Landlord Question and Answer Forum

Good Faith Deposit

I have a house I rent to college students. Currently there is a group of students wanting to rent it out for next school year 7/1/2011 to 6/30/2012 I want to have them sign the lease but won't be asking for the security deposit until about a month before the move in. I would like to ask them for a non refundable Good Faith deposit of say $500 which in turn will be part of the security deposit when the lease actually starts. Basically I want them to take the lease seriously. Does this sound right. Never rented this far in advance.

Wow, you are a very brave soul renting out to college students! I did that once, will NEVER make that mistake again! Anyway, you are only allowed to ask for a month and a half security deposit, I do not believe that you can have a non refundable deposit. If they had say a pet, then you could add on a non refundable pet fee monthly, but a good faith fee, I really do not believe so. I have a rental home in NJ also, and the law is pretty tight on security deposit issues. Best of luck to you, hope this helps.

Posted by Beth G, FL on Wednesday, September 08, 2010

The $500 would initially be a good faith deposit to hold the house for them. Before they move in i would ask for the additional $2000 a total of $2500 one months rent and put that into an escrow for the security deposit. I guess i am trying to figure out a way to get the Good Faith deposit from them to hold the house and if they back out they loose it. It's tough to get renters especially if they back out right before the school year starts. Should i make them sign a lease now or wait and make them sign something else saying i am holding it for them?

Posted by Steven L, NJ on Wednesday, September 08, 2010