How does the deposit payment