What can I offer tenants in exchange for their Deposit to Hold?

12 Replies

I'm trying to think about this from the tenant perspective.  What can I offer them besides that single document piece of paper in exchange for them paying me the deposit to hold money?  For example, how do I prove to them that I didn't just acquire a key to an empty building somewhere and showed them a unit that I didn't even own?

@Nicholas Lohr , you want to give them a copy of your deed? But seriously, this does happen a lot. If you collect the deposit in person you can show them a copy of something, but these days anyone can make a fake document. Tell them to go on the city tax site and look up the owner. That should ease their mind.

Most of these scams are not done in person.  The scammer hides behind fake email accounts and craigslist.  I've never had someone ask me if I own the property and if they did I would gladly show them the county tax records.  

I once had a prospective tenant want proof that I was current on my home loan .  He didnt want to move in and the house be in foreclosure .    

I told him , no 

@Matthew Paul , this is actually a reasonable request. Many people who have been foreclosed and evicted from their homes will rent the home to tenants to collect whatever money they can, knowing they have no power to honor the lease (also usually month to month). I wouldn't have a problem sharing this with a tenant. This is someone who is planning to be there for the long term, in my opinion.

I’ve never run into this issue, but can see the concern.

In California, unless you specifically tell the county assessor/recorder that you want your name listed on their website under the parcel number, it is private by default - but can still be obtained by going to the assessor’s office in person.

I guess that’s why there are notaries. Like any other legal document that may already require a notarized signature, you can have the rental agreement notarized - the notary checks your identification, records it, and gets your thumbprint.

Most UPS Stores and some banks/credit unions have notaries available during business hours - don’t bring your notary “friend,” as the tenant may not trust them either.

I "offer" to take down my ads and cancel any scheduled showing appointments.

@Al D. Getting a notary involved just proves you are who you say you are, it doesn't show ownership though. I can tell someone I'm John Sanderson, owner of this building, and the notary will make sure that I'm John Sanderson, but won't make sure I own the building.

That being said, I've had this question pop up, and I've shown the potential tenant the tax bill addressed to myself and that has sufficed. If that doesn't work for the potential, in my opinion that may be a bit of a red flag for a problem tenant. They're more likely to be extremely picky and may end up being a headache down the line, but that's something you'd have to gauge on an individual basis.

@Nicholas Lohr That is an interesting question. I'v never had it happen but I thought of a few things below. I'm sure there are holes in some of them, but the goal is not to have a  bulletproof means but just a means that is effective in easing the prospective tenants concern.

Show tax assessors website showing who the owner of the property is and then provide ID. If in your personal name the Drivers License, if in Entity then operating agreement, certificate of good business standing.

Previous tax return showing that the unit has been rented in the past by you.

Occupancy permit issued to you or your entity.

Rental Inspection completed by a gov't official issued to you or your entity.

Are you registered locally with any chambers of commerce, etc. Show them you are in good standing.

If the rental is in high demand (you have multiple prospects) remind them that they don't have the apartment until a deposit and lease are signed and that other tenants are interested.

Aside from the tenant looking up the property owner themselves, or showing them the deed, you could show some kind of official banking - i.e. a bank statement - with your business name, etc, just blacking out the information you don't want them to have. I use memos on my electronic deposit information, so it shows up that way on the bank statement - i.e. "Deposit 123 Main Street" . If all of that doesn't prove that you're legit, move on to another tenant.

That said, I would probably move on to another tenant anyway if anyone asked me to provide all of that information. We list all of our rentals through our business name, and have a presence in the area and references. 

@John Sanderson , you are correct about what “notarizing a document” is for, which is why I suggested that to the OP after the very first commenter here pointed out that documents can be falsified.

Someone else suggested having the prospective tenant go to the county’s tax website to verify the property owner’s identity. But that may be useless in California - unless the OP had requested that his ownership information be made public ahead of time. And, I would think that most people would prefer to keep that information less-easily accessible. So, what, then, to do in California, short of having the tenant go to the tax office in person?

Obviously, signatures, too, can be forged. That is why I suggested the notary option: that is where leaving one’s thumbprint can speak to the true identity of the signer, should that be needed later. That “raises the stakes.”

The OP is from California, did not say that the property(ies) is in another state, did not suggest that this would not be done in person, so I was left to presume that this would be in California. What’s at stake?

Here, we have Section 470 of the Penal Code. For anyone interested, look it up. The OP can have the prospective tenant look it up online, and also ask the notary (from a “neutral” business location - not a possible friend of the OP) to explain what notarizing a doc means.

If the prospective tenant would not be satisfied by going with a notary after reading 470PC (a felony, or at least a wobbler,) on top of the very acceptance of money for the property under false pretenses being a violation of 470PC (but criminals get away without being positively identified all the time) in itself, I’d, then, say that nothing would satisfy the tenant.

I imagine that just mentioning the notary - without having anyone read the legal statute - should be enough. Some foreigners even (mistakenly) view notaries as lawyers.

I can’t speak for other states’ notarization requirements, but here we take the thumb, a requirement for most real property transactions, and always suggested in any case. (Did you know that identical twins share same DNA, but their fingerprints are not identical? Not important for this discussion.)

I never said that this would be the best suggestion for the OP. It’s just a suggestion for California, as some of the good suggestions above may not work in California.