Published:
Tell a deposit from a down payment
A down payment (DP) is part of the payment that secures a booking and is credited against the first rent invoice. A deposit is security for the condition of the unit and the tenant's obligations, and is returned when the tenancy ends, less any damage or unpaid obligations.
Agree the terms in writing
Before accepting payment, explain the amount, the purpose and the conditions for a refund. Also state what happens if the tenant cancels before moving in.
- The amount of the deposit and the DP
- The deadline to pay the DP
- Conditions that can reduce the deposit
- When and how it is returned
Record the unit condition on entry and exit
A record of the unit's condition at check-in and check-out is an objective basis for deciding deductions. Photos and a short note already help a great deal.
Calculate and record the refund
Calculate the refundable deposit with an itemised list of deductions, then record the method and reference of the refund. A recorded refund prevents disputes later.