SECURITY DEPOSIT AND ADVANCE RENT

• IMPORTANT!
  Security Deposits and Advance Rents are only paid in CASH OR BANK TRANSFER. PDCs are not allowed as it can also bounce when not funded properly. Both of these are settled upon contract signing AND PRIOR TO MOVE IN. Both Security Deposits and Advance Rental Payments MUST NOT BE PAID AFTER MOVE IN.​

Security Deposit

The security deposit is a sum of money paid by the lessee to the lessor as a form of insurance against damages or unpaid bills. The amount of the security deposit is typically two month's rent, but it can be higher, or lower, depends on the unit owner. The security deposit is held by the lessor and is refunded to the lessee within 30 days of vacating the leased premises, less the cost of any loss, damages, or unsettled obligations.

The security deposit cannot be applied to rental payments. This means that the lessee must pay the rent in full each month, even if the security deposit is still held by the lessor.

 Normal wear and tear is an inherent consequence of the ordinary use of the leased premises and is not considered damage caused by the lessee. Therefore, the lessor shall not withhold any portion of the security deposit to cover the cost of normal wear and tear.

Non-Refundable Advance Rent

The non-refundable advance rent is a sum of money paid by the lessee to the lessor that is applied as rent for a specific month of the lease term. The amount of the non-refundable advance rent is two month's rent, but it can be higher, or lower, depends on the unit owner. The non-refundable advance rent is not refunded to the lessee at the end of the lease term.

The purpose of the non-refundable advance rent is to give the lessor some extra security in case the lessee defaults on their rent payments. It is also a way for the lessor to collect some of the rent upfront, which can help to improve their cash flow.

As a default, the advance rent is applied to the first months that it covers. In this case, the monthly rental payments are paid at the beginning of each coverage period - pay-then-live model. On the other hand, if the advance rent is rolled over and applied to the last months that it covers, the monthly rental payments are paid at the end of each coverage period - live-then-pay model.

Key Differences

The key difference between the security deposit and the non-refundable advance rent is that the security deposit is refundable, while the non-refundable advance rent is not. The security deposit is also used to cover any loss, damages, or unsettled obligations, while the non-refundable advance rent is simply applied as rent for a specific month of the lease term.