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34222 Views 70 Replies Latest reply: Mar 7, 2014 7:34 PM by spoonbill RSS Branched to a new discussion.
New Member 1 posts since
Dec 12, 2010
Currently Being Moderated

Dec 12, 2010 9:30 AM

Security Deposit vs. Damage Insurance

I have several clients inquiring about which route they should go.  I know from my experience as a vacationer, I love the option of Damage Insurance so I don't have to outlay extra money for a security deposit or have my credit card billed.

 

I always the the rentals in amazing shape, but for those of you that use damage insurance and have incurred damage, what has your experience been with recovering funds for the damage?

 

Best,

Cree

  • Contributor 25 posts since
    Dec 10, 2010
    Currently Being Moderated
    Dec 16, 2010 10:12 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    There is a first time for everything but, I have never experienced any major damage. The worst has been when a dog chewed up a $39.00 throw rug. Of course, there have been a few broken glasses but, glasses break and that goes under normal wear and tear.

    My experience has been so good that I have lowered my deposit from a maximum of $375.00 to $250.00, otherwise it is equal to half of the rent. I do not charge returning guests a deposit.

    After reading the claim process, it looks like a whole lot of work, and expense, for something that is just not necessary. I do restrict my rentals to people over 25 so, that eliminates college kids and their immaturity and naivete.

  • New Member 2 posts since
    Dec 17, 2010
    Currently Being Moderated
    Dec 17, 2010 7:22 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I charge a $400 refundable damage deposit.  I have never had a problem with it.  On the 3 occasions where we had real damage over the past 3 years the renters called me immediately and clearly felt bad about the damage.  We worked out an appropriate fee to cover the damage.  In the end, the renter felt good about the amount I charged them.  I don't charge repeat guests the fee.

  • Currently Being Moderated
    Jan 1, 2011 8:39 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    Hi Cree,

    I require a $400 reservation deposit within one week of their making the reservation and the rent in full six weeks prior to their stay.  This reservation deposit turns into a damage deposit during their stay and is promptly returned to them after they leave and the rental is checked for damages/missing items.  So far I have not had any damage/missing items for which I had to hold any of the deposit.  For return renters who have not caused any damage during past stays, I am considering reducing or eliminating the damage deposit and instead require a $400 reservation deposit that is put towards the rent payment.  I allow up to two dogs, so I would still collect a damage deposit for those with pets.  I would be interested in hearing from others how you deal with reservation deposits, damage deposits, pet deposits, rent payments and payment schedules. 

  • sfvacationhut Community All-Star 643 posts since
    Dec 31, 2010
    Currently Being Moderated
    Jan 2, 2011 12:34 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    We require a $250 reservation / security deposit.

     

    I have received the e-mail messages from HomeAway advertising the convenience of having the guests pay for Property Damage Protection, in lieu of charging and needing to refund a large security deposit.

     

    Here's a link to the information.

     

    http://www.propertydamageprotection.com/

     

    I've looked into it, and thought about it,and it certainly looks tempting. 

     

    BUT: I've decided to stick with our policy of collecting and refunding security deposits. 

     

    Here are my thoughts.  I believe our guest apartment has been left in good shape after each guest is because of two reasons:

     

    (1) the screening process, which helps us rent to people we can trust,

     

    and

     

    (2) the guest's feeling of "Oh, I better leave everything in good shape, because I want to get the full amount of my security deposit back."

     

    I don't think people would be so conscientious about following all of the rules upon check-out (such as not leaving dirty dishes) if they didn't THINK that we might deduct money from the security deposit, for not complying.

     

    I don't know why, but the psychological motivation for "wanting to get the full amount of their refund" is very high. I know that from my own experience, working so hard to get all the money back from my security deposit, upon moving out of various apartments I have lived in. 

     

    So that's why (up to now), I've decided NOT to offer guests the option of buying damage insurance. Even though it would be super convenient.  I just don't want to take away the guests' motivation to leave everything clean and intact upon their departure. 

     

    If anybody has found a work-around for this psychological factor, let me know. 

    • eric.mueller New Member 9 posts since
      Apr 6, 2011
      Currently Being Moderated
      Apr 6, 2011 10:42 AM (in response to sfvacationhut)
      Security Deposit vs. Damage Insurance

      As I mentioned below in the thread-- EXACTLY my position, too. I love the product but the psychological reasoning behind a deposit helps keep guests on their toes ;-) Let me know if you figure out a way to solve this issue.

       

      Eric

      http://LosAngelesHolidayRental.com

    • New Member 1 posts since
      Aug 8, 2011
      Currently Being Moderated
      Aug 8, 2011 8:34 AM (in response to sfvacationhut)
      Security Deposit vs. Damage Insurance

      I agree with your psychological premise, and I think I may have found a way to use the insurance and still activate some accountability. 

      I have a clause stating damage insurance is included with the rental and I don't require any additional funds for security/damage.  However, if damage is found, they will be billed a minimum $100 processing fee; and large items missing or damaged, i.e. electronics, furniture, will be billed at full replacement cost. 

      As others have indicated, in 10 years of renting, I have only had to keep security three times.  I'm counting on this continuing.  In the meantime, I can lower the upfront costs of my guests and eliminate all the refunding back and forth with the security deposits.

  • tyann Contributor 223 posts since
    Dec 28, 2010
    Currently Being Moderated
    Jan 3, 2011 3:48 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    For rental deposit, I put the cleaning fee on their credit card as soon as they book. This is a nonrefundable amount in case of cancellation. Then they must send 1/2 the rate amount by check within 2 weeks and balance 45 days before arrival.

     

    For security/damage deposit, I hang onto the credit card info. I have only had to charge a guest once for damage, and that was children jumping on a sofa sleeper and breaking it. Other damages like glasses breaking I let go under normal wear and tear like the above poster. Guests have called about breaking small items, but unless it's more than $50, I don't worry about it.

     

    You can see my full policies at http://www.vacationhomeinbranson.com/policies.html. If there is a cancellation, they can always apply the nonrefundable amount to another stay within a year of the originally scheduled dates, and that really helps to ease the guests' minds about cancelling. Even if they never actually rebook, they feel like they haven't lost it at the time of cancellation.

  • New Member 7 posts since
    Jan 26, 2011
    Currently Being Moderated
    Jan 26, 2011 9:21 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I have a bit of experience with both sides of this coin.  When my cabin was managed by a rental agency, they required a damage waiver.  Since taking over the management myself, I require a damage deposit instead.

     

    Our home was rented through the agency for 6 months.  During that time we had three different damage claims, with a combined total of over $800 in damages.  We have listed it ourselves for 6 months now and we've had a few darts broken and part of a board game broken - obviously all just normal wear and tear.  Quite a difference wouldn't you say?!

     

    I know that a big part of the difference lies in the screening process, but I have to agree with the previous poster that cited guest concerns with receiving their deposit refund.  I think people really pay attention to that.  I know that every person I talk to in the initial stages of the whole process wants to know when they can expect to receive that refund.  I can't imagine ever considering a damage waiver after the experiences I've had.

  • Contributor 24 posts since
    Jan 20, 2011
    Currently Being Moderated
    Jan 30, 2011 1:51 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    for our condo at the beach,   we require a 300  refundable security deposit for the 2011 rental season-     last year it was 250-    our 800 iron and glass coffee table was broken-   somehow they broke the iron leg off of the table but were able to stick it back in place to appear normal.......the maids found it 2 renters later-     all possible parties denied breaking the table  so we were at a loss    lol

     

    the new coffee table is iron and slate-    hopefully it will last for us  -

     

    we had an owners weekend stay  between some guests-    found a bucket of sand on balcony 1/2 full of sand with rest of the sand all over balcony and inside our condo.     it took the maids vacuuming over and over to get it all up/  out of the leather sofa etc.......

    we charged them 150 more  for the extra clean time-   

     

    hopefully the desire to get that 300 back will help guests take care of our condo during their stay - 

  • New Member 1 posts since
    Feb 24, 2011
    Currently Being Moderated
    Feb 24, 2011 9:25 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I've had vacation rentals at the beach for many years and have only had to keep the $200 reservation/damage deposit on one occasion. This was a broken mirrored closet door, and there was no doubt about which renter was responsible. Even just $200 is a very clear incentive for guests to leave our place clean and in good shape.

