What is a commission when renting an apartment: a sample rental agreement

Pravozhil.com > Rent > What is a deposit or security deposit when renting an apartment and why is it needed?

By renting out housing for temporary use, its owners are trying in every possible way to protect themselves from adverse consequences. That’s why it’s so important to know what a deposit is when renting an apartment.

After all, in addition to presenting requirements to potential residents and establishing rules of residence, it is worth consolidating the relationship on paper. Moreover, future residents need to be prepared to pay a security deposit (deposit) upon move-in. We will tell you later when and in what amount it is paid.

What is a deposit when renting an apartment, and why is it needed?

What is a security deposit when renting an apartment?

Despite the fact that all rented apartments and their owners are different, in practice there are certain rules for providing housing for rent. What does a deposit mean when renting an apartment? Upon moving in, residents are immediately charged for their accommodation for a month in advance.

Many people ask to pay the same amount as a security deposit. It is designed to compensate for possible expenses of the homeowner in case of damage to property by residents, failure by them to pay rent and utilities, or flooding of neighbors.

After all, there are many cases when residents move out without warning, leaving behind dirt, damaged things, and debts for utilities. Therefore, persons renting out real estate prefer to insure themselves in case of tenants’ dishonesty. In contracts, such payment is usually referred to as a security deposit or security deposit.

The legislation does not contain a specific rule providing for the payment of a deposit when renting housing. However, in fact, the payment of this amount ensures the fulfillment of the obligations existing when renting an apartment.

According to the Civil Code of the Russian Federation, when concluding a transaction, the parties have the right to independently choose the method of securing it. The Code provides for the possibility of one of the parties to a transaction making a security payment in favor of the other in the event of its violation, including in the future.

As a rule, in contracts, tenants undertake to ensure the safety of the home itself and the property located in it, pay for utilities, and pay rent. If they are not fulfilled, then such insurance, at least in part, will be able to reimburse the apartment owner for his costs.

What is the commission when renting or renting an apartment, its size and who pays

A real estate agent (realtor) is a specialist who deals with the purchase, sale or rental of real estate. Professional services help clients save time and find the most suitable apartment or house.

However, you have to pay for the services of an assistant. The size of the commission is individual in each case and depends on the characteristics of a particular agreement. What is a commission when renting (or renting) an apartment and how it is calculated, we will find out further.

The content of the article

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What does a commission mean when renting an apartment and its difference from a deposit?

What is a deposit and commission when renting an apartment? A commission is a monetary remuneration from an interested party to an intermediary. The conditions for it are specified in the contract for the provision of paid services.

The deposit is paid to the owner of the property as a guarantee of the good faith of the tenant. It is an insurance mechanism that guarantees the conclusion of a contract. Real estate agents do not receive any interest from the deposit.

When does it become necessary to pay a commission?

The housing tenant pays a commission to the intermediary for the following services provided by him:

selection of a suitable option taking into account the wishes of the employer;
consultation with a citizen regarding a particular residential property - the realtor provides a professional opinion about the apartment, draws attention to its positive and negative aspects;
conducting negotiations with the owner of the premises, discussing all the essential conditions and nuances - the deadline for completion, the amount of monthly payments, who bears the responsibility for repairs, and so on;
conclusion of a residential lease agreement. It must be drawn up in writing, in two copies.

In addition, the intermediary charges the landlord for advertising services - posting information about real estate on the Internet, on television, in print publications.

The intermediary’s competence also includes assessing the apartment or house and checking its technical condition. The realtor is obliged to check the apartment from a legal point of view: make sure that it is owned by the landlord, request all the necessary documents, for example, certificates of absence of debt on utility bills.

Important! In subsequent months, the tenant (tenant) pays directly to the owner of the property.

Who should pay the commission

The commission is paid by the tenant. It is in his interests to rent an apartment according to his requirements as soon as possible. This is the main task of a realtor - to provide suitable options for a specific person.

