Surety Bond Security Deposit
One option to make a security deposit is to get a surety bond instead. In the event that you do not pay your apartment rent or leave substantial damage to the property, your landlord or property manager will be reimbursed under the policy.
It is sometimes equated to having a co-signer on your rental agreement or having insurance on it. You will be able to move into your apartment with less money owing when you sign your lease since the surety bond serves as a substitute for the security deposit.
One significant distinction is that when you make a security deposit, you have the opportunity to get your money back (up to the whole one thousand dollars or whatever the sum is). The ten to forty dollars that you put down for a surety bond is money that you will never see again. The cash is not going to be returned.
Moreover, if your landlord files a claim against your security deposit, you may be required to pay the whole amount of the bond. All of them provide your landlord some kind of security, but one of them might wind up costing you more money in the long run.
A security deposit is money you provide to your landlord before you move in as insurance in case something goes wrong with the unit. If you destroy the place, break the lease, or do anything else that might put the landlord in jeopardy financially, this set amount of money (in this case, $1,000) is there to protect them.
If the security deposit is refundable, you may be eligible to recover up to $1,000 of it when you vacate the rental unit, provided that there is no damage to the unit and that the rent is paid in full.
A surety bond is an agreement that binds you, a surety company, and your landlord together. The agreement is made up of three parties: you, the surety business, and your landlord.
Getting a surety bond is, in essence, the same thing as having a surety business cosign for you in a financial transaction. In most cases, you will be required to pay between 1 and 4% of the entire bond amount, which is equal to $10 to $40.
If you breach the conditions of the lease in any way, destroy the rental property, or do anything else of the kind, your landlord has the right to lodge a claim against your security deposit. Your landlord may be entitled to receive up to $1,000 in compensation from the surety business if the claim is found to be legitimate. After then, the insurance firm would demand repayment from you for any money that they sent over to your landlord.
What Renters Should Know About Surety Bonds
- Costs and Contributions
Bonds that are sold by surety businesses often come with a minimum premium requirement, which is typically $100. While doing research on surety bond firms, it is important to keep in mind that some surety bond companies charge a one-time non-refundable cost, while others add lower fees to your monthly rent payment. You won’t have to pay any further costs when you move out of the apartment if there isn’t any excessive property damage when you vacate it.
- Renter Duties
Even if you utilize a surety bond to assist in paying the expenses of your first move-in, you are still responsible for all of the other responsibilities that come with being a renter. The surety bond does not absolve you of the customary duties of a tenant, such as keeping the property in good repair and making payments on time. It is important to keep in mind that the surety bond will cover the whole of your lease term.
- The Cost of a Surety Bond
Your surety bond premium could be affected by your credit score, just as it would be if you were asking for a loan or a mortgage. If your credit score is lower than normal, you should anticipate paying a higher premium for your surety bond than a tenant who has a credit score that is higher than average.
Frequently Asked Questions
Is a renter's surety bond acceptable by each and every apartment complex?
When I leave my apartment, do I receive my payment back?