     

    I do suggest adding to the contract that the person signing is over 21 and is also going to be one of the occupants. I learned this the hard way, when a father rented it for his son and friends without telling me that the parent was not going to be there. The place was left a mess ,but the son swore to the father that it was clean. I don't know how an insurance company would deal with as a claim for the extra cost of cleaning.

  • New Member 6 posts since
    Feb 24, 2011
    Currently Being Moderated
    Feb 24, 2011 12:46 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    As cited above, a big problem with damage insurance is that it creates a sense of unaccountability.  A guest who has left a deposit has a stake in taking good care of the property.  A guest who is insured does not.  If I had a potential guest request insurance instead of a deposit, I would be leery.

     

    Another problem is that the limits are too low ($1,500 to $5,000) and the price is too high. In my case it is better to insure the whole house and factor that into the rental rate.

     

    We take a $500 deposit check on arrival which we do not cash unless there is a problem. In four years we have had three incidents of damage that required repair, same renter all three times.  The deposit covered repairs.

  • eric.mueller New Member 9 posts since
    Apr 6, 2011
    Currently Being Moderated
    Apr 6, 2011 10:35 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I'm right there with you - I LOVE the idea of the insurance (and what a great marketing tool: "No security deposit required!") but I'm afraid that it removes the powerful incentive for people to treat the property well, since they want their refundable security deposit back in their pocket. For now I'm probably going to stick with the refundable deposit because of this psychological reason, but I'd love to figure out a way to still create that motivation to keep the property nice yet be able to offer the insurance. I think a one-time payment is easier and cleaner and I love the idea of not having to track and issue refunds.

  • New Member 1 posts since
    May 25, 2011
    Currently Being Moderated
    May 26, 2011 10:02 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I was charging a $500 Security Deposit, but recently started doing both purchasing Damage Protection Insurance (which the renter pays for) and charging a Security Deposit, only difference is I reduced the amount of the deposit to $200. The insurance is not going to cover extra cleaning due to the house being left in a mess, so the deposit will take care of that. This is what the insurance company suggested and said a lot of owner's were choosing this method.

  • meredith HomeAway Employee 384 posts since
    Nov 18, 2010
    Currently Being Moderated
    May 27, 2011 10:30 AM (in response to tmg)
    Security Deposit vs. Damage Insurance

    Dear all,

     

    I was interested in your discussion about guests' lack of accountability without a deposit.

    Our research shows no evidence that guests are more likely to cause damage with insurance as opposed to a deposit. Without being too salesy I wanted to point you to a brief article on Property Damage Protection, in case you were interested in going that route.

     

    Meredith

    • rjl New Member 1 posts since
      Mar 7, 2014
      Currently Being Moderated
      Mar 7, 2014 3:46 PM (in response to meredith)
      Re: Security Deposit vs. Damage Insurance

      Sorry to be blunt, but I dont believe your "research"... In my less than humble opinion your promoting Damage Insurance rather than requiring a sizable Damage Deposit is a terrible idea and damaging to our business.

       

      I've been renting multiple homes in the greater NY area for many years and can tell you that it is 100% necessary to have a sizable Security/Damage Deposit that will cover damages and extra cleaning costs as a way to pressure renters to behave and police their guests to follow the rules and stay in control... and to scare away the "Partiers" who know they're going to get crazy.

       

      The issue is as much or more about Deterrence as it is Repair Costs... I often have back to back rentals on the same day and cannot afford damages and extra cleaning time caused by unruly renters. One group checks out at noon and my next group arrive at 4... The house needs to be cleaned and sheets & towels laundered, etc... I have no time for damages and my cleaners have no time for dirty pots & pans.

       

      If someone knocks over the great room flat screen TV or puts a hole in a wall, or creates a big mess in the yard your Damage insurance doesn't help me get things right it in time for my next guests... But by requiring a sizable Damage Deposit I scare away many undesirable renters and make sure that the renters I do have follow the rules and stay in control.

       

      I require a $750 cash DD from everyone, even my repeaters who've rented the same week for the past 4 years... If anyone ever questions the amount i politely tell them that they are renting a million dollar house and that their DD hardly even covers the cost of one of my flat screen TV's and it helps guarantee that the renters before them left the house in great condition just like i know they will.... FYI: I'm already booked out every day from June into September a year in advance and have half my summer 2015 booked up

       

      Regarding Damage Insurance, I have a Landlords Policy with a $1000 deductable that will pay for damages above and beyond the norm... Thankfully I've never had to use it. However, I have had some occasions when I've held back sizable amounts and even the whole $750.

       

      Regards,

      RJL

      • spoonbill Contributor 105 posts since
        Feb 24, 2011
        Currently Being Moderated
        Mar 7, 2014 7:34 PM (in response to rjl)
        Re: Security Deposit vs. Damage Insurance

        I have tried it both ways and now only do damage deposits.  For a while, I was selling the Travel Guard policy; however, once HA started selling it they dropped all of us small owner/vendors.  In any case, I found that once you made more than one claim they started not wanting your business.  Since the guests had no incentive to not damage things, claims did arise.  Then I was stuck with all of the work.  Damage deposits are far more effective and I have not had to charge a guest once for damage.  With insurance, I had guests swearing they hadn't vomitted all over the carpet and bedding even though the cleaning service I trust was telling me other wise and sending me photos.  Then I had to hassle with the insurance company.  DEFINITELY NOT A GOOD DEAL. 

  • debi Contributor 38 posts since
    Feb 24, 2011
    Currently Being Moderated
    Aug 1, 2011 3:16 PM (in response to tmg)
    Security Deposit vs. Damage Insurance

    I have been researching this topic because we've been contacted by a number of parties wanting to use our property for weddings and receptions.  The CSA insurance policy seemed the best way to go.  I am considering doing this in addition to levying a hefty damage/cleaning deposit.

     

    In reading over the exclusions - those things not covered  by the insurance policy - and confirmed by a phone call, damage done by intoxicated individuals will NOT be covered.  That's an instant loophole and bells of warning are going off. 

     

    Now I'm not sure that I will allow weddings or receptions after all.  This may be way more than I want to wade through.  Does anyone have experience with this type of thing?

     

    Debi

  • crescentbeach4u Community All-Star 865 posts since
    Sep 10, 2011
    Currently Being Moderated
    Apr 9, 2012 6:07 AM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    I would like to use VRBO PDP for stuff that is actually covered and also use a security deposit for the things that PDP does not cover so could the coders put an "add" section under the PDP area to be able to add things instead of duplicating.  Security Deposit.png

  • New Member 1 posts since
    May 3, 2012
    Currently Being Moderated
    May 3, 2012 1:49 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

      I agree with most of the writers: a damage deposit is more of a defense against damages than insurance.  We ask for a $500 damage deposit, refundable when our cleaners find nothing amiss, and the key is returned.  Last season, we rented to a group of college students, and asked for a $900 damage deposit.  The house was left in fine shape.  We cash the check, and send one out afterwards.  We don't like to take credit cards after one renter destroyed our garbage bin, and then challenged the charge.  We won in the end, but it was a hassle.