However, when it comes to expensive luxury housing, there are cases when the landlord pays the commission. Why is this happening? The fact is that he is interested in a decent and conscientious employer. And a real estate agency is a kind of guarantor that the citizen it finds meets these requirements.

There are cases when the payment of the commission is imposed on both parties at once. This happens when the counterparties have agreed on such a condition in advance. On the one hand, this is the surest way to divide expenses - the tenant is interested in a conscientious landlord, and the owner is interested in a decent tenant. On the other hand, sometimes it is very difficult to agree on such a condition with the opposing party.

The amount of the rental commission and the period for its payment

In each individual case, the size of the commission is individual. In practice, the fee ranges from 50 to 100% of the total monthly payment for the apartment. This figure also depends on the type of transaction being made - it takes into account what kind of agreement you are entering into, a lease or a lease.

Paying the commission is a one-time procedure. The agreement with the realtor specifies exactly when you must pay it. This can be either at the beginning of cooperation or after the real estate agent has selected an apartment for you.

The amount of the fee depends on several aspects:

Liquidity of the apartment. Here it is worth understanding the ratio of price and quality of the proposed living space. The higher the demand for square meters, the more expensive the supply. Consequently, the commission will be higher. Usually we are talking about middle class apartments. The commission amount in such cases is 70% or more.
Reputation of a realtor or real estate agency. If you contact a popular company, be prepared to pay a 100% commission. This is due to the fact that the company has already earned a name for itself and will provide you with the highest level of services. What cannot be said about unfamiliar private individuals - the amount of their remuneration (as well as the quality of the work performed) sometimes does not reach 50%.
If several realtors provide services to you at once, then here too you will have to pay the specialists 100% of the remuneration (perhaps they divide it among themselves in some ratio).

Important! The amount and procedure for paying the commission must be clearly stated in the contract for the provision of paid services. It is concluded between the employer (if he is responsible for paying the commission) and the realtor. The document must be drawn up in writing according to the number of parties. Typically, realtors draw up the contract themselves. It is he who regulates the relationship between the party and the agent.

Features of the rental agreement

A residential tenancy agreement is a common transaction. In Russia, residential premises can be rented or rented out only under a rental agreement, but not under a lease. Why is this worth paying attention to? It's simple: if, instead of renting, the parties enter into a lease agreement, then such an agreement may be declared invalid in court.

The features of the rental agreement are as follows:

Such an agreement can be concluded for either 3 months or 3 years. The maximum period is 5 years. If the counterparties have not indicated for what period they are concluding an agreement, then it is considered that the agreement is valid for exactly 5 years;
the provided living space must necessarily comply with the necessary requirements and standards;
in the employment agreement, the counterparty cannot be an entrepreneur;
it is possible to terminate the contract by notifying the opposing party 3 months in advance;
the tenant has the right to demand a reduction in rent if, for reasons beyond his control, living conditions have become worse;
if the tenant does not pay rent for 2 months in a row, the landlord has the right to terminate the agreement;
the obligation to pay utility bills rests with the tenant;
There is no need to register a rental agreement.

Realtor's responsibility

Regardless of who turns to a realtor for help (tenant or landlord), the real estate agent bears responsibility for performing certain actions.

The realtor will be held liable if the tenant violates the agreement and vacates before the deadline specified in the document. In this case, the agent is obliged to find a new employer. Or, for example, if at the last moment the owner refused to rent out the housing and the tenant remained on the street, the intermediary’s responsibilities include finding a new apartment.

The contract with the realtor must be drawn up correctly. The document specifies all the terms of cooperation, including the section on the responsibility of the realtor. The contract must be clear and understandable. Avoid documents that contain complex legal structures and an abundance of terms.

If for any reason the contract is terminated, the commission amount is not refunded. A tenant who is left without an apartment must contact the real estate agency again and once again pay for the services of an intermediary. Under one contract, you cannot constantly use the services of an agent.

