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Landlords asking for 3 months rent in advance

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    #92
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    I own properties in Dublin, Cork and Galway. I bought them in 2009 when property was cheaper. For years I have required new tenants to hand over the equivalent of 3 months rent (1st, last plus 1 deposit). I've had a few "no way" and "are you for real", but none of these properties have ever been empty, not once. And I have never had problems with the tenants so I have never had reason to withhold any of these deposits.

    I also have a house in a small town, the rent is much lower and as the perspective tenants have lower incomes, I only take 1st months rent plus 1 month deposit. I have had nothing but problems with this one. Non payment of last month's rent, late rent, damaged property, complaints about tenants from neighbours.

    A lot of the posters against the 3 month policy point to the fact that LL see this money as theirs to keep, but you are forgetting that tenants have the benefit of the RTA to compel LLs to return their deposits, LLs do not have that luxury when tenants don't pay their last month's rent or wreck the place.

    Also, it is rare for one person to rent a high cost rental by themselves, many tenants share so the 3 month down payment is also shared.

    The op appears not to grasp the concept that the 3 months is not a deposit, the tenent does not hand that over and then pay the 1st months rent on top of that. The deposit is still only equivalent to one month, the tenant gets the benefit of the use of the property for the first and last month of their tenancy by paying this.

    But at the end of the day, if the demand is there (which evidently it is) then it's either like it or lump it, SadProfessor you might not want to pay it but my experience tells me that many will.


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    #93
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Sad Professor has a problem It is not lack of money. It is begrudgery. AS long as he allows begrudgery to cloud his views on the subject he will spend his life raging against LLs. The trouble is that his views are colouring most of the law making and policy making in the state at this time. LLs are rich fat cats who can be visited with any number of financial hits. If it proves disastrous for them, then it was their own fault for investing anyway!


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    #94
    Sad Professor
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Technology & Internet Moderators Posts: 22,678 CMod ✭✭✭✭Sad Professor


    beauf wrote: »
    You're largely missing the point. Making it even less attractive or more attractive for LL's won't fix anything. Because 3 months deposits are only a side issue. LL are largely irrelevent to the problem.



    Supply is falling like a rocket.

    Asking the Govt to tackle issue with LL is kinda ironic. Considering its Govt causing the issue of supply and deposits, not LLs.



    http://www.thejournal.ie/64-local-authority-social-housing-houses-built-in-2015-alan-kelly-2747473-May2016/

    The low supply is of course creating the market conditions which are allowing landlords to demand double deposits. However, I believe the failure to address the continued low supply is the result of government policy to increase house prices. I’ve no problem discussing this but it’s an inherently political matter and thus probably doesn’t belong in this forum and I didn’t want to bring it up in the OP for fear of dragging the thread off-topic.

    We know landlords can do this in the current market. My question is should they? Regardless of the market, should landlords be able to charge double deposits and exploit vulnerable tenants looking for a roof over their head? Or do we need greater regulation?


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    #95
    FortySeven
    Closed Accounts Posts: 3,296 ✭✭✭FortySeven


    Sad Professor wrote: »
    The low supply is of course creating the market conditions which are allowing landlords to demand double deposits. However, I believe the failure to address the continued low supply is the result of government policy to increase house prices. I’ve no problem discussing this but it’s an inherently political matter and thus probably doesn’t belong in this forum and I didn’t want to bring it up in the OP for fear of dragging the thread off-topic.

    We know landlords can do this in the current market. My question is should they? Regardless of the market, should landlords be able to charge double deposits and exploit vulnerable tenants looking for a roof over their head? Or do we need greater regulation?


    I think it is obvious to everyone that we need new regulations for BOTH sides of the transaction. The current system is broken. I've never understood why we can't look to a system that works in another country and just copy it.


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    #96
    irishguy1983
    Registered Users Posts: 1,389 ✭✭✭irishguy1983


    FortySeven wrote: »
    I think it is obvious to everyone that we need new regulations for BOTH sides of the transaction. The current system is broken. I've never understood why we can't look to a system that works in another country and just copy it.

    Well said - I don't think it is fair to ask for 3 months up front. However it ain't fair on a landlord that takes a year to get rid of someone who doesn't pay.

    Needs to be changes on both.


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    #97
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Sad Professor wrote: »
    We know landlords can do this in the current market. My question is should they? Regardless of the market, should landlords be able to charge double deposits and exploit vulnerable tenants looking for a roof over their head? Or do we need greater regulation?