  • iopbeachhouse Community All-Star 455 posts since
    Aug 10, 2011
    Currently Being Moderated
    May 3, 2012 5:57 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    We had constant damage and theft when using damage insurance. At the time, we were using a management company.  We were so discouraged. As soon as we took over management ourselve and started taking a $500 security deposit for most rentals, $1000 for renters having a majoy event at the house, we stopped having trouble. I haven't had to keep a single deposit.

    • victor.nawrocki Contributor 87 posts since
      May 21, 2011
      Currently Being Moderated
      May 4, 2012 5:34 AM (in response to iopbeachhouse)
      Re: Security Deposit vs. Damage Insurance

      I wish I had not taken my first DAMAGE DEPOSIT yesterday - until I read this.  I have an extreme lack of trust of HA's internal market research (noted above).  Their results  always seems to fly in the face of logic.  And more to, "Hmm, we need to make money off this insurance (or input your noun) how can we prove it."  The fact is the insurance does not cover malicilous damage, theft and misrpesentation (20 people show up not 8). WHen it does I will use it every booking.

      • msdebj Senior Contributor 1,362 posts since
        May 25, 2011
        Currently Being Moderated
        May 4, 2012 12:57 PM (in response to victor.nawrocki)
        Re: Security Deposit vs. Damage Insurance

        Can someone clarify this for me?  As I understand it, the Damage Protection insurance requires that the renter participate in the disclosure of the damage incurred. Is this correct?

         

        If so, I guess I'm missing the reason for having it INSTEAD of collecting a damage deposit.

         

        Regardless of what any poll says, I'm sticking with collecting a DD.  I didn't spend al those years in college getting degrees in the social sciences for nothing. ;-) There's no  better deterrent to 'bad" behavior than the threat of loosing real $$ or status.

        Debj

        • anja Senior Contributor 1,560 posts since
          Aug 9, 2011
          Currently Being Moderated
          May 7, 2012 11:26 PM (in response to msdebj)
          Re: Security Deposit vs. Damage Insurance

          Hi msdebj,

          As no users of the 'damage insurance' responded to you, I'll contribute what I *believe*, based on previous posts here over the past few months.  I believe that you are correct in your understanding. This is what I believe is how this works:

           

          1.  the guest can purchase the 'damage insurance', instead of paying the owner a "refundable damage fee". The guest then has to raise a claim if/when they {admit to} cause damage.

           

          2.  the owner can purchase the 'damage insurance'  *in the name of the guest*...owner pays for it.   The owner then has to get the agreement of their guest to cooperate in filing a claim for damage {the guest has to admit to causing the damage}.

           

          I have never used the damage insurance offered so I'm not qualified to offer more than that. If I am wrong about the above, hopefully someone with experience  will correct me.  But, what would be more interesting would be for someone who does use it, either way {Point 1 or 2}  informs how it's working for them.

           

          Personally, my own system feels right for me, so I'm not looking to be persuaded into using the damage insurance. But, if I were to try it out, I'd probably go for Point 2., and get my guests to work with me --- adding it to my contract --- stating that they would "cooperate = admitting to damage and assisting in filing".  I hesistate asking guests to buy the insurance for themselves. Some will not want to. Then,  I'd have to decide whether to book them, or not.  And, I'm not keen on  raising my rate to include the insurance premium.

           

          Still, if the guests is "damage insured",  I can imagine that an owner could be confronted with guests who want to "save face" and not admit to breaking anything.

           

          In any event, I am of the mindset that the guests who have damage insurance coverage will care less for my concerns {my property}.  It's not exactly the same situation, but  I recently had a woman cancel a long-planned vacation she invested thousands of dollars in, at the very last moment {e.g. day before arrival} for a seemingly minor "medical" reason ...and she told me she could do it easily because she had travel insurance.  "So, why not use it!", she said.   The insurance gave her more "liberty" to cancel at the last minute. The damage insurance could have the same psychological effect -- more liberty and less worry about -my stuff!   If we break anything, oh well.... the owner is insured.

           

          My opinion:  I believe that, based on my own experience, rarely will anyone admit to damaging anything of any significance.  Most guests, in my experience, check out ...saying NOTHING of damages they did. Fortunately, they were not "costly" ones, but nevertheless the guests were "hard" on my inventory.  I've only had two sets of guests inform me, before they checked out, that they broke something (minor glass breakage).  Most damages are "discovered" by us. Some are even "hidden" away.  Someone "glued" a handle back on a cup - which broke again when another guest used it {we didn't know}....and another recently crazy-glued "up-side-down" a wall knob/switch back on for a ceiling fan.  All guests leave w/o saying anything -- even tho they signed a rental agreement with a stipulation about telling us, in good time, that something broke so we can replace/repair, immediately, for them (!)...and guests coming after them.   The last damage was a month ago:  woman tells me she's going to the nail spa the day before checking out, because she has to go straight back to work, next day, and she wanted to look her best at work after 2 weeks of rugged activity here.  Next day, she knocks on our door to tell us that she'll be leaving within the hour {she was quite sweet as a guest}.  My husband and I pop over a couple of minutes later and she already took off.  We go inside, and at first glance everything looked fine. Then, as we start to clean,  I'm shocked to find a huge area in the bathroom "darkened" all over the floor --- about 2 square feet -- we have a travertine [stone] bathroom.  The stone was stained "dark brownish red"...it was bad.   The woman "dyed" her hair...and apparently dropped the bottle.  She did a lousy job of trying to clean it up...spreading the dye further and further around.  It dried a reddish-brown stain.   Then, she put the bath carpet over the stained area  {did she think we would'nt notice?}!

           

          We scrubbed and succeeded in getting the stained area cleaned....and then reapplied the stone sealer.  I repainted one side of a wall, same day, that had splashes of dye on it that I could not get entirely cleaned off.  What's the matter with people?!  They do this in someone else's house....and just leave!  No note left.  {I guessed that it was hair dye -- and then found the box in the trash.}  No apology. She had no idea whether the stain would be permanent, or costly to repair...but she said nothing to us...so we wondered if she thought that we were "insured", perhaps, for damages?

          That's no excuse.   That's pure bad etiquette!!  She  will not be welcomed back to our home ...even tho she was a "polite, sweet" person.  Real nice people do  not mess up someone's home ...and sneek away!

          • thale HomeAway Employee 136 posts since
            Oct 27, 2010
            Currently Being Moderated
            May 7, 2012 5:28 PM (in response to anja)
            Re: Security Deposit vs. Damage Insurance

            Hi there:

             

            Reservation manager enables you to have both security deposits *and* property damage protection. This enables the deterrent of holding a security deposit and the choice of filing a claim should something get broken by accident. Accidents do happen, and having both enables you to insure small claims (say < $100) using damge protection, and can still keep your traveler happy by refunding the total deposit. And if something really bad does happen the owner has both the immediate cash in the deposit *and* the insurance (which can go up $1500) if you need it (which I hope you never do).

             

            Since the traveler pays for the property damange protection there's no cost to the owner - just more protection.

             

            What do you guys think about that?

             

            tom

            • thaxterlane Active Contributor 786 posts since
              Jul 27, 2011
              Currently Being Moderated
              Jul 2, 2012 12:06 PM (in response to thale)
              Re: Security Deposit vs. Damage Insurance

              Thale, there is something about keeping the customer happy without their accepting responsibility for their actions that doesn't make sense as a long-term strategy for owners.

               

              If a renter damages a property the security deposit should be used to cover the cost of righting the situation.  By purchasing an insurance product and submitting a claim on their own, the owner negates the effectiveness of the security deposit.