Important! Real estate agents are not responsible for the relationship between the owner of the property and the tenant.

Conclusion

What is the commission when renting an apartment and how many times is it paid? This is a one-time fee that is paid to a specialist for selecting an apartment according to the client’s wishes. The agent's commission does not have a uniform amount. It all depends on the terms of the contract. It is better to discuss the amount of remuneration in advance.

In this case, the reward should be given only after you have received the keys to the apartment and signed the lease agreement. We do not recommend signing an agreement with intermediaries who demand their fees in advance. Before signing the paper, carefully read the provisions of the contract.

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Types of collateral

What types of security deposit are there?

The amount that apartment owners ask from tenants upon moving in is called differently. It is specified in the contract as a pledge, a security deposit, or a security deposit. However, in essence, they are the same thing.

These payments are designed to insure the owner of an apartment or house in case of damage to his property by tenants or other violation of the contract.

Sometimes a deposit is confused with a commission, which has a completely different nature. If renting a home is carried out through a real estate office, then they charge a certain fee for their services. It is called a commission.

Accordingly, a commission is paid to the realtor for the work he has done in selecting housing.

And deposit payments are made to the tenants (landlords) themselves in case of violation of the terms of the concluded agreement in the future. It may specify what exactly the deposit is taken for, for example, in case of damage to property and the apartment itself or failure to pay payments due under the contract.

However, the agreement may also contain general wording about providing this amount for possible losses of the property owner in case of violations committed by the residents.

Advantages and disadvantages of renting with a security deposit

The advantages of renting an apartment with a security deposit are beneficial, first of all, to the landlord, because:

you don’t have to worry about the safety of your property;
the risk of non-payment of utility bills by residents is prevented;
It is possible to stipulate in the contract a situation where the security deposit serves as payment for any obligations of the tenant.

For the tenant himself, paying a security deposit serves as a guarantee of comfortable living, but in the event of dishonesty of the owner and the absence of an inventory of the property, you can lose the deposit allegedly due to damage caused.

Since the current legislation does not define the concept of a “security deposit when renting an apartment,” disputes often arise about the legality of collecting a “security” deposit. Therefore, it is important to provide for a variety of possible situations in the contract.

Thus, a security deposit is often charged with the condition that it will be counted as payment for the last month of residence. In this case, the owner runs the risk of not being compensated for damage to property and the risk of facing non-payment of utility services.

Therefore, it is not advisable to include an insurance premium in the amount of rent, having a certain amount on hand after the tenants move out in case of utility arrears or property damage.

When concluding an apartment rental agreement, you must specify in it:

terms of payment of the security deposit;
method of receiving and transferring property;
tenant obligations;
procedure for compensation of damages;
deadlines for returning the security deposit at the end of the rental period or upon unilateral termination of the contract.

If the procedure for making and returning the security deposit is not specified in the contract, then if a controversial situation arises, it will be quite difficult for either party to prove that they are right.

Since the rental process is a risky business, those who are looking to make money on their own apartment are wise to use certain types of protection against potential damage or fraud.

READ MORE: How to register ownership of an apartment in a new building

A deposit when renting an apartment is one of the tools to compensate for possible material risks associated with real estate. We are talking about damage to property and the condition of the housing itself. In addition, in the event of sudden insolvency of the tenants, the security deposit will allow the landlord to avoid financial losses.

In most cases, the deposit when renting an apartment is equal to the amount of payment for accommodation for a month. But exceptions are possible. For example, tenants may be required to pay for several months (3-4) at once. If we consider the situation with luxury real estate that is rented out, then it makes sense to expect a requirement to pay the annual cost.

Some agencies take a slightly different approach to such a tool for compensating possible damages. We are talking about a scheme in which such a deposit is not considered as a security deposit or an advance payment for the last month of rent.

This money cannot be used to pay rent; its only purpose is to guarantee the financial security of the apartment owner in the event of damage to his property by tenants. Therefore, when understanding what a deposit is when renting an apartment, it is worth taking into account this approach to the rental process.

