Residential Real Estate Agent · Ashburn, VA · Member since 2015 · 35 posts · 4 votes
In Virginia, the maximum deposit a landlord can take is two month rent.
I have a lady recently went through a messy divorce with bad credit who is interested in my property. She told me upfront that she has bad credit and their house went foreclosure. She is offering to put down 3 month rent as deposit.
I am a big believer that people deserves a second chance. Certainly, I am also worried her ability to pay the rent. Therefore, 3 month as deposit is something I want take.
My question is that is there a legal way to take the three month deposit? or as a different name or something?
Property Manager · Jupiter, FL · Member since 2015 · 76 posts · 25 votes
11y
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
11y
I would consider one month's worth a 'last month rent' and have a deposit equal to, but not considered 2 month's worth of rent. Better yet, reduce it by $25 so it is not confused as such. .."a maximum deposit of 2 month rent" is very confusing. Do not interchange or coming these terms in any way. Do not comingle the funds. Slippery slopes ahead, otherwise!
Specialist · Parsippany NJ · Member since 2010 · 128 posts · 47 votes
11y
I can't speak to specifics in Virginia, as I'm from NJ, but here the penalties for taking more than the max are strict and specific, so it's not worth the risk.
Would it be possible to have her pay the rent 1 month in advance for the whole term?
Property Manager · Jupiter, FL · Member since 2015 · 76 posts · 25 votes
11y
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
I would consider one month's worth a 'last month rent' and have a deposit equal to, but not considered 2 month's worth of rent. Better yet, reduce it by $25 so it is not confused as such. .."a maximum deposit of 2 month rent" is very confusing. Do not interchange or coming these terms in any way. Do not comingle the funds. Slippery slopes ahead, otherwise!
Kevin, make sure to read up on whether this above advice is legal in your state. This would be illegal in CA, as "last month's rent" is considered part of the deposit, which is 2 months' rent max for unfurnished rentals.
Personally, I wouldn't rent to this person. Bad credit is a big deal breaker for me. Don't care about the reason why it's bad.
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
Expressly illegal in many states, including mine.
Yup, also illegal in CA. Some people are treading dangerously here, giving legal advice that is often illegal.
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
Expressly illegal in many states, including mine.
Yup, also illegal in CA. Some people are treading dangerously here, giving legal advice that is often illegal.
I guess I should have said I am in the state of Florida which it is legal. I would hope anyone would seek legal counseling before actually making a decision. Nor have I ever claimed to be an attorney but simply giving my opinion. This is what a forum is, opinions, not legal counseling.
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
Expressly illegal in many states, including mine.
Yup, also illegal in CA. Some people are treading dangerously here, giving legal advice that is often illegal.
I guess I should have said I am in the state of Florida which it is legal. I would hope anyone would seek legal counseling before actually making a decision. Nor have I ever claimed to be an attorney but simply giving my opinion. This is what a forum is, opinions, not legal counseling.
I understand, and I didn't think you were trying to mislead the OP or give bad advice, but people have been known to get in legal trouble for giving legal advice/opinions on online forums, especially when they are not lawyers and/or what they are saying might be illegal in some places. That's why you see some people write things like "not a lawyer, not legal advice" at the end of a post where they give a legal opinion. Good way to cover your butt. :)
You can require the 2 month's as a refundable deposit and require the 1 month as a non-refundable fee since they have such bad credit and you are taking a big risk. I would see if they are ok with doing that.
Expressly illegal in many states, including mine.
Yup, also illegal in CA. Some people are treading dangerously here, giving legal advice that is often illegal.
I guess I should have said I am in the state of Florida which it is legal. I would hope anyone would seek legal counseling before actually making a decision. Nor have I ever claimed to be an attorney but simply giving my opinion. This is what a forum is, opinions, not legal counseling.
I understand, and I didn't think you were trying to mislead the OP or give bad advice, but people have been known to get in legal trouble for giving legal advice/opinions on online forums, especially when they are not lawyers and/or what they are saying might be illegal in some places. That's why you see some people write things like "not a lawyer, not legal advice" at the end of a post where they give a legal opinion. Good way to cover your butt. :)
I definitely understand. I never want to steer someone in the wrong direction. I even have it on my profile that all my posts are opinions and not legal advice. It's sad that people will actually sue over bad advice these days. Thank you for looking out.
Rental Property Investor · Cedar Park, TX · Member since 2014 · 414 posts · 272 votes
11y
Think about what you would do when the three months are up and she can't afford the rent.
Also, see this topic, which got an unbelievably big response: http://www.biggerpockets.com/forums/52/topics/197591-would-you-approve-an-applicant-with-a-big-advance-rent-payment
In Virginia, the maximum deposit a landlord can take is two month rent.
I have a lady recently went through a messy divorce with bad credit who is interested in my property. She told me upfront that she has bad credit and their house went foreclosure. She is offering to put down 3 month rent as deposit.
I am a big believer that people deserves a second chance. Certainly, I am also worried her ability to pay the rent. Therefore, 3 month as deposit is something I want take.
My question is that is there a legal way to take the three month deposit? or as a different name or something?
Thank you!
If it's illegal, it's illegal. A rose by any other name and all that :-)
Honestly, you should feel lucky that a recently divorced person doesn't qualify based on their credit. Divorcees are notorious for breaking leases and causing other drama, with the ex coming around and screaming arguments, yatta yatta. I once read the average person going through a divorce moves something like 9 times in the first year. So, count your blessings you can just deny her based on her credit and find another tenant.