    I think landlords should be able to charge whatever deposit they wish. In a functioning rental market competition will keep such deposits at a reasonable level.

    I have no idea how you think constantly attacking one of probably the least significant aspects of a failing rental market is going to make much of a difference.


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    #98
    firestarter51
    Closed Accounts Posts: 2,382 ✭✭✭firestarter51


    irishguy1983 wrote: »
    Well said - I don't think it is fair to ask for 3 months up front. However it ain't fair on a landlord that takes a year to get rid of someone who doesn't pay.

    Needs to be changes on both.

    Totally agree
    Landlords are far from fat cats, more likely covering mortgage and expenses hoping to get the reward in 20-30 years


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    #99
    jester77
    Registered Users Posts: 11,264 ✭✭✭✭jester77


    Standard practice here in Germany, 3 months deposit, 1 month rent up front and the majority of the time 2.5 months rent to the agent. There are hardly any properties out there available without an agent.

    The 3 months deposit is held in a special account signed by both landlord and tenant. Neither has access without both signatures and it accumulates interest over time.

    People often complain about what the agent gets but I've yet to hear of anyone complaining about the deposit. They are now trying to move the agent costs on the landlord.


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    #100
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Sad Professor wrote: »
    No need to make personal attacks. You don't know anything about my personal and financial circumstances.

    I have been completely civil in this discussion. Please do me the same courtesy. I've never suggested all landlords are the same or singled out any of the landlords in this forum defending this practice.

    Mod note

    If you have a problem with a post please use the report function. As per forum charter we ask that you report rather than retort on thread. Thanks


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    #101
    irishguy1983
    Registered Users Posts: 1,389 ✭✭✭irishguy1983


    firestarter51 wrote: »
    Totally agree
    Landlords are far from fat cats, more likely covering mortgage and expenses hoping to get the reward in 20-30 years

    Ummmm...I'd imagine there are some fat cats and then there are some people just covering mortgages...There are some decent tenants and there are some pricks....

    Again just get changes in place for both sides and try make the whole thing a bit fairer really...


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    #102
    Sad Professor
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Technology & Internet Moderators Posts: 22,678 CMod ✭✭✭✭Sad Professor


    jester77 wrote: »
    Standard practice here in Germany, 3 months deposit, 1 month rent up front and the majority of the time 2.5 months rent to the agent. There are hardly any properties out there available without an agent.

    The 3 months deposit is held in a special account signed by both landlord and tenant. Neither has access without both signatures and it accumulates interest over time.

    So it's protected and you get interest on it. Well, that's a lot better than the system over here where we just hand it over and hope the landlord gives it back.

    Lets say the landlord wants to deduct something from the deposit? Is there a dispute process in Germany? How does it work?


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    #103
    anothernight
    Registered Users Posts: 2,541 ✭✭✭anothernight


    FortySeven wrote: »
    The current system is broken. I've never understood why we can't look to a system that works in another country and just copy it.

    That would be difficult, given that a lot of things that are the norm in some other countries are called unreasonable in this forum. First, last month's rent plus deposit is common in some countries, yet you have this thread. I've seen threads complaining about landlords asking for bank statements. Complaints about having to give their credit rating. Complaints about needing more than one reference.

    Good luck finding a country whose standard rental market model will be accepted by both tenants and landlords.


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    #104
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    Sad Professor wrote: »
    The low supply is of course creating the market conditions which are allowing landlords to demand double deposits

    Op, when you pay three months up front, you are not paying a double deposit. The deposit is still equivalent to one months rent. You will not have to pay rent the last month of your tenancy, you will have paid that at the start.


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    #105
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    Sad Professor wrote: »
    So it's protected and you get interest on it. Well, that's a lot better than the system over here where we just hand it over and hope the landlord gives it back....

    That's factually incorrect. There is a dispute mechanism here and its protected. It also there is negligible cost for the tenant.

    The LL have zero protection unless they go down a lengthy and massively expensive legal process.


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    #106
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    davo10 wrote: »
    Op, when you pay three months up front, you are not paying a double deposit. The deposit is still equivalent to one months rent. You will not have to pay rent the last month of your tenancy, you will have paid that at the start.

    That is incorrect. You should pay rent the last month. The full deposit is returned in normal circumstances. Using the deposit as rent (unless agreed) is a breach of the tenancy.