               

              Your phrasing,  " . . . can still keep your traveler happy by refunding the total deposit.  . " is absolving travelers from any responsibility for their actions.  If there are damages the security deposit should be charged for the cost of repairing the situation.  Absolving the traveler of responsibility in a misguided attempt to promote "happiness" simply allows travelers to continue whatever behaviors might have led to the problem.  This obviously does not apply to true accidents, but much of the problems owners describe in the forum appear to be due to irresponsible or disrespectful behaviors, and are not truly accidental.

               

              Why promote such poor behaviors by shielding the traveler from the consequences of their behaviors? 

               

              In the real world, you break it, you pay for it, non?  Why are rental damages different?

               

              I'll not look forward to having this traveler stay in my house.  I expect my guests to act responsibly.  The purchase of an insurance product that fixes problems without the involvement of the traveler is not appropriate.  It simply allows poor behaviors to continue.

               

              I understand owners are wary of wthholding funds for damages, but it is part of being a responsible owner.  If an owner does not wish to withhold security deposit funds in the event of damages, DON'T TAKE SECURITY DEPOSITS. purchase insurance products.   Treating the security deposit in the manner you have described negates the purpose of it for those of us that do rely on it for reimbursement of damages.

              • thale HomeAway Employee 136 posts since
                Oct 27, 2010
                Currently Being Moderated
                Jul 2, 2012 2:55 PM (in response to thaxterlane)
                Re: Security Deposit vs. Damage Insurance

                @thaxterlane

                 

                Res Manager allows owners to choose *BOTH* a security deposit (which has the effects you describe  of keeping travelers accountable) and a property damage protection policy (which has more coverage in that the dollar amounts that gets covered are usually higher than a secuirty deposit).

                 

                I ask for both from my travelers, because it makes me feel more confident as I have the deterrent of the travelers money and the coverage of the PDP. It's a belts and suspenders approach, but I felt strongly enough about it that I made sure that res manager allowed nn owner to check both boxes in a quote/invoice.

                 

                So I'll ask my question again: what do you think about asking for both?

                • thaxterlane Active Contributor 786 posts since
                  Jul 27, 2011
                  Currently Being Moderated
                  Jul 2, 2012 3:37 PM (in response to thale)
                  Re: Security Deposit vs. Damage Insurance

                  I'm confused.

                   

                  Under what conditions do you deduct from the security deposit?  Under what conditions do you submit a claim to an insurance company?

                   

                  If your goal is to keep the customer "happy" do you automatically submit damage claims to the insurance company rather than "upset" the irresponsible guest?

                   

                  Perhaps there are other issues at play if there are damages to property that warrant charges to the guest / insurer on a frequent basis.  It could be the screening of potential guests to ascertain their "fit" for a property needs some adjustment.

                   

                  And, completely unrelated, but an interesting comparison (to me) is that allowing irresponsible guests to escape consequences for their behaviors is akin to raising children without a system of rewards and consequences.  

                   

                  Responsiblity is a good character trait.  Having insurance to address irresponsibility may be a short term solution but it will not bring about better behavior.    Can we acknkowledge it's an EASY solution to a problem that many owners are reluctant to handle?

                  • thale HomeAway Employee 136 posts since
                    Oct 27, 2010
                    Currently Being Moderated
                    Jul 2, 2012 3:46 PM (in response to thaxterlane)
                    Re: Security Deposit vs. Damage Insurance

                    @thaxterlane

                     

                    I don't know that there are any set rules - and every situation is different. So I guess my thought  is that having both a deposit and pdp give you more options on how to handle a wide range of situations.

                     

                    Tom

                    • thaxterlane Active Contributor 786 posts since
                      Jul 27, 2011
                      Currently Being Moderated
                      Jul 2, 2012 4:28 PM (in response to thale)
                      Re: Security Deposit vs. Damage Insurance

                      Yes, I understand you encourage the use of both.

                       

                      But, could you respond to my points, please.

                       

                      We're not having much of a dialogue; you're simply repeating your initial recommendation. 

                       

                      But, thanks for responding to my posts. 

                    • gotomike Contributor 38 posts since
                      Mar 30, 2011
                      Currently Being Moderated
                      Feb 15, 2014 10:44 PM (in response to thale)
                      Re: Security Deposit vs. Damage Insurance

                      Tom,

                      I wanted to bring to your attention the following:

                       

                      CSA seems to favor the renter but not the Property Owner. I've had several iterations of renters causing damage and when asked CSA to supply me with claim forms, those forms were always writen with the renter as a loss payee. The CSA people NEVER undestand that I AM the OWNER and that damage was caused to MY house! At CSA, they do not reply personally to my cause, they simple email a form, and that form is unusable by me because it's writen for the renter...

                      It is why I will now stay clear of the PDP and switch to deposits!

                      CSA should be aware of this...

                      Michael

  • spoonbill Contributor 105 posts since
    Feb 24, 2011
    Currently Being Moderated
    May 7, 2012 9:36 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    I have used the damage insurance (I sell the travel insurance but provide the accidental damaage insurance) myself by having become an agent for Travel Guard (back before VRBO started offering this).  The insurance company has paid each claim without any problem, even when I told them the renter denied having done the damage.  In that case I had 9 girls and the bride's mom for a bridal shower weekend and they got intoxicated and vomitted in numerous places causeing an extra $400 in cleaning fees including steam cleaining fruniture etc.  The mom denied they did anything.  I told the insurance company and they paid.  Another time, a guest was opening the oven when the door handle broke.  It turned out it was not replacable as the manufacturer no longer made the parts needed to repair it.  I replaced it with a new $3000 unit ans the insurance paid me $1500.

     

    I sometimes debate whether to charge a damage deposit in addition and if I am not comfortable with the renter I will but otherwise I don't bother.

    • anja Senior Contributor 1,560 posts since
      Aug 9, 2011
      Currently Being Moderated
      May 7, 2012 11:15 PM (in response to spoonbill)
      Re: Security Deposit vs. Damage Insurance

      Thanks, spoonbill, for responding.  Your experience is interesting to know.  So, did you buy the insurance "in your guests name", or in your name?  As the guests did not need to "admit" they did the damage and "agree" to raising the claim, does it even matter whose name the insurance policy is in?

      • spoonbill Contributor 105 posts since
        Feb 24, 2011
        Currently Being Moderated
        May 7, 2012 11:53 PM (in response to anja)
        Re: Security Deposit vs. Damage Insurance

        I buy the policies in my guests names.  I think it does matter to the insurance company as to whose name is on the policy.  While I don't know for a fact, it wouldn't surpirse me if the insurance company contacts the guests as they have the guests information.  In my case I told them that the guests denied the damage but that my cleaning company had photos showing the damage and an itemized cleaning bill that I had paid was also submitted.  It showed my normal charge and the itemized extra services charges.

        • lce0606 Contributor 126 posts since
          Jan 17, 2012
          Currently Being Moderated
          Jun 27, 2012 6:46 PM (in response to spoonbill)
          Re: Security Deposit vs. Damage Insurance

          I used to use the damage insurance offered by HomeAway/VRBO and for several things they paid promptly. The last time I filed a claim, they denied it because it was "not an accident." That is, it appeared to be deliberate destruction by the renters. Clearly, with a security deposit, the amount could have been deducted. As a result, i will no longer use the damage insurance and wanted to let other homeowners know that when you might need it most, they will not pay. I also agree with several other homeowners who suggested that the psychological incentive of getting the security deposit returned may prevent willful or accidental damage.

    • New Member 1 posts since
      Jul 1, 2012
      Currently Being Moderated
      Jul 2, 2012 5:37 AM (in response to spoonbill)
      Re: Security Deposit vs. Damage Insurance

      Which company underwrites your damage deposit ?

  • New Member 1 posts since
    Feb 21, 2013
    Currently Being Moderated
    Feb 21, 2013 8:52 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    Most of the responses are from owners, and many owners agree that using renters insurance is more convenient than having to refund deposits.  In addition, it is an addditional source of revenue. 

