have noticed in multiple episodes of Million Dollar Listing LA (and possibly NY but i rarely watch that one) that sometimes in marketing the sale of some homes, a rental deal is closed where the renter agrees to prepay the entire lease term (ie, entire 1 year, entire 2 years) up front.
is this legal? or does anything beyond the first months rent in CA count as a refundable security deposit?
surely an argument can be made that since the lease term is 1 year, prepayment of the whole year fulfills the lease agreement, not 1 month of the lease term and the rest refundable as 'security deposit' in CA, no?
the lease agreement i use clearly stipulates what amount is deposit vs prepaid rent. Prepaid rent amount is also clearly written into the lease.
Prepaid rent is legal and becoming more common in competitve markets. To avoid any confusion make sure lease is clear. I just closed a lease where the tenant prepaid 6 months rent in order to secure the lease over another well qualified applicant.
thanks Boris for your insight and experience. this contrasts with what i've read elsewhere, ie, something about 'anything other than 1st months rent' is considered a security deposit in CA.
in a particular upcoming temp rental situation, want first and last month to be prepaid, in order to establish an initial 2-month minimum term, prepaid, and month-to-month thereafter.
but if that is illegal in CA, then hopefully a quarterly prepaid rent (3 months term) or biannually prepaid rent (6 months term) are 'kosher' in cali? again based on the tv series' transactions, for what they're worth, even a full year or a 2-year rent term all prepaid in CA is portrayed as sound.
perhaps others in CA can chime in.