What do you think about requiring a security deposit to rent your unit? Would it be a good solution to avoid failure to pay rent or to properly maintain the unit? Security deposits have been successful before…
It is a well-known fact that many tenants do not maintain their unit and leave it in poor condition when they move out. Others will intentionally forget to pay rent one or more times. The point is, landlords usually get the short end of the stick. Indeed, they rarely get reimbursed for these amounts due to loopholes in the system. A solution? Requiring a security deposit to sign the lease.
The Advantages of Security Deposits
Essentially, a security deposit offers many advantages to both parties. The owner could trust a questionable tenant more easily. The deposit would ensure that the landlord can pay for repairs or cover unpaid rent.
The tenant would have to be disciplined and have a financial cushion, which is always a good thing. Indeed, if the tenant cannot pay the deposit (a month’s worth of rent), it is unlikely that they will be able to see to their obligations for the next twelve months.
Of course, landlords are protected by some laws; however, these are very easy to circumvent. More often than not, tenants do not get penalized for their actions. Additionally, if the landlord goes to the Tribunal administratif du logement for a dispute, it can take up to two years to get justice. The security deposit acts as an insurance. If the tenant is disciplined, pays their rent on time, and maintains their unit, they will get their money back, so everybody wins.
In short, why shouldn’t you ask for a security deposit if it can only benefit you and your tenants? Every Canadian province has a law that allows landlords to ask for one (with a maximum amount), except for Québec. This method has worked well not only in Canada, but also around the world. The Québec government allowing them would benefit everyone in the real estate industry.