     

    I would like to give some input as a renter.  We are people who rent often.  We are people who care about our surroundings in our own home and always treat our rentals as if they were our own.  Whenever we have been asked to place a damage deposit, we have done so, and never have had any amounts withheld on account of damage.  However, recently we rented a property and were asked to place $69 damage insurance ( for two nights) on top of the rental amount.  We declined.  Unfortunately, the management company, who we assume would have enjoyed additional revenue from this charge, decided to accuse us of causing a tiny knick in the property owners' refrigerator and to pursue us for the "damage."  We truthfully maintain that we did not cause the damage, are have been quite upset by the accusation and persistence of the company.

     

    We view this item not only as a rip-off to consumers, but as an opportunity for harassment.  We will never again rent from someone who charges this item.

    • crescentbeach4u Community All-Star 865 posts since
      Sep 10, 2011
      Currently Being Moderated
      Feb 21, 2013 9:02 PM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      I am sorry to hear this.  But it appears that the management company charged the highest deductible for the insurance so I do not think they profited from this.  You might try dealing directly with the owners next time.

       

      Good luck.

    • hkquinn Active Contributor 342 posts since
      Jul 22, 2012
      Currently Being Moderated
      Feb 21, 2013 9:12 PM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      Matt, I am sorry you had this experience with the management company. I do want to clear a misnomer though, we (the owners) do not receive any monies for the property damage protection. That goes directly to the insurance company. I don't use PDP anymore because it only covers accidents and not things caused by negligence (such as a bunch of drunks dancing on the table and breaking furniture). I find, when we charge a refundable damage deposit, our home is always left in great shape, and I have never had to charge a guest. And, I don't blame you for not wanting to rent to someone who uses the PDP. If a property is owner operated, you could probably ask for a refundable deposit instead. I wish you luck and again and am sorry for your troubles. There are a few other threads about the PDP on the owners side of the community.

    • lce0606 Contributor 126 posts since
      Jan 17, 2012
      Currently Being Moderated
      Feb 21, 2013 9:38 PM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      Matt,

       

      thanks for giving your perspective as a renter.

       

      I am an owner and used to give my renters the choice of property damage insurance or security deposit. Every one of them chose the property damage insurance.

       

      Eventually, someone broke into a locked cabinet I have and damaged it. Property damage insurance did not cover it.

       

      Since then, I only use security deposit and have found that people are more careful of my property.

       

      Just so you know, the property owner gets no revenue from damage insurance. That goes directly to the insurance company.

       

      Overall, from my experience, I would say that property damage insurance is a great source of revenue for the insurance company, may protect a renter (not sure), but does not protect the property owner.

       

      I suspect that the damage to the refrigerator wouldn't have been covered by the insurance anyway.

       

      Sorry you are having to go through this hassle, but I can see why you wouldn't rent with a similar situation in the future. Thanks again for sharing your experience.

      Lynne

      • gotomike Contributor 38 posts since
        Mar 30, 2011
        Currently Being Moderated
        Feb 15, 2014 10:39 PM (in response to lce0606)
        Re: Security Deposit vs. Damage Insurance

        Indeed CSA will cover the renter but not the Property Owner. I've had several iterations of renters causing damage and when asked CSA to supply me with claim forms, those forms were always writen with the renter as a loss payee. The CSA people NEVER undestand that I AM the OWNER and that damage was caused to MY house! I will now stay clear of the PDP and switch to deposits!

        Michael

    • thaxterlane Active Contributor 786 posts since
      Jul 27, 2011
      Currently Being Moderated
      Feb 22, 2013 8:01 AM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      Matt,

       

      Your experience raises the issue of what is damage and what is wear and tear in a rental property.  A "tiny nick" to the finish of a refrigerator is wear and tear in my opinion, and happens with some frequency.  A bottle of touch up finish will likely restore the appliance's appearance unless there is something unique to the finish.  I don't know if a property manager may be more aggresive in assessing "damages" than an individual property owner, but it certainly would be reasonable for a renter to protest a damage assessment for something you describe as a tiny knick. 

       

      Rental agreements are not necessarily clear on the difference between normal wear and tear and damages and I'm not sure how a renter can protect him or herself against being assessed damages by a property manager or owner that believes they are owed compensation.

       

      It's not clear from your post if you paid a security/damage deposit (personal check or credit card?) and had funds deducted following your stay (did I miss this information?).   If your security deposit was paid via credit card you could appeal to the credit card company for assistance in resolving the disagreement.  If you paid by personal check you may not have recourse to a refund, but you do have the abillity to write a review that describes your experience and why you believe you were treated poorly by the property management. 

       

      Good luck and I hope your future rental experiences are pleasant.

    • carol Senior Contributor 2,160 posts since
      Dec 10, 2010
      Currently Being Moderated
      Feb 22, 2013 8:50 AM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      Matt, as a renter, you have rights under state laws where the property is located.   Google "landlord tenant laws" and the state to find them -- most states have some kind of dept of consumer affairs with an easy-to-understand outline of what a landlord has to do to collect damages from a tenant.  Most of the time it involves sending a written statement outlining the damage, with receipts as proof of the cost, within a fixed number of days after you leave the premises.   Most vacation rental owners are ignorant of the requirements and generally they fail to do everything on time.   If this is the case with you, a written letter back to the property manager or owner citing the law should be enough to get them off your back, and will help you if you must protest a charge on your credit card.  

    • lce0606 Contributor 126 posts since
      Jan 17, 2012
      Currently Being Moderated
      Feb 22, 2013 8:57 AM (in response to mattmarieg)
      Re: Security Deposit vs. Damage Insurance

      Matt, now I'm curious about how much the property manager was asking you to pay for the alleged damage to the refrigerator?

      • lahainarental Contributor 76 posts since
        Mar 22, 2012
        Currently Being Moderated
        Feb 22, 2013 11:54 AM (in response to lce0606)
        Re: Security Deposit vs. Damage Insurance

        Sorry to hear about your experience Matt. I can definitely understand how that would make you wary of renting from anyone charging damage insurance in the future.

         

        As travelers ourselves, we always take care of the places we stay like they are our own, so we would prefer to pay a deposit, knowing we will get it back in full.

         

        As owners, we prefer a security deposit as well, because it seems like it would encourage the guests to be more accountable for the property. To date, we haven't had to keep any of our guests deposits. Yes, there has been small damages, like a stained pillow or broken glass. We figure this is part of the cost of doing business and don't want to nickel and dime our guests for stuff like this.

         

        April

        World traveler and proud owner of two beautiful Lahaina Maui vacation rentals:

        http://www.mauiparadiserentals.com/

  • spoonbill Contributor 105 posts since
    Feb 24, 2011
    Currently Being Moderated
    Feb 15, 2014 11:28 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    I have seen some comments refering to Landlord Tennant Law as a basis for damages, etc.  Landlord Tennant Law does not apply to short term rentals, so be careful trying to rely on this law.  Short term rentals fall under Innkeeper rules and law which is candidly much better for you.  Under Landlord Tennant Law renter have real property rights in your property and the legal costs can really mount to defend your rights as an owner.  This is especially true in states like California that favor the tennant.  I make sure my contract spells out that the renter has not property rights.  A lease is a property right in case you are not aware of this fact.

     

    While I had reasonable success with Travel Gaurd for renter's insurance, once VRBO took it over, I ceased offering it and went to a damage deposit.  To make it easy on me and the renter, I authorize the $500 damage deposit just prior to check in.  If no major damage or contract violations occur, on leaving I void the transaction.  It never appears as a charge on their bill and I don't get charged a fee.  If there is damage (haven't had a case yet), I can modify the amount to match the damage and settle the transaction to receive my payment.  Quick, easy and good for both of us.

