TO RENT OR NOT TO RENT: THAT IS THE QUESTION

Many landlords and tenants today are faced with a game of tug-o-war when it comes to minimizing risk and asking and giving deposits and advance rent. With the economic crisis haunting consumers across the board, a lot of potential tenants have less-than-desirable credit worthiness to show a potential landlord that they will in fact pay their rent on time, so landlords are opting to ask for higher security deposits or more rent in advance (I have heard as much as six months worth of rent in advance plus security deposit). It is only fair that a landlord, who is putting most of the risk upfront (if a tenant stops paying rent and continues to occupy the property it may take up to 3 months for an eviction process to be completed, plus the time it may take the landlord to re-rent the property), has the option to protect itself. However, the only problem to the tenant in this case is not that they may not have the money to put upfront (I mean, not everyone these days has 3 to 6 or more moths worth of rent in the bank?)but that those funds are virtually unprotected. The Florida Landlord Tenant Act and most standard leases instruct the landlord to hold the security deposit and in some cases any advance rent in a separate bank account and in some cases even to post a surety bond against those funds, however, most landlords ignore or are unaware of this commitment they have made and spend the money elsewhere, typically in mortgage payments or improvements to the property. This is not only against the law, but in the event of a foreclosure, the bank who repossesses the property will not honor the terms of the lease and will not only have the tenant vacate the premises, but will not refund any money back to him, which means that if the landlord has in fact spent the money of security deposits and advance rent and is unable to refund it to the tenant, then the tenant has lost a significant amount of money and has to now go find a new place to live, where the new landlord may ask for security deposits and rent in advance. So, how do we end this tug-o-war and make it fair for both parties? if you are a tenant and you have the finds available but are just scared to lose it in the event the landlord is unable to fulfill the terms of the lease, then ask that the funds are held in an attorney's trust account or a real estate brokerage's escrow account, which are governed by the Florida Bar and FREC respectively.