Security Deposit and Applications - Should You Accept Cash, Check or Money Order?Posted by Law Brennan on April 30th, 2021 If a landlord is looking to rent their investment property, they should always charge an application fee and a security deposit. The application fee is collected to cover the price of conducting a tenant criminal history check and a credit check. The security deposit is to pay for the cost of any damages the tenant does to the house. The biggest question that landlords ask is actually they should accept cash, check or money order for that application fee and the security deposit. Cash There is rarely anything wrong with accepting cash to the application fee. There is no problem with cash not being accepted anywhere. This financial resources are non-refundable anyway. Since it can be non-refundable then you don't have to give them a receipt for your application fee. It is probably not a bad idea to give the potential tenant a receipt anyway to demonstrate that you received the amount of money for that application fee. I would also recommend that you just get the protection deposit in cash also. Since this cash is potentially refundable on the tenant after they move out, I recommend that you just provide the tenant a receipt once you collect the security deposit. The best receipt books are the pre printed forms which you can get at stores like Office Depot. These receipt books have duplicates which allow you to offer the tenant the most notable copy and also you copy from the receipt stays with your receipt book. Money Order Money orders are universally acceptable. There is gitlab.e.foundation/gordon90gordon that your tenant might provide you with a fake money order. You need to be aware of this in case you accept money orders for that security deposit. You will not realize that it can be fake until following your tenant has moved into the property. Which is worse is how the bank will charge you a return check free to the fake money order that you just deposit into the checking account. Checks I could not accept a check for a software fee. The reason is that the check might be bad, the check could be stolen, or check may bounce. Unfortunately look at here now 'll not know this until you present the search for payment from the bank the place that the check was written. Just like a money order, the lender will charge you a fee for that returned check if it can be not good. If you accept a check in the application fee then you definitely tied to paying the price tag on the tenant criminal history check from the pocket in addition to the fee to the bad check. Smart landlords should always accept cash only for that application fee as well as the security deposit.Like it? Share it! More by this author |