    • gotomike Contributor 38 posts since
      Mar 30, 2011
      Currently Being Moderated
      Feb 15, 2014 11:34 PM (in response to spoonbill)
      Re: Security Deposit vs. Damage Insurance

      Spoonbil... I'm curious to find out how you authorize a CC charge just prior to your renters' arrival. Is that done via VRBO or HA or do you contract with a third-party booking service. Don't you need to have the renter's credit card's full info and signature in order to do that?

      Michael

      • spoonbill Contributor 105 posts since
        Feb 24, 2011
        Currently Being Moderated
        Feb 15, 2014 11:47 PM (in response to gotomike)
        Re: Security Deposit vs. Damage Insurance

        Michael,

         

        With the VRBO/HA credit card provider system you can't do that as you always charge and settle in the same transaction.  I only used their CC provider in my earliest days and don't use them any longer.  My online booking web site is provided by VacationRentalDesk.com.  They host my site and provide the template for creating it.  It isn't cheap but it has far more capabilities than the VRBO system that is too rudimentary.  My site is linked to the company that handles their CC processing and like other mail order merchants provides the ability to make an authorization separate from settlement.  I don't have access to the full credit card information unless I enter it for the customer (rare occurence, such as invalid card).  They have the responsibility to ensure that it is protected and encrypted at rest so I don't have to worry about that liability.

         

        I can do things like offering discount coupons, different rates for different dates or date ranges, and far too many features to list.  It will take VRBO a long time to get their software to this level of sophistication.  Additionally, there are a large number of reports it can generate.  You can check out my site at CoastalLivingVacation.com

        • gotomike Contributor 38 posts since
          Mar 30, 2011
          Currently Being Moderated
          Feb 16, 2014 12:09 AM (in response to spoonbill)
          Re: Security Deposit vs. Damage Insurance

          Ah great Spoonbill. Thanks. I'll look into it. I already pay close to a thousand bucks on HA to get my listing to the top.It does generate a lot of rentals - in the summer; the house being in Montana - I wonder if your hosting "pushes" your house toward the top of the listing? Or is that another extra fee on VRBO...

          My main listing is on HA and since they bought VRBO and Vacation Rentals I show up there too. But I use HA for the transactions. So far so good. A couple of fools did small damage to things in the house and I find that CSA or PDP is useless - always in favor of the renter - never protecting the homeowner. So first I'm going back to a security deposit but limited to how I can manage it via HA.

          Thanks again for your insight and replies. I'm off to bed now...

          Michael

    • Currently Being Moderated
      Feb 16, 2014 11:02 AM (in response to spoonbill)
      Re: Security Deposit vs. Damage Insurance

      Great point Spoonbill "Short term rentals fall under Innkeeper rules and law which is candidly much better for you.  ".

      This is why I never use the words 'lease' or 'renter' in my 'guests'  'reservation agreements'.  I realize  states have different rules covering vacation homes but I consider myself to be in the hospitality industry similar to a restaurant, theater, hotel and would never want to give any of our guests rights to tenancy.   If they are not complying with our reservation agreement/contract, it states they must vacate immediately and we have the right to remove their personal property etc.  Many of us have found  state laws regarding things like 'defrauding an innkeeper' etc. by searching the internet.

      • gotomike Contributor 38 posts since
        Mar 30, 2011
        Currently Being Moderated
        Feb 16, 2014 11:05 AM (in response to lincoln)
        Re: Security Deposit vs. Damage Insurance

        This is a good point Lincoln. Therefore, what do you refer your "guests" as in your Rental Agreement?

        Michael

        • mlbmaine Senior Contributor 948 posts since
          Mar 2, 2012
          Currently Being Moderated
          Feb 16, 2014 11:57 AM (in response to gotomike)
          Re: Security Deposit vs. Damage Insurance

          Whether landlord/tenant law or hotel/innkeeper law applies to the short-term rental of a residence may vary from state to state.  In determining which law applies, a court will look at the law of that state and the substance and nature of the agreement between the parties.  How the parties are referred to in the agreement will have little or no effect on the court's analysis.  I refer to myself as "Homeowner" and I refer to the renter as "Guest" in my rental agreement.  I do not do this for a legal reason.  I do it for psychological reasons.  I want the people staying at my property to appreciate the fact that it is someone's home, and that they are a guest in it (even though they are a paying guest).  I don't know if it actually makes them more careful during their stay, but I believe that it can't hurt.

          • gotomike Contributor 38 posts since
            Mar 30, 2011
            Currently Being Moderated
            Feb 16, 2014 12:00 PM (in response to mlbmaine)
            Re: Security Deposit vs. Damage Insurance

            Well said. I use the same terms. It makes the "guests" feel more welcome. That is... If they read the entire text of my 3-page Agreement!!!

          • anja Senior Contributor 1,560 posts since
            Aug 9, 2011
            Currently Being Moderated
            Feb 16, 2014 1:59 PM (in response to mlbmaine)
            Re: Security Deposit vs. Damage Insurance

            Ditto....for psychological reasons!  My verbage always refers to the equation:

            Me = HomeOwner  ///  You = Guest.   I call the  legal doc that I issue for their signature, "Vacation Rental Agreement". [have never used the term 'lease'

             

            I agree with 'mlbmain' with same reasoning ...and also with 'gotomike'..... "Guest" is a nicer way to refer to and welcome Travelers into "My Home".    

      • amchap Contributor 241 posts since
        Oct 1, 2011
        Currently Being Moderated
        Feb 16, 2014 12:13 PM (in response to lincoln)
        Re: Security Deposit vs. Damage Insurance

        If they are not complying with our reservation agreement/contract, it states they must vacate immediately and we have the right to remove their personal property etc.  Many of us have found  state laws regarding things like 'defrauding an innkeeper' etc. by searching the internet.

         

        Might be worth mentioning that different states have different laws governing this. We're fortunate in North Carolina to have a Vacation Rental Act which provides for an expedited eviction process for any breach of a vacation rental agreement.

  • spoonbill Contributor 105 posts since
    Feb 24, 2011
    Currently Being Moderated
    Feb 16, 2014 2:14 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    I am copying in the Californai law as taken from the CA.GOV web site on landlord tennant law.  If I have time I will look for the Texas law and add that since those are the two states where I have vacation rentals.  You should search for your states laws and be familiar with them.

     

    Who Is A "Landlord" And Who Is A "Tenant"

     

     

    California Tenants, A Guide to Residential Tenants' and Landlords' Rights and Responsibilities

     

     

    GENERAL INFORMATION ABOUT LANDLORDS AND TENANTS

    A landlord is a person or a company that owns a rental unit. the landlord rents or leases the rental unit to another person, called a tenant, for the tenant to live in. the tenant obtains the right to the exclusive use and possession  of the rental unit during the lease or rental period.

     

     

    Sometimes, the landlord is called the owner, and the tenant is called a resident.

     

     

    A rental unit is an apartment, house, duplex, condominium, or room that a landlord rents to a tenant to live in. in this booklet, the term rental unit means any one of these. because the tenant uses the rental unit to live in, it is called a residential rental unit

     

     

    .Often, a landlord will have a rental agent or a property manager who manages the rental property. the agent or manager is employed

    by the landlord and represents the landlord. in most instances, the tenant can deal with the rental agent or property manager as if this person were the landlord. For example, a tenant can work directly with the agent or manager to resolve problems. When a tenant needs to give the landlord one of the tenant notices described in this booklet, the tenant can give the notice to the landlord's rental agent or property manager.