Refund of a deposit

The peculiarity of using the insurance amount when renting an apartment becomes clear at the end of the lease. When the last month of living in the apartment has been paid for, the owner takes over the real estate from the tenant, which means inspecting the condition of the housing and property in particular.

If any damage was discovered (furniture was damaged or repair questions arose), then a security deposit, which is kept by the apartment owner, is used to compensate for it. The remaining funds after payment of the damage are returned to the tenant. If there are no complaints, the owner gives the entire amount to the tenant.

If an agreement was used during the rental process, then there should be no problems with returning the deposit. Thus, in this situation, the deposit when renting an apartment can be considered as a security payment.

Initially, it is worth noting that the current legislation of the Russian Federation does not provide grounds for clearly defining the conditions for the return of the security deposit. For this reason, based on Article 329 of the Civil Code, both parties will have to independently determine what obligations the payment of the deposit will imply.

But if we apply the most common scheme that is used in contracts, then attention should be focused on the following points:

payment of rent that does not meet the established deadlines;
damage caused to property located in the apartment;
unilateral termination of the lease agreement without warning and before the end of the agreed period;
lack of payment for rent, telephone calls and utilities.

It is very important to make sure that the rental agreement for an apartment with a security deposit contains all the reasons why a security deposit may be withheld. It would be a good idea for the tenant to check the conditions for returning the security deposit.

It is advisable for each party to ensure that all their interests are respected. For example, if the apartment owner insists on stipulating the tenant's liability for early termination of the contract, the tenant, for his part, can demand the same from the property owner.

The issue of issuing a security payment must be resolved competently. Therefore, upon receipt of funds corresponding to the amount of the security deposit according to the agreement, the apartment owner must write a receipt stating that the money was transferred. This will save both the tenant and the homeowner from possible unpleasant nuances associated with paying the deposit.

The receipt itself must include the following information:

landlord's passport details;
the amount of the accepted payment;
date of transaction confirmation.

At the same time, considering what a deposit is when renting an apartment and what are the features of its registration, it is important to note the following fact: in some cases, the amount of the security payment may be divided into several months. If there was such an installment plan, then the party accepting the money needs to write a receipt for each paid part of the deposit.

Compliance with this format for concluding a transaction is important, since otherwise it will be difficult to prove anything in court.

It is important not only to know what a deposit is when renting an apartment, but also to be able to competently protect yourself from possible reasons for its non-refund. We are talking about claims from the owner of the apartment regarding damage to property. In order to avoid accusations that are not true, it is worth taking photographs of the state of repairs, equipment and furniture at the time of entry.

After photographs are taken and attached to the contract, they must be certified by signature from both parties. Thus, the main reason for a problem-free rental can be identified as the exclusion of potential controversial issues at the very beginning and at the contract level.

By the way, some owners of residential real estate cannot decide whether to include the amount of the security deposit in the income statement or not. According to many lawyers, this is not worth doing, since these funds are not payment for rent and are not used as income.

Possible difficulties

One common mistake on the part of the landlord is the intention to use the security deposit under the lease agreement as payment for the last month of the tenant's occupancy.

The risk in this situation is quite obvious: if a few days before the transfer of the apartment property is damaged or large telephone bills are discovered, the owner will not be able to compensate for the losses incurred.

Another point to consider is the normal wear and tear of property and renovations. Sometimes tenants are blamed for such changes, resulting in tense conflicts. But if you pay attention to the civil code, you will notice that the apartment owner has no right to demand financial compensation for natural wear and tear.

An example is the loss of color saturation of curtains (fading in the sun), which the renter had no influence on. But if, say, the curtains were damaged by the tenant's active pet, then in this case the claims against him will be fair.

This question is also relevant, since both parties may not have the same opinion regarding the cost of the damage caused. A striking example of such a situation is a refrigerator breakdown.

