There are two ways to earn income from residential real estate - through profitable sales and by renting out housing. Moreover, if in the first case we are talking about a one-time receipt of funds, then in the second, the property owner can count on long-term passive income, which makes this strategy similar to placing savings on a bank deposit.
However, Russians consider renting out housing a more effective way to earn money than a bank deposit. According to surveys by the analytical center of the National Agency for Financial Research, citizens named the purchase of real estate as the most reliable investment (49%). “Buyers who choose the rentier route receive a certain amount from month to month, but the downside is the payback period is 15-18 years long,” notes Natalia Kuznetsova, general director of the Bon Ton real estate agency.
According to the INCOM-Real Estate company, currently 44,644 residential real estate properties are rented out within the old borders of Moscow alone, of which 88% are apartments and 12% are rooms. Over the year, total supply increased by 27.5%. That is, the number of Muscovites renting housing increased by a little more than a quarter during this period.
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“The growth in rental supply is evidence of the social vulnerability of a significant segment of the population. Indeed, for many, renting out housing is becoming the main source of income,” comments Oksana Polyakova, deputy director of the apartment rental department at INCOM-Real Estate.
As noted in, today one-room apartments are the most in demand on the rental market. More than 30% of all tenants are looking for this particular type of housing, although during the crisis the share of rooms in the rental market also increased.
The concept of collateral: what is it?
When renting out real estate, its owner bears certain risks: the sudden departure of a tenant without warning will lead to loss of income (until a new tenant is found)
, property damage or repairs will require certain expenses. The deposit is a certain amount of money, which is a guarantee that, firstly, the apartment will remain safe, and secondly, the tenant will not leave it unexpectedly before the end of the contract period.
If something like this happens, the deposited amount will automatically serve as a contribution for the last month of rent
or will be spent on repairs, purchase of furniture, interior design, and household appliances.
The deposit is also a kind of insurance in case the tenants cause material damage to the neighbors. In addition, this money can be used to pay off debts on utility bills left by the tenant. If the owner is warned in a timely manner, the tenant receives his money back.
The amount is reflected in the contract and is usually paid before moving into the rented apartment. The amount of the deposit is determined by the landlord, based on how he assesses the risks associated with strangers moving into his living space.
Definition of collateral
This is the amount when renting out a home, which the tenant pays as a guarantee of his intention to rent the home until a certain period (usually until the end of the contract, if any).
Often the wording “first and last month of rent” appears in oral agreements, that is, the tenant pays 2 monthly living expenses , one of which is payment for the current month, and the second is collateral for his intentions to rent housing for at least another month.
Unlike a security deposit, the deposit covers only the cost of delivery and is not intended to compensate for losses in case of property damage.
However, by mutual agreement of the parties, at the end of the rental period, the security deposit can be used to reimburse the cost of repairs/cleaning (for example, if the tenants leave earlier than the period stipulated in the contract), just as the insurance deposit can be used to pay for the last month of residence .
How to get this money back for renting out an apartment? Its amount, as well as the amount of the security deposit, is kept by the lessor until the end of the contract . These types of security deposits do not in any way relate to the commission for the services of an agency/private realtor.
The commission is the money that is paid to the intermediary and is not returned at the end of the rental period, unlike the insurance deposit.
Find out what the payment for renting a residential premises includes from our article.
Lease agreement with security deposit: what should be specified
Execution of such a document is highly desirable if home electronics, household appliances, high-quality furniture remain in the living space, or if the apartment is being rented out after expensive renovations.
However, an agreement with a deposit is signed even in cases where “bare walls” with working plumbing are leased
(in case of sudden disappearance of residents)
. As a rule, the document records:
- information about each party;
- general information about the residential space for rent;
- monthly payment amount;
- the amount of the deposit paid before moving in;
- duties and responsibilities of the landlord and tenant;
- validity period of the signed agreement;
- conditions and possibilities for terminating the contract.