     

     

    The name, address and telephone number of the manager and an owner of the building (or other person who is authorized to receive legal notices for the owner) must be written in the rental agreement or lease, or posted conspicuously in the rental unit or building. 1

     

     

    SPECIAL SITUATIONS

    The tenant rights and responsibilities discussed  in this booklet apply only to people whom the law defines as tenants. Generally, under California law, lodgers and residents of hotels and motels have the same rights as tenants.2 Situations in which lodgers and residents of hotels and motels do and do not have the rights of tenants, and other special situations, are discussed in the "Special Situations" sidebar below.3

     

     

    Special Situations

    Hotels and motels

     

     

    If you are a resident in a hotel or motel, you do not have the rights of a tenant in any of the following situations:

     

     

    1. You live in a hotel, motel, residence club, or other lodging facility for 30 days or less, and your occupancy is subject to the state’s  hotel occupancy tax.

    2. You live in a hotel, motel, residence club, or other lodging facility for more than 30 days, but have not paid for all room and related charges owing by the 30th day.

    3. You live in a hotel or motel to which the manager has a right of access and control, and all of the following is true:

    The hotel or motel allows occupancy for periods of fewer than seven days.

    All of the following services are provided for all residents:

    - a fireproof safe for residents' use;

    - a central telephone service;

    - maid, mail, and room service; and

    - food service provided by a food establishment that is on or next to the hotel or motel grounds and that is operated in conjunction with the hotel or motel.

    If you live in a unit described by either 1, 2 or 3 above, you are not a tenant; you are a guest. Therefore, you don't have the same rights as a tenant.4 For example, the proprietor of a hotel can lock out a guest who doesn't pay his or her room charges on time, while a landlord would have to begin formal eviction proceedings to evict a nonpaying tenant.

     

     

    Residential hotels

     

     

    You have some of the legal rights of a tenant if you are a resident in a residential hotel, which is in fact your primary residence.5 Residential hotel means any building which contains six or more guest rooms or efficiency units which are designed, used, rented or occupied for sleeping purposes by guests, and which is the primary residence of these guests.6 In residential hotels, a locking mail receptacle must be provided for each residential unit.7

     

     

    It is unlawful for the proprietor of a residential hotel to require a guest to move or to check out and re-register before the guest has lived there for 30 days, if the proprietor's purpose is to have the guest maintain transient occupancy status (and therefore not gain the legal rights of a tenant).8 A person who violates this law may be punished by a $500 civil penalty and may be required to pay the guest's attorney fees.

     

     

    Single lodger in a private residence

     

     

    A lodger is a person who lives in a room in a house where the owner lives. The owner can enter all areas occupied by the lodger and has overall control of the house.9 Most lodgers have the same rights as tenants.10

     

     

    However, in the case of a single lodger in a house where there are no other lodgers, the owner can evict the lodger without using formal eviction proceedings. The owner can give the lodger written notice that the lodger cannot continue to use the room. The amount of notice must be the same as the number of days between rent payments (for example, 30 days). (See "Tenant's notice to end a periodic tenancy".) When the owner has given the lodger proper notice and the time has expired, the lodger has no further right to remain in the owner's house and may be removed as a trespasser.11

     

     

    Transitional housing

     

     

    Some tenants are residents of "transitional housing." Transitional housing provides services and housing to formerly homeless persons for periods of 30 days to 24 months. Special rules cover the behavior of residents in, and eviction of residents from, transitional housing.12

     

     

    Mobilehome parks and recreational vehicle parks

     

     

    Special rules in the Mobilehome Residency Law13 or the Recreational Vehicle Park Occupancy Law,14 and not the rules discussed in this booklet, cover most landlord-tenant relationships in mobilehome parks and recreational vehicle parks.

     

     

    However, normal eviction procedures must be used to evict certain mobilehome residents. Specifically, a person who leases a mobilehome from its owner (where the owner has leased the site for the mobilehome directly from the management of the mobilehome park) is subject to the eviction procedures described in this booklet, and not the eviction provisions in the Mobilehome Residency Law. The same is true for a person who leases both a mobilehome and the site for the mobilehome from the mobilehome park management.15

     

     

     

     

    1Civil Code Sections 1961, 1962, 1962.5. See Moskovitz et al., California Landlord-Tenant Practice, Section 1.21A (Cal. Cont. Ed. Bar 2011).

    2 Civil Code Section 1940(a).

    3 See additional discussion in Moskovitz et al., California Landlord-Tenant Practice, Section 1.3 (Cal. Cont. Ed. Bar 2002, 2005, 2009, 2011).

    4 Civil Code Section 1940.

    5 Health and Safety Code Section 50519(b)(1). See California Practice Guide, Landlord-Tenant, Paragraphs 2:39, 2:40.1, 7:6.2 (Rutter Group 2011).

    6 Health and Safety Code Sections 50519(b)(1). See California Practice Guide, Landlord-Tenant, Paragraphs 2:39, 2:40.1, 7:6.2 (Rutter Group 2011).

    7 Health and Safety Code Sections 17958.3; Civil Code Section 1944.1(i); California Practice Guide, Landlord-Tenant, Paragraph 3:21(a) (Rutter Group 2011).

    8 Civil Code Section 1940.1. Evidence that an occupant was required to check out and re-register creates a rebuttable presumption that the proprietor’s purpose was to have the occupant maintain transient occupancy status. (Civil Code Section 1940.1(a).) This presumption affects the burden of producing evidence.

    9 Civil Code Section 1946.5.

    10 Civil Code Section 1940(a).

    11 Civil Code Section 1946.5, Penal Code Section 602.3.

    12 Health and Safety Code Sections 50580-50591.

    13 Civil Code Sections 798-799.10. See Moskovitz et al., California Landlord-Tenant Practice, Sections 6.62-6.89 (Cal. Cont. Ed. Bar 2011).

    14 Civil Code Sections 799.20-799.79.

    15 California Practice Guide, Landlord-Tenant, Paragraphs 11:27-11:28 (Rutter Group 2011).

    • mlbmaine Senior Contributor 948 posts since
      Mar 2, 2012
      Currently Being Moderated
      Feb 16, 2014 3:52 PM (in response to spoonbill)
      Re: Security Deposit vs. Damage Insurance

      This is an interesting question.  Thank you for providing this information.  If the situation arose where you did need to evict someone staying at your vacation rental, I believe that the prudent course would be to consult with an attorney before taking any action.  My interpretation of the text is that most owners of vacation rental properties in California would be considered as landlords and their guests would be considered as tenants.  The text states:

      A landlord is a person or a company that owns a rental unit. the landlord rents or leases the rental unit to another person, called a tenant, for the tenant to live in. the tenant obtains the right to the exclusive use and possession  of the rental unit during the lease or rental period.

      ...

       

      A rental unit is an apartment, house, duplex, condominium, or room that a landlord rents to a tenant to live in. in this booklet, the term rental unit means any one of these. because the tenant uses the rental unit to live in, it is called a residential rental unit.

      The text imposes no duration requirements on the lease or rental period for the person to be considered a tenant.  The text goes on to state:

      Generally, under California law, lodgers and residents of hotels and motels have the same rights as tenants.2 Situations in which lodgers and residents of hotels and motels do and do not have the rights of tenants, and other special situations, are discussed in the "Special Situations" sidebar below.

      Special Situations

      Hotels and motels

       

      If you are a resident in a hotel or motel, you do not have the rights of a tenant in any of the following situations:

       

      1. You live in a hotel, motel, residence club, or other lodging facility for 30 days or less, and your occupancy is subject to the state’s  hotel occupancy tax.

      2. You live in a hotel, motel, residence club, or other lodging facility for more than 30 days, but have not paid for all room and related charges owing by the 30th day.

      3. You live in a hotel or motel to which the manager has a right of access and control, and all of the following is true:

      The hotel or motel allows occupancy for periods of fewer than seven days.