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    #107
    Sad Professor
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Technology & Internet Moderators Posts: 22,678 CMod ✭✭✭✭Sad Professor


    beauf wrote: »
    That is incorrect. You should pay rent the last month. The full deposit is returned in normal circumstances. Using the deposit as rent (unless agreed) is a breach of the tenancy.

    So this is a double deposit then?


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    #108
    yqtwqxqm
    Registered Users Posts: 422 ✭✭yqtwqxqm


    Asking for the first and and last months rent plus deposit before handing over the keys can achieve several things at once.

    We all no what they are so i wont go into them.

    And it should be clear in the ad too.

    Combine that with asking for the last 3 landlords references and you have narrowed down your pool of people to deal with.
    The reason for last 3 references is that you never trust the current landlords reference. He could say anything to get rid of a bad tenant. But if that tenant is no longer on his property he will sing like a canary. The more referees you speak to, the better chance you have of finding out what kind of tenant they are and of catching out a false referee. And you know they have a decent history of renting.

    All this is is a LL protecting his own interests as much as he can, since the government have stacked the deck so badly against them in the first place.

    It is not an attack on tenants. It is a way of narrowing down to the type of tenant that suits you.
    If you are happy and have experience with any particular type of tenant that you like you can set your rules to suit that tenant. ie if you are happy with anybody then have no deposit and lower the rent. You'll get loads of applicants.

    Personally I do Airbnb now because thats the type of tenant I want and I refuse to let the government use my property as they see fit anymore. Its almost like they think they own my property with the rules that they have given me to work with.

    Its up top every landlord as the business owner to run his business how he sees fit.

    If the market turns again then landlords will have to charge less and take less deposit if there arent enough tenants to go round.
    But for the moment there are plenty of takers for rentals.


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    #109
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    Sad Professor wrote: »
    The low supply is of course creating the market conditions which are allowing landlords to demand double deposits. However, I believe the failure to address the continued low supply is the result of government policy to increase house prices. I’ve no problem discussing this but it’s an inherently political matter and thus probably doesn’t belong in this forum and I didn’t want to bring it up in the OP for fear of dragging the thread off-topic.

    We know landlords can do this in the current market. My question is should they? Regardless of the market, should landlords be able to charge double deposits and exploit vulnerable tenants looking for a roof over their head? Or do we need greater regulation?

    Well if you want to ignore all the issues. Then a bigger deposit does not exploit anyone as they get it back normally.


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    #110
    K.Flyer
    Registered Users Posts: 8,565 ✭✭✭K.Flyer


    I really have to laugh at those who believe that the idea of larger deposits in the guise of deposit / first month / last month will guarantee them a better quality of tenant who will look after the place better.
    I have said this before on various threads, in short, just because they have the money for heafty deposits, doesn't mean they respect your property any better.
    As someone who is in and out of hundreds of rented properties a year, you would be shocked at what I have seen. And because of that I can understand the theory of the deposit change, but having money doesn't mean that people will have more respect for aproperty that is not theirs.


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    #111
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    Sad Professor wrote: »
    So this is a double deposit then?

    Double of what exactly.


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    #112
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    beauf wrote: »
    That is incorrect. You should pay rent the last month. The full deposit is returned in normal circumstances. Using the deposit as rent (unless agreed) is a breach of the tenancy.

    Ah, depends on what it states in the tenancy agreement. If you want to take a double deposit, that's your business and my guess is that it is that type of situation which gets people's goat up the most. Most LL have experience of tenants using their deposit as the last month's rent because they fear not getting it back, that leaves nothing for the LL to use to pay for repairs. By taking up first and last along with one month deposit then the LL knows that there is a deposit left to cover any bone fide damage.


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    #113
    Sad Professor
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Technology & Internet Moderators Posts: 22,678 CMod ✭✭✭✭Sad Professor


    beauf wrote: »
    Double of what exactly.

    Double the normal deposit of one months rent.


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    #114
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    K.Flyer wrote: »
    I really have to laugh at those who believe that the idea of larger deposits in the guise of deposit / first month / last month will guarantee them a better quality of tenant who will look after the place better.
    I have said this before on various threads, in short, just because they have the money for heafty deposits, doesn't mean they respect your property any better.
    As someone who is in and out of hundreds of rented properties a year, you would be shocked at what I have seen. And because of that I can understand the theory of the deposit change, but having money doesn't mean they will have more respect.

