While looking for a new place to move into, there may be millions of questions in your mind about the place, the environment, etc. But the most important questions might be surrounding the landlord, rent, and all the financial situations. This is a big part of adulthood, after all.
In general terms, landlords can ask for anything. So, they can ask for the first and last month plus security. The rule applies to most US states, with a few exceptions.
At first, understanding the different aspects behind this might not be an easy feat. It might be even more difficult to grasp, given that different states have different rules and regulations regarding the topic.
So, in this article, I have provided all the relevant information, with a few extra details. I would recommend reading the whole article to have better insight.
Is It Legal For A Landlord To Ask For The First And Last Month’s Rent Plus Security?
Before I dive into this topic further, I would like to clarify that different United States of America states have different rules regarding rental control and security deposits. So, make sure you check the laws of your state before making any decisions regarding these aspects.
Security deposit
To understand it all better, you should learn what a security deposit is. The first and last months’ rent is relatively self-explanatory. They are not interchangeable with the security deposit in any way.
Security deposits cover the repair costs of any damage or accidents in your apartment. It is tied to an equal amount of a month’s rent. Your landlord has the right to deduct money from the security deposit associated with any repair costs.
If you still have questions, the lease you will sign will further clarify how security deposits work. The primary function is to ensure that a tenant leaves the apartment undamaged and clean. There should be a set of working keys so that the landlord can rent the place to another tent quickly and easily.
Landlords are required by law to hold the security deposit in escrow. This way, you will have further protection, even more than that of having your private account.
Different States And Their Terms
Generally, landlords can ask for the first and last month’s rent. The security deposit they ask for must be equivalent to a month’s rent, giving them the money to buy and install locking systems and keys. It is mandatory for both the landlord and the tenant to agree for this to take place. Below are a few examples from a few states.
New Jersey: Although not usual, the security deposit can be used as last month’s rate in New Jersey. A contract must be established beforehand for this. Moreover, if the landlord somehow fails to comply with the rules associated with holding the security deposit, the tenant will automatically have the option.
California: Landlords can ask for security deposits or last month’s rent in California. They do so to prevent financial hits if tenants do not turn out to be reliable or responsible enough. Yet, this does not give landlords the right to layer on deposits.
According to California law, landlords can charge a security deposit twice the monthly rate for unfurnished units. For furnished units, the rate is three times the rent.
In addition, a security deposit, which is assigned as the last month’s rent, can be considered the tenant’s final rent payment. However, the landlord must agree to something like this in advance.
Colorado: It is entirely legal for landlords to make demands like these. In some cases, they can also ask for more. Your only options are to accept the terms or find a new place.
Exceptions
In the state of New York, landlords cannot ask you for the first and last month’s rent plus security as it is illegal to do so according to the new rent reforms. According to them, no advance or deposit can exceed the one-month time frame. In addition, landlords must now pay back the security deposit within 14 days of the tenancy’s termination.
The purpose of the law was to establish a sense of balance between tenants and landlords in New York. It will lower financial barriers for tenants, and those with no stable income or bad credit history might find it difficult to secure a place. Landlords will not be taking any risks, so those who do not meet their requirements will be rejected.
For landlords, the security deposits can make things a bit stressful. The 14-day period is said to be too short for assessments by many. Moreover, it can become difficult to shut down the escrow account where the security deposit is placed. Pricing out damage, if any, will become complex, as well.
Can You Pay 6 Months’ Rent In Advance?
In the United States, it is technically legal to ask for a 6-month advance, given who you are as a tenant and the time period that was initially settled. However, there might be alterations depending on the duration of your tenancy. A longer period implies more chances.
Furthermore, if you have a poor credit history, you may be required to pay a higher rent than other tenants. This is to prove to your landlord that you are a good tenant. You have to go the extra mile to earn their trust. Make sure you have a proper agreement beforehand. Proper documentation can avoid scams and future problems.
While it might be legal, you should not pay that far in advance if you are a tenant with a good or adequate credit history or financial stability. There have been cases where landlords did not have any right to a particular property. They can have it initially but can easily run away with your money.
You should also be aware that, in certain situations, such as land repairs or adjustments, the landlords would feel no inclination to immediately fix the issue or return your advanced payment to fix it.
Rent Conditions
To be more specific, a landlord might be willing to accept a 6-month advance only if you meet certain conditions. It helps them determine the severity of your condition. Then, they can decide on terms that are convenient for them. Below are some conditions that landlords take into consideration.
- You have money but do not have a proper and stable income.
- You are competing for a particular property and want to have an advantage over the other applicants.
- You have a bad or no credit history.
- You are a student, and paying the rent in advance might help with your budgeting and tuition fees in the future.
Can A Landlord Ask For 12 Months’ Rent In Advance?
It is usually unusual for landlords to ask for that much in advance. Yet they can do so, given your tenancy period and credit history. Remember that the laws regarding these are not the same in every state.
The landlords can even ask for an advance of 12-months based on the property and the accommodations the place offers. They should have client money protection in place if they demand such a huge sum. This is a guarantee that your money will be safe.
Furthermore, it will be considered a security if the advanced amount they ask for will be held as a buffer and not be assigned to the specific time period. Hence, it will be a deposit requiring protection.
Conclusion
I hope you are now clear about whether or not you can landlord ask for the first and last months’ rent plus security. As it turns out, landlords can ask for any advanced payment they like. It is their property. So, it makes sense to give them the freedom to choose how they want to monetize it.