Shouldn't be a issue since landlords never lie to keep deposits right?
As someone who is likely going to be stuck renting for the foreseeable future, I agree. I'll happily pay my deposit to some sort of escrow that the landlord has zero access to until it's proven by a neutral third party, with no financial interest in the property, who has seen the property before and after renting.
Who’s going to pay this neutral third party to come see the property twice and allocate the deposit between the tenant and landlord?
Either the landlord or a split between the parties
A split between the parties might help avoid conflict of interests
Where I live it’s up to the landlord to dispute the return of the government-held bond and prove their case to the tribunal. If they do not dispute within two weeks after the tenant claims it, or are unsuccessful in proving damage, the government automatically releases the bond back to the tenant.
Realistically the viewing could be replaced by the landlord taking a series of before and after photographs that are approved by the tenant. A $2000 deposit held in just a CD would generate $100 in a year, which is enough to cover a good bit of any random additional costs
That's if everything goes well. What if the tenant does not approve the photos?
Last time we rented we put the deposit into a savings account. The landlords got the book needed to access it and we were the people needed to access it. That way we also collected interest on the deposit (which I think is technically mandatory in Germany).
And good thing we did that because we did have some trouble after we moved out.
Here, too, the tenant gets the deposit back and any interest accrued.
The escrow company gets to invest the deposit. They can use a portion of those funds to determine who receives the payout.
You mean they keep a portion of the deposit to determine who receives the payout? If you meant they only keep a portion of the revenues produced by the investment, which obviously must be one of the safest ones available and thus will have low return on investment, I'm afraid that would not be economically viable for the escrow company.
Looks like there are accounts that can earn 3.5%. It's an hour or two of work. Average occupancy rate is close to three years. A $2000 deposit would cover an inspection after a year.
Fallback could be on the renter if there is reason to withhold and on the owner if there is no need to withhold.
Assuming your numbers are correct, after one year the interest is $70. I doubt you’d get anyone out to conduct the inspection at that price, let alone two because you need one at move in and one at move out; and let’s not even get started about potential the additional work should there be a dispute by the tenant or the landlord.
My honest opinion? By the city. Yeah i know that introduces another layer of issues, but there needs to be some sort of integrity in place so there's no conflict of interest coughutahlegislaturecough
The state. It's literally how this works in other countries. (Victoria, Australia, anyway)
In Brazil, tge escrow is keep by an insurance company, for the landlord to keep its need a judicial order, and at the end you receive it back adjusted by inflation.
When I was in Belgium I had to open a specific bank account for it. The money was then blocked on this account.
To release the money both me and the landlord had to find an agreement and sign the release documents. If we could not find an agreement then we would have to go to a judge to decide who gets what.
And at the end you get the deposit back+interests.
I liked this solution, it felt fair for both parties.
They have a deposit protection scheme in the UK where neither the landlord nor the tenant have full control of the amount. It's very useful. Much better than the landlord having the money in his possession.
This, the limit on how much it could be, and the ban on charging any additional fees, absolute game changers! The changing them not being able to tax deduct mortgage payments has also changed behaviour. I mean, landlords are still a huge drain on society and rents are mental but these steps help
This was a big change when we moved to the UK. It makes sense to have a third party involve with photos of everything before you rent. Should be standard really.
In Canada, most provinces do this already.
In NZ if the bond is not lodged with the tenancy tribunal within a couple of weeks, the LL is in serious trouble.
Meanwhile in America, my old ll tried to tell me I couldn't have my deposit back because "it's summer and the bank is on vacation"
It's a requirement in Australia for it to be paid to the government bond agency. Typical method of paying it is a cheque payable only to the bond authority. Once you hand back the keys at the end of the lease you can apply directly to the bond agency for it to be refunded to you and the landlord needs to formally object to claim any of the bond.
That sounds like a way more reasonable system! As far as I'm aware it's not super common here (Netherlands) for landlords to not pay back the deposit but it is entirely in their hands :(
Well, still plenty of dogdy landlords who take advantage of people who don't know about that requirement and either take it for themselves or push renters towards "resolving disputes between themselves" and not involving the bond authority at end of lease time.
I mean apartments should be run by the state but baby steps I guess
Ah yes... Lords of land... The greatest of leeches.
Wait, this ISN'T how it works where you live?
Where I live (in Victoria, Australia), the bond is held in trust by the residential tenancies bond authority. At the end of the lease the landlord can try make a claim, but you can take them to VCAT (a small claims tribunal) to argue against it, and until either all parties agree, or the court orders it, the bond doesn't get paid out to anyone.
Our laws are far from good, and still favour owners too much, but damn. Just trusting them to pay you out of their own pocket?
Just trusting them to pay you out of their own pocket?
actually the opposite! everyone here just expects to never see their deposit ever again
😬
Just trusting them to pay you out of their own pocket?
Assuming US, it actually depends on the state (may be all states, but I can only speak of those I've lived in). The law is that the money must go into a separate interest bearing account and that is the money that is to be returned. So the money isn't supposed be their own pocket.
... what kind of deposits? 😮
Security deposits are a type of refundable fee where a tenant pays a specific amount (often many hundreds of dollars) to a landlord to "ensure" that they don't damage a residence while living there. If the residence is damaged, the landlord keeps the deposit. The term is derived from contract law where "security" just means a way to make sure that a party to a contract meets their contractual obligations.
There are many instances where a landlord illegally keeps the deposit over damage that was either already existing or minimal (also referred to as "wear and tear" damage, which is expected when you live somewhere long-term), so OP is calling for the courts to determine the extent of damage to prevent landlords from taking advantage of tenants.
In some jurisdictions (like the one I live in), security deposits and most other related deposits such as key deposits (i.e., a refundable fee paid to obtain a key to the residence) are completely illegal in order to eliminate the possibility entirely.
Sorry, still new migrant. Just wanted to say I have never seen the descriptions of the emojis before! I was getting some of them SO wrong! 😱
In Germany, it is possible to ''make a deposit'' with the bank, so the landlord gets only the confirmation (Bürgschaft). Furthermore, it is also a thing to pay that deposit in rates (installments), not to burden the new tennant immediatelly.
I think it works a lot like insurance: you pay a smidge every month, but you also get no money back at the end, so... not really a deposit. However, it does satisfy the landlord and the deposit is legally provided, so... to give up one or two coffee's every month (for a couple of years) is worth it at the rough beginnings.
For comparisson, you pay some 20 € monthly instead of 3500 € on hands of the landlord. You are moving, you are already burdened with the costs and expenses, so instead of having a financial blow on top of all the misery, you simply walk into the bank, make ''Bürgschaft'' (depost confirmation), agree to pay 20 € monthly, beginning from next month... and you exhale. It is a practical guarantee that the bank wil cover your deposit.
You give that ''Bürgschaft'' (deposit confirmation) to your landlord and all is good. If your landlord later, turns out to be an a..hole, he has to claim the deposit with the bank. If you contest landlords claims (bank will 100% contact you in that case), then it is a direct war between him/her and the bank... and good luck with that. To you it is all the same anyway, as you pay (paid) monthly installment (rate).
If there are no disputes and you are moving out earlier, then you can simply cancel the ''Bürgschaft'' contract (based on canceled rent agreement) and you don't have to pay anymore.
The downside is - no money back.
It is not really a hype thing here, but I've done it and it worked OK; (no disputes though).
There's a similar thing in the US but many landlords don't accept it.
I mean, the court will definitely be involved if i don't get my deposit plus interest back.
You can demand itemized receipts for everything they want to take from the deposit, at least I’m California
Above $125.