      All of the following services are provided for all residents:

      - a fireproof safe for residents' use;

      - a central telephone service;

      - maid, mail, and room service; and

      - food service provided by a food establishment that is on or next to the hotel or motel grounds and that is operated in conjunction with the hotel or motel.

      If you live in a unit described by either 1, 2 or 3 above, you are not a tenant; you are a guest. Therefore, you don't have the same rights as a tenant.4 For example, the proprietor of a hotel can lock out a guest who doesn't pay his or her room charges on time, while a landlord would have to begin formal eviction proceedings to evict a nonpaying tenant.

      In order for someone to not be considered a tenant he must be staying in a "hotel, motel, residence club or other lodging facility for 30 days or less."  To me, the question becomes whether or not a house, condo, or apartment could be considered a "lodging facility" under California law.  I suspect that they would not.  The law specifically states that someone staying in "an apartment, house, duplex or condominium" is a tenant without any reference to the length of the stay.  The law would be contradicting itself if these types of properties were also considered to be "lodging facilities"  and people staying at them as "guests" and not "tenants."  I believe that when a court is interpreting a statute it does so in such a way that the law is not interpreted to have internal inconsistencies and contradictions.

      • spoonbill Contributor 105 posts since
        Feb 24, 2011
        Currently Being Moderated
        Feb 16, 2014 4:57 PM (in response to mlbmaine)
        Re: Security Deposit vs. Damage Insurance

        Under California law, where the rental is for 30 days or less or #2 which I interpret as being over 30 days but the entire rent period has not been collected ( 30 day plus rentals are on the rare side on vacation rentals and require a great deal of caution to avoid entering into a landlord tennant arrangement), the full landlord tennant rules do NOT apply.

  • Currently Being Moderated
    Feb 16, 2014 6:09 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    Being required to collect 'Occupancy tax' and  '30 days or less' might be key as they are other facilities (condo-tels, suite-hotels,  etc.) that were not included in the lodging categories listed.  Some states like NC have taken the initiative and have passed laws applying to short term lodging and VR's.  Most have not. So, it might be best for owners in the rest of the states who do not want to be covered by renter friendly landlord laws to clarify it properly in their 'reservation agreement's and to get the guest to agree that if the terms of the agreement are not complied with, that the owner has rights to remove them and their possessions and they will be responsible for all costs invovled. 

    • mlbmaine Senior Contributor 948 posts since
      Mar 2, 2012
      Currently Being Moderated
      Feb 16, 2014 6:33 PM (in response to lincoln)
      Re: Security Deposit vs. Damage Insurance

      If state law provides that short-term vacation rentals are governed by the state's landlord-tenant law, I doubt that you can avoid the law's provisions regarding what steps the owner must follow in order to evict the tenant.  Contract terms that attempt to limit a tenant's legal rights would most likely be void and unenforceable on the basis that they are against the state's public policy.

      • Currently Being Moderated
        Feb 17, 2014 10:14 AM (in response to mlbmaine)
        Re: Security Deposit vs. Damage Insurance

        I stand by my position - for those in states "without specific VR laws", it might be best for owners  who do not want to be covered by renter friendly landlord laws to clarify it properly in their 'reservation agreements'.  Most of us put things in our 'agreements' that might not hold up in court, i.e. 'hold harmless' but we hope they will at least act as a deterrent.

         

        However, IMO, if you are in a state without specific VR laws and you use verbage which states or indicates that the guests  are indeed 'renters' or 'tenants'  in a 'lease' etc. you may be risking a legal ruling that it was your intention to be a landlord under the landlord tenant laws. 

  • spoonbill Contributor 105 posts since
    Feb 24, 2011
    Currently Being Moderated
    Feb 16, 2014 11:18 PM (in response to tmg)
    Re: Security Deposit vs. Damage Insurance

    Here is the key provision under CA Civil Code:

     

    1865.  (a) For purposes of this section, "hotel" means any hotel,

    motel, bed and breakfast inn, or other similar transient lodging

    establishment, but it shall not include any residential hotel as

    defined in Section 50519 of the Health and Safety Code. "Innkeeper"

    means the owner or operator of a hotel, or the duly authorized agent

    or employee of the owner or operator.

       (b) For purposes of this section, "guest" means, and is

    specifically limited to, an occupant of a hotel whose occupancy is

    exempt, pursuant to subdivision (b) of Section 1940, from Chapter 2

    (commencing with Section 1940) of Title 5 of Part 4 of Division 3.

       (c) In addition to, and not in derogation of, any other provision

    of law, every innkeeper shall have the right to evict a guest in the

    manner specified in this subdivision if the guest refuses or

    otherwise fails to fully depart the guest room at or before the

    innkeeper's posted checkout time on the date agreed to by the guest,

    but only if both of the following conditions are met:

       (1) If the guest is provided written notice, at the time that he

    or she was received and provided accommodations by the innkeeper,

    that the innkeeper needs that guest's room to accommodate an arriving

    person with a contractual right thereto, and that if the guest fails

    to fully depart at the time agreed to the innkeeper may enter the

    guest's guest room, take possession of the guest's property, re-key

    the door to the guest room, and make the guest room available to a

    new guest. The written notice shall be signed by the guest.

       (2) At the time that the innkeeper actually undertakes to evict

    the guest as specified in this subdivision, the innkeeper in fact has

    a contractual obligation to provide the guest room to an arriving

    person.

       In the above cases, the innkeeper may enter the guest's guest

    room, take possession of the guest's property, re-key the door to the

    guest room, and make the guest room available to a new guest. The

    evicted guest shall be entitled to immediate possession of his or her

    property upon request therefor, subject to the rights of the

    innkeeper pursuant to Sections 1861 to 1861.28, inclusive.

       (d) As pertains to a minor, the rights of an innkeeper include,

    but are not limited to, the following:

       (1) Where a minor unaccompanied by an adult seeks accommodations,

    the innkeeper may require a parent or guardian of the minor, or

    another responsible adult, to assume, in writing, full liability for

    any and all proper charges and other obligations incurred by the

    minor for accommodations, food and beverages, and other services

    provided by or through the innkeeper, as well as for any and all

    injuries or damage caused by the minor to any person or property.

       (2) Where a minor is accompanied by an adult, the innkeeper may

    require the adult to agree, in writing, not to leave any minor 12

    years of age or younger unattended on the innkeeper's premises at any

    time during their stay, and to control the minor's behavior during

    their stay so as to preserve the peace and quiet of the innkeeper's

    other guests and to prevent any injury to any person and damage to

    any property.

     

    Below is the relevant definition from the code:

     

    1861.1.  Definitions for purposes of Sections 1861 through 1861.27

    include the following:

       (a) "Hotel", "motel", "inn", "boardinghouse", and "lodginghouse

    keeper" means any person, corporation, partnership, unincorporated

    association, public entity, or agent of any of the aforementioned,

    who offers and accepts payment for rooms, sleeping accommodations, or

    board and lodging and retains the right of access to, and control

    of, the dwelling unit.

     

    The key here is retaining right of access to and control of the dwelling unit.  In landlord tennant law you do not have the right of access and control, except as specified at law and it is much more limited.

     

    I realize that this is a lot of legal text that can be hard to follow.  Most states have better protections for inn keepers than CA.  In a sense, you could consider this a worst case scenario but you really need to check your own state's laws.

     

    Key points are short term, you are alwasy safe staying under 30 days, it can get a little trickier when you go over and it can impact your federal tax filings too.  Rights of access and control and collection and payment of an occupancy tax.  The collection of these properties in an agreement makes it clear that you are not entering inot a landlord tennant agreement and places you under the innkeeper statutes.

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