The payment of the deposit, as well as the subsequent transfer of the agreed amounts as monthly payment, is issued in the form of a receipt. The tenant must require a receipt and keep it until the end of the rental period, since in controversial cases the document will become the only confirmation of payment.
The agreement should only be concluded in writing, even if the landlord is a good friend, and the temptation is great to avoid unnecessary bureaucracy.
If housing is rented for a period of more than a year, the transaction must also be officially registered with Rosreestr, as well as the residents must be registered. If the last rule is not followed, the owner may face a fine.
Receipt requirements
The receipt is not at all a free essay on the topic of transferring funds, but is an important document that requires compliance with certain rules for its preparation. Mandatory certification by a notary is not provided for by law, but when we are talking about a decent amount or concluding an agreement through proxies, it makes sense to contact a government representative who will witness the transfer of money.
If you decide to do without a notary, it is important:
- clearly indicate that the amount transferred to the owner of the property is precisely the deposit (or deposit)
made in accordance with the rental agreement; - be sure to provide information about both parties;
- clearly record not only the place of transfer of money, but also the time of payment, down to minutes.
The main thing is not to forget that it is better to transfer money in the presence of witnesses who will confirm the transfer of the contribution and put their signatures on the receipt.
The agreed amount must be handed over only to the owner of the property or a person who is authorized to act on his behalf under a notarized power of attorney. Transferring money through an intermediary, even if it is an agent of a well-known company, is unacceptable; a realtor can only provide assistance in preparing documentation, but you must pay and take a receipt in person.
In essence, collateral and deposit are one and the same thing. Information about the deposit is indicated in the contract as a separate clause. It is also important to clearly state the purpose of the amount contributed by the tenant.
The document must clearly state that if the tenant leaves the apartment in its original condition, the money will be returned.
How to arrange payment of a deposit when renting a home
Information about the pledge must be reflected in the agreement and receipt for receipt of money. Let's look at the design features of both documents.
A receipt is the only document confirming the fact of transfer of money. The lease agreement does not confirm this!
Registration of a lease agreement with a deposit
The tenant should carefully study the documents so as not to fall for scammers. It is important to carefully read the transfer and acceptance certificate and the lease agreement.
Information about the deposit is usually written in the “Terms of Payment” section of the agreement. It is important that the text contains the following points:
- the impossibility of using the deposit amount by the owner for personal purposes - the money must be kept in free access so that the tenant can receive it at any time if he terminates the contract;
- information about in which cases the deposit is not returned to the tenant - in such situations, the insurance amount is used to cover damage caused or to pay rent;
- a description of the procedure for accepting an apartment after the expiration of the lease agreement.
The owner accepts the living space back based on the execution of a return certificate. This document is the main document confirming the absence of claims from the property owner.
The rental agreement may include a clause stating that if the tenant stays for less than 11 months, the security deposit will not be refunded. This protects the owner from an unplanned search for a new tenant. Whether such an item is acceptable or not is decided on an individual basis.
Registration of receipt
The lease agreement in no way replaces the receipt. Only this document confirms the fact of transfer of the deposit.
The subject of the receipt is money. They are written in the text in numbers and words. In addition, the text must contain the conditions, rights and obligations of the parties, and a warning about early termination of the relationship.
A separate paragraph must indicate whether the mortgagee can compensate for possible losses using the transferred amount if they arise during the stay. In addition, information is provided regarding the return of the security deposit in full if the terms of the rental agreement are met.
The receipt is sealed with the signatures of the parties. This is a legally significant document that can be used in court to confirm circumstances or the rightness of one of the parties.
The receipt must include the following information:
- information that one party transferred funds and the other received them;
- identification data of the parties according to the passport;
- the amount of funds transferred;
- date of registration.
The deposit can be paid in installments. In other words, the amount is divided into several months. In this case, a receipt is drawn up for each part of the transferred funds.
Do not neglect the registration of the receipt. With its help you can save yourself from problems in the future.