The owner of the apartment may require that this type of household appliance be completely replaced. The tenant, not agreeing with such a solution to the problem, is able to offer compensation for the cost of repairs.

Obviously, the difference in costs will be significant.

Therefore, it is advisable to indicate such points in the contract from the beginning.

Having figured out what a deposit is when renting an apartment, the owner should take into account the following principle: the amount of the security deposit should be returned only after receiving all bills, including telephone bills. Then it will be possible to objectively assess the presence of any losses.

If you neglect this rule, you may find yourself having to pay for long long-distance calls from former tenants.

Conclusion

A security deposit is used when renting real estate in virtually all civilized countries. This scheme has proven its practicality more than once. Therefore, it should not be neglected.

When renting an apartment or house, the owner may impose a condition on the payment of a security deposit.

Why is this necessary, how legal is this requirement, how to make the final settlement with the landlord?

READ MORE: Citizenship when purchasing real estate in 2020

What it is?

Most often, housing is offered to tenants with full furnishings - furniture, refrigerator, washing machine, TV, etc.

This service is very convenient for residents, especially if they are young people who have not had time to acquire property.

Are there any risks for the homeowner?

There are a lot of them, and here are the main risks:

Damage or loss of things;
Damage to expensive apartment repairs or plumbing;
Neighbors Bay;
Disappearance of tenants without making a full settlement with the owner;
Accumulation of unpaid utility bills, etc.

A security deposit is a certain amount that is paid by the tenants to the owner, as insurance, in case of unforeseen circumstances associated with the tenants, to cover material losses caused by careless tenants.

Deposit concept

Bail amount

Strictly speaking, there are no rules limiting the amount of security deposit paid to the landlord.
Therefore, he is free to indicate any amount that, in his opinion, may be sufficient to compensate for possible losses.

Of course, this amount should not be exorbitant. In current practice, apartment owners usually ask for a deposit in the amount of a month's rent.

Sometimes this amount can increase to two months' payment. The main thing is that its size is determined not in words, but in a written agreement. After all, unscrupulous landlords can change their minds. And residents who need an apartment urgently have to agree to new conditions that are not very favorable for themselves.

Therefore, it is in the interests of both parties to conclude an agreement that will reflect all the essential aspects of their relationship. In particular, you need to specify the amount of such deposit, the procedure for its payment and return.

What is a deposit when renting an apartment?

The deposit is needed to protect the rental property from any negative phenomena, such as damage to property, arrears of payment, etc. It is a kind of guarantee that all conditions stipulated in the contract will be fulfilled. This deposit has different names: security deposit, guarantee payment, last month's payment, security deposit.

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When the contract expires, it is terminated. The owner of the home checks the condition of the property and debts for payment. If everything is in order, the deposit is returned to the person who rented the property. But, if there are any breakdowns or debts for housing, electricity or telephone, the apartment owner deducts this amount from the deposit.

How to protect yourself from scammers?

When concluding housing rental transactions, certain risks are borne by both parties. Apartment owners often have to deal with unscrupulous, unscrupulous tenants.
They can damage the landlord's property, disturb neighbors, litter in the entrance, not pay rent and utilities, and let other tenants in.

Having received the keys to the apartment, some rent it out as owners to other people for a lot of money and disappear. And the property owner then has to resolve issues of eviction. On the other hand, tenants can also fall for unscrupulous landlords.

Expert opinion

Valiullova Antonina

Expert of the site pravozhil.com

Ask a Question

If you are still not confident in your own abilities in searching for rental housing, we advise you to seek help from professionals. A competent specialist, for a small fee, will help you find premises, and will also check the relevant lease agreement before signing with the owner or an authorized person.

In order to find a responsible and honest realtor, just search the Internet or ask friends and acquaintances for information. We advise potential tenants to take care of their planned rental property in advance and anticipate any negative consequences.

There are many fraudulent schemes in the rental housing industry. Sometimes living space is rented out by persons who are not at all the legal owners of the property.