Realty By JM

Salt and Light of Philippine Realty

2 Month Security Bond: What’s it for?

Recently, in my practice, I’ve been encountering landlords (real estate property owners having their property rented / leased out) not willing to have their property occupied if prospective tenants can’t issue post dated cheques.  During the old days, this was never an issue.  Now, for me, it appears to be a very big issue!  Is it because we can’t trust anyone who doesn’t have a checking account?  What if the prospect is a foreigner who recently arrived Manila?  Local banks will only allow individuals to have a current account once they have a six month savings account with them.

No one wants to be hassled or bothered nowadays.  No landlord wants to talk to their tenants on a monthly basis getting the rent payment anymore.  Wouldn’t it be better if landlords and tenants have more than a professional relationship?  Not having this personal relationship may be the reasons why some tenants don’t care whether or not they trash the leased premises.  I think that landlord – tenant personal relationship is especially beneficial if the leased premises are residential.  For commercial and other types of rentals, I won’t say the same.  For, after all, it is a business transaction.

If prospective tenants are willing to pay a two month security deposit and two month advance (a month more than the standard), in cash, wouldn’t this prove they can afford to pay monthly?  Sometimes I wonder if landlords really want their property rented out!  Owners with a year old vacancy, wouldn’t you want to convert your liability in to an asset?  Just in case a tenant defaults in payment, isn’t this the reason why we ask for advance and security bond payments?  Why not loosen up?

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