How to reduce financial burden – installment deposit
If a preliminary agreement has been reached on all other issues, and the property owner likes the potential tenant, the property owner may agree to pay the deposit in installments - along with a monthly contribution. Of course, not every owner will do this (there are still risks)
however, if you convince the landlord of your integrity, you can at least try to negotiate this
(and be sure to record the result of your efforts in the contract)
.
Most often, the amount of the deposit is taken equal to the monthly payment, but this is not a mandatory rule - the landlord has the right to set it at his own discretion.
On the other hand, if you bargain and present compelling arguments, you can significantly reduce it.
If you follow all the rules specified in the agreement, keep the apartment clean and, as required, notify the owner a month in advance of your intention to leave the home, you can count on the return of the deposit or its “offset” in the form of the last monthly payment.
It should be noted that in case of large losses, the amount of the deposit may not be enough to cover them. But still, in addition to financial security, the deposit plays an important psychological role - it disciplines the tenant and forces him to treat the property more carefully and weigh his decisions if he wants to change his place of residence.
Families with children and pet lovers will have to put up with a full deposit requirement (for obvious reasons)
. Moreover, experts recommend that owners even increase it in such cases. It is highly not recommended to hide the fact that children and their four-legged friends will live in the living space in order to reduce the deposit.
False information is an ironclad reason for unilaterally breaking the contract, and then the deposit will not be returned for sure.
○ Actions in case of non-return of deposit or security deposit.
In all these cases, the lessor must return the money. But if he evades his obligations, he needs to know how to protect his rights. The course of action depends on the specific situation.
✔ If there is a lease agreement and receipt.
In this case, the tenant has the highest chance of returning the required money. The most extreme option is to go to court, which will most likely be on the plaintiff’s side. But if there is no possibility or desire to start a lawsuit, you can try to resolve the case pre-trial:
- Explain that if he goes to court, he will suffer more losses.
- If you suspect tax evasion, you can threaten to contact the tax office.
- Do not hand over the keys until the full amount has been received.
The transfer of the deposit and/or deposit prior to arrival must be confirmed by a receipt, which will be required to be presented in order to receive a refund. If it is not possible to resolve the case pre-trial, it is worth knowing the statute of limitations for filing a claim. Such a claim relates to general civil cases, and its statute of limitations is 3 years.
✔ If there is no lease agreement, but there is a receipt.
The receipt serves as proof that the funds were received by the counterparty. Therefore, even if a lease agreement has not been drawn up and signed, the owner of the apartment is obliged to comply with the legal requirements for the return of the security deposit or deposit amount.
In pre-trial proceedings, the issue can be resolved through negotiations. If there is no rental agreement, the likelihood that the owner of the property is hiding income from its rental is quite high. Therefore, you can try to explain to him that if he contacts the appropriate authorities, the amount of his damages will be significantly higher than the pledge or deposit.
If the case cannot be resolved pre-trial, you will have to turn to the courts. Among the evidence base for the illegality of the actions of the owner of the living space, the receipt occupies a fairly important place. The statute of limitations in this case is 3 years. The keys should not be given away until the issue is resolved.
✔ If there is no rental agreement and receipt.
In this case, the chances of getting the money back are the smallest, because there is no agreement regulating the rights of the tenant and a receipt confirming the fact of transfer of money. Most likely, going to court will not give a positive result due to the lack of evidence. Therefore, all the tenant can do is try to negotiate with the owner. A measure of influence could be the threat of going to the tax office, because most likely he does not submit taxes on rental income. There is no point in interfering with the police in this matter, because the effect may be the opposite. The tenant may be charged with trespassing on someone else's property without an agreement. You also cannot hold the keys, because due to the lack of an agreement and receipt, the tenant does not have the right to stay in the premises.
Therefore, if there are no evidentiary documents, the chances of returning the deposit or security deposit are zero.
Is it possible to do without collateral?
It is unlikely that you will be able to find housing without a deposit in a short period of time, but there are still 10%-20% of property owners on the market who are willing to take a risk and let guests in on their word of honor. In this case, however, most apartments rented without a security deposit do not have high-quality renovation and furniture. However, many tenants are looking for just such a very budget option, which, by the way, is very suitable for long-term rental for those who have their own furniture and who still make repairs before moving in.
If you try, you can rent out housing without collateral, equipped with everything you need, but for this you need to use all your diplomatic skills. If the contract is certified by a notary, and the information is recorded in Rosreestr, it is easier to reach an agreement on the absence of a contribution. In any case, you should describe the property and draw up an acceptance certificate.
○ How the deposit and collateral should be formalized.
Before transferring money, you need to make sure that there are no problems with its return in the future. To do this you need:
- Include in the contract a condition for making a deposit and/or a deposit.
- Transfer funds only with a receipt signed by the parties.
- Correctly carry out the reception/transfer of living space: Draw up an inventory of the property with a detailed list of what things and in what quantities are in the apartment.
- Draw up a transfer deed that records the actual condition of the property at the time of renting it out, and also indicates the data of all meters.
Such actions will help avoid conflicts when terminating the lease.
Pledge and deposit: consonant words with different meanings
When renting residential real estate for a long time for the first time, many people unknowingly equate the concepts of “deposit” and “deposit”, although these are fundamentally different types of contributions. A deposit is paid in cases where, for example, after much effort, the desired apartment has been found, but there is still no full amount for the first payment, or the execution of the contract and the move must be postponed for a while. In this case, a certain amount is transferred to the owner against receipt, which will serve as a guarantee that the potential tenant will not change his mind, and the apartment will be rented out within the agreed period and for the specified period.
The deposit agreement is a contractual document (appendix)
, where the amount is written down and the address of the property for which the rent is paid, as well as passport information about the tenant, must be indicated. Once the contract is signed within the agreed period, the deposit becomes part of the rent. If this does not happen due to the inability or unwillingness of the tenant to rent housing, the landlord has every right to keep the money for himself.
According to the law, if the owner finds guests who are ready to move in immediately and pay more, he is obliged to return the deposit in double amount.
To avoid problems and misunderstandings, all the nuances of financial obligations and settlements must be recorded in the contract.
Contact the local police officer
Most of the group members advise the girl to contact the police. “In such a situation, I called the police, even though this is a civil relationship, but it had an effect on our landlord. Police + my hysteria = return of the deposit,” says Liliya Mosyagina. “Call the police and explain the situation. Every call is recorded by the police. They will tell you what to do,” confirms Katerina Andreeva. “I didn’t have a written agreement, only a receipt for the deposit, which did not say that the deposit was returned or not returned. After calling the police and the chief of the local police station, the owner returned the deposit. She suggested it herself."
But if you do not have temporary registration, a fine threatens not only the hostess, but also you.
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The landlord does not return the deposit - what to do?
It happens that all the requirements are met, the owner is warned in time about the need to look for new tenants, but there is reason to believe that he is trying by all means to avoid returning the deposit. He makes unscheduled visits to the apartment, finds fault with the smallest stains and abrasions, proves that the toilet tank worked much more efficiently, and the washing machine now does not turn on the first time.
Without proper preparation, it is difficult to resist this, but it is still worth extracting the contract, calmly arguing your position and declaring your readiness to involve a lawyer and file a claim in court.
In order to stock up on facts and evidence, you should take the time to briefly describe the condition of the apartment in the contract, inspect the property very carefully and take photos of obvious flaws, and also ask the owner of the home to certify these photos with his signature. If, after moving in, something previously unnoticed comes to light, you should not remain silent, but call the owner of the property for additional negotiations and reach new agreements. With such a serious approach, getting the amount back will be much easier. In situations where the property is really damaged, unfortunately, you will have to say goodbye to the money.
Obvious improvements made by tenants that were not to the landlord's taste often become a stumbling block.
To avoid this, all repair work must be coordinated in advance, and when changing, for example, a door handle, be sure to keep the same one.
