What is a security deposit? It is a vital tool for a property or leasing manager when it comes to guarding their property. A tenant has a pay a pre-set amount of money before the commencement of the lease. It aids landlords when the tenant is not able to pay rent or inflicts damages to the property.
When the security deposits are not properly managed, it can lead to financial troubles for the landlord. Let us look at five ways you can manage them successfully and lead to overall better lease management:
Be Fully Aware of Laws on Security Deposits
Whether you’re a landlord or a leasing manager, you need to stay updated on how much security deposit you can charge your tenants. If you charge too much from a tenant, you will be accountable to return the amount or even more.
Properties in metropolitan cities such as Mumbai or Bengaluru used to demand amounts as much as you pay annually, such as the security deposit. However, it is important to note that the custom of charging exorbitant security deposits may now be curbed. The Draft Model Tenancy Act has now standardized it to assist the renters.
Keep Security Deposit Information in Lease Agreement
As a leasing manager, you need to ensure that all significant security deposit clauses and records are in the lease contract. In order for smooth lease management India, you need to include the amount of security deposit that the tenant has paid, the date of payment, the location where your deposit will be held, and confirmation that the deposit will be completely refunded, contingent upon the terms and conditions that the tenant needs to follow. Ensure that you have a discussion on every clause of the contract with your tenant for proper clarity.
Tenant Should Receive Security Deposit Receipt
If you offer a security deposit invoice to your tenant, it helps in maintaining a record of payment. To ensure a smooth lease administration process, the receipts need to include the amount of the security deposit, the contact details of the bank you would deposit the money, and the interest rate.
Time-Frame for Returning Deposit to Tenant
In India, landlords need to refund a tenant’s security deposit within a ‘reasonable time’ after the tenant has vacated the property. Generally, 21 to 45 days is deemed to be an adequate and sufficient time frame. Ensure that you follow all the rules and regulations so that you avoid any last-minute hassles. It is vital to conduct a thorough move-out inspection of the premises and document it.
When it comes to the security deposit in leasing, do try out the CRE Lease Matrix system. It is India’s most comprehensive lease management software that allows you to access and retrieve all the details of the security deposit in your leasing contract.
To know more, visit our website www.creleasematrix.com now.