    I think you have to ask what the purpose of a deposit in general. Why is there one at all.
    A damage deposit or deposit is a sum of money paid in relation to a rented item to ensure it is returned in good condition.

    https://en.wikipedia.org/wiki/Damage_deposit

    It exists for lots of different financial agreements, for the same reason. Are you saying its flawed concept.


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    #115
    yqtwqxqm
    Registered Users Posts: 422 ✭✭yqtwqxqm


    K.Flyer wrote: »
    I really have to laugh at those who believe that the idea of larger deposits in the guise of deposit / first month / last month will guarantee them a better quality of tenant who will look after the place better.
    I have said this before on various threads, in short, just because they have the money for heafty deposits, doesn't mean they respect your property any better.
    As someone who is in and out of hundreds of rented properties a year, you would be shocked at what I have seen. And because of that I can understand the theory of the deposit change, but having money doesn't mean that people will have more respect for aproperty that is not theirs.

    In my experience it does.
    Of courese there are exceptions but in general.
    The more skin in the game the more respect.
    Of course you have to check their history as much as possible too.

    Look at airbnb. Two things on the line there. Airbnb can easily take damages off the guest without the owner having to jump thorough hoops like the RTB. And secondly the reputation element of airbnb.

    If been doing airbnb for a long time now and have never ever had an issue.
    I always filter on current reputation and i assume the guests do too.


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    #116
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    Sad Professor wrote: »
    Double the normal deposit of one months rent.

    Its 3 times one months rent.

    Unless you think one month of it can be used at rent. Which you can't.


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    #117
    K.Flyer
    Registered Users Posts: 8,565 ✭✭✭K.Flyer


    beauf wrote: »
    I think you have to ask what the purpose of a deposit in general. Why is there one at all.
    https://en.wikipedia.org/wiki/Damage_deposit
    It exists for lots of different financial agreements, for the same reason. Are you saying its flawed concept.

    I think we all know what a deposit means :rolleyes:
    My point was the theory of the deposit / first month / last month will not guarantee someone to have any better a tenant just because they can afford to drop almost 6k(if not more) on a lease agreement.


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    #118
    utmbuilder
    Registered Users Posts: 471 ✭✭utmbuilder


    the problem with tenners with wads of cash is they probably screwed over their last landlord for months to get lump sum they are giving to you, this has the possibility of attracting rouges already gone through the RTB system, and before you give me the whole "i do reference checks" or check the RTB database .. we all know that rarely works

    We all know the living costs here and that rents are at record levels for a while. If they have such big wads of saving power why are they not buying? 3 months rent could be almost 5 grand a nice chunk of a house deposit for a first time buyer.

    A rich rouge who knows how lack the RTB rules are and what they can get away with is far more dangerous than a standard well vetted tenant

    could work... but that extra month could cost you 20 grand,


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    #119
    K.Flyer
    Registered Users Posts: 8,565 ✭✭✭K.Flyer


    yqtwqxqm wrote: »
    In my experience it does.
    Of courese there are exceptions but in general.
    The more skin in the game the more respect.
    Of course you have to check their history as much as possible too.

    Look at airbnb. Two things on the line there. Airbnb can easily take damages off the guest without the owner having to jump thorough hoops like the RTB. And secondly the reputation element of airbnb.

    If been doing airbnb for a long time now and have never ever had an issue.
    I always filter on current reputation and i assume the guests do too.

    This is the difference, proper vetting and verifying of past history can enable one to determine if they have a decent tenant in front of them.


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    #120
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    K.Flyer wrote: »
    ...I think we all know what a deposit means :rolleyes:
    My point was the theory of the deposit / first month / last month will not guarantee someone to have any better a tenant just because they can afford to drop almost 6k(if not more) on a lease agreement.

    You don't seem to. Because you're not applying the same logic to deposits in general, to those for renting. If the renter is invested they are less likely to cause damage. Its also an immediate penalty, that can be recovered. Unlike taking them to court.


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    #121
    beauf
    Closed Accounts Posts: 22,648 ✭✭✭✭beauf


    K.Flyer wrote: »
    This is the difference, proper vetting and verifying of past history can enable one to determine if they have a decent tenant in front of them.

    We don't have that. References and vetting is easily fooled in the current system.


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