is the norm in many Central European countries which have much more mature rental markets. It's just one of many things which need to change of course, such as longer leases & notice periods, tighter contracts, ability to rent in am empty condition, etc.

quietsailor

If the new rules come in about not rising rents in 4 years -- which is the period of a PRTB lease - then LLs might start asking for deposits to cover 4 years.

A month per year is 4 months of a deposit, 2 months per year is 8 months deposit. 4 or 8 months sounds and IS, huge but the general population would want to be very careful what we look for as LLs can put a valid case forward for these huge deposits -- "you want to have 4 yr tenancies with no rent reviews, fine we want deposits to match"

delthedriver

syklops wrote: »

I know this comment was tongue in cheek, but even so, if replacing the essentials and repainting the gaff comes even close to 10k then you are doing it wrong.

A Tennant who fails to pay rent for 12 months, then trashes the place can easily cost north of 10k

davo10

quietsailor wrote: »

If the new rules come in about not rising rents in 4 years -- which is the period of a PRTB lease - then LLs might start asking for deposits to cover 4 years.

A month per year is 4 months of a deposit, 2 months per year is 8 months deposit. 4 or 8 months sounds and IS, huge but the general population would want to be very careful what we look for as LLs can put a valid case forward for these huge deposits -- "you want to have 4 yr tenancies with no rent reviews, fine we want deposits to match"

I'm not sure that you have that right. Rents can rise during the 4 years but they are linked to inflation. They can also be raised if there is a change to the LLs financial situation related to the property, for instance if there was an interest rate rise or a rise is costs associated with the house like insurance, renovation and refurbishment, property tax etc. The government could not impose a draconian limit on private rentals without some wriggle room for increased costs.

Also I don't know about the 1-2 months deposit per year, the 2 months deposit would be for the term of the lease, the tenant pays that up front before moving in but does not have to pay any further deposit a year later.

handlemaster

syklops wrote: »

I know this comment was tongue in cheek, but even so, if replacing the essentials and repainting the gaff comes even close to 10k then you are doing it wrong.

go get some quotes to replace furniture for a house, internal damage, clearing out of filth and rubbish, then decorate and fix damaged walls etc etc Then put lost rent, mortgage payments, estate agents fees etc on top. It adds up quickly plus insurance doesn't cover damage by tenants who occupy the property

pwurple

syklops wrote: »

I know this comment was tongue in cheek, but even so, if replacing the essentials and repainting the gaff comes even close to 10k then you are doing it wrong.

Nope. You're doing it right if you put in quality appliances instead of crap you picked out of a skip.

How much do you think a household of appliances and fixtures and fittings costs? I rent unfurnished. A working kitchen will still cost thousands and someone can destroy it in a few minutes by pouring burning oil over it.

I had a tenant who destroyed every internal door in the property with a hatchet, and put several holes in walls during what he described as "a lovers tiff". Deposit came nowhere near covering it.

Landlords take a risk renting their property to total strangers. That is why they ask for financial protection.

testaccount123

pwurple wrote: »

Landlords take a risk renting their property to total strangers. That is why they ask for financial protection.

Serious question - Is it possible to insure against these risks?

handlemaster

testaccount123 wrote: »

Serious question - Is it possible to insure against these risks?

my understanding is not. as the tenant is in the property with the permission of the landlord. Although the landlord does not give the tenant permission to trash the place