Before letting in a new person assume the occupancy of a building or accommodation facility, you as a landlord will require your tenant to deposit a sum of money in your account. This is a security deposit. After this, you should issue a security deposit receipt to your tenant to make things official.
Security Deposit Receipts
The importance of this receipt
A security deposit receipt is important to you as the landlord. But you aren’t the only one who will benefit from this document. Creating a deposit receipt is essential for the following reasons:
- The benefit to you as the landlord
In many states, it’s a requirement for landlords to give notice to tenants of the existence of money in an escrow account. Under such a circumstance, the receipt serves to protect you from any unnecessary litigations that might arise in the future.
- The benefit for tenants
For the tenant, the rental deposit receipt will be their proof that they have remitted the security deposit as required. Additionally, the receipt also gives them some peace of mind knowing that they complied with all of the requirements.
- The benefit for prospective buyers
Before starting negotiations, buyers want to know if you have already remitted the security deposit for the building in dispute. The only possible way they can find out if the remittance has taken place is if you can show them this receipt.
- General benefits
The security deposit serves to give you a sense of confidence. With this, you have the assurance that regardless of the damages and other dangers that might arise during the occupancy, you still have the chance to get your money back. Moreover, you can also use the receipt to facilitate litigations and other disputes.
Deposit Receipt Templates
How do I write a security deposit receipt?
When creating your own security deposit receipt, it also helps to refer to traditional processes. This leads or directs you to the development of a highly-usable and outstanding deposit receipt. Here is a guide for you to prepare the rent receipt:
- Select a template
The first step you must take is to search for a template that has the format you want to use. If you can organize all of the required information to include in it, then you can come up with a receipt that is both understandable and presentable. You can achieve this by choosing a pre-formatted and well-developed template security deposit form.
- Include a header
Include this detail in the template. Generally, the top part of the receipt should bear the title of your rental company or the property you’re renting out to tenants. Together with the title is the property’s address, and your contact details.
- Add the title
The title makes your receipt look more official and it also helps in making the document identifiable and unique. The title can be very brief and simple like “Security Deposit Receipt.”
- Include the details about the tenant
You need to specify the name of the tenant who gave the security deposit. You may also include the unit number that they’re renting. The inclusion of the tenant’s name is an assurance that all specific entities have paid their security deposits.
- Indicate the amount of the security deposit that the tenant paid
This is the most important item that should appear in your receipt – the amount that the renter or tenant has given you as payment for the security deposit. You should also state the purpose of the payment, the term of the payment, and the date when your tenant gave you the payment.
- Include any other additional information as needed
You can include additional information if you deem this essential in the receipt. Sometimes, this receipt may also include the name of the bank or financial institution where you have deposited the security deposit.
As long as the document remains organized, presentable, and polished, you can include a few more agreement clauses or items that you believe are essential.
- Add your name or the name of any other authorized representative who will receive the security deposit
You also need to write your name, position, and your address on the receipt. If you won’t receive the security deposit, tell the person who will receive the payment to include these details in the document. With this information on the receipt, the tenant has a point person to look for in case there are any concerns or questions about the security deposit made.
- Add space for the signatures
It’s very important that your receipt gets signed by yourself and your tenant. The presence of the signatures means that everyone involved has agreed and approved all of the information contained in the template.
- Polish your template before using it
Once you have finalized all of the details of your receipt template, it’s time to start assessing the document. This means reviewing the contents appropriately and objectively. Make any changes if necessary to improve the quality of the template.
Rental Deposit Receipts
The rules and laws surrounding security deposit receipts
It is the usual practice with almost all businesses that transaction documents – security deposit receipts included – should follow certain provisions and laws. When it comes to a rental deposit receipt, these laws include:
- Statutory Requirements
In some states, there is a requirement that landlords must make these deposits public. This means that you should declare them for the purpose of tax exemption or other financial obligations. Because of this requirement, the deposit along with the associated acknowledgment will serve as supplementary notice if and when the need for this notice arises.
- Time Frame
All documents have their own validities, even a security deposit agreement. This refers to the time period in which the document remains active and is legally considered valid. Some jurisdictions require you to send this notice to the involved parties within a period of 30 days. You should then familiarize yourself with the requirements and needs of your state’s jurisdiction.
- Interest Obligations
There are also cases where these deposits attract certain interests that the tenant and the landlord share. Again, it will be up to you to know about the prevailing interest laws, how they may affect your rental business, and everything associated with it. You can learn more about this information from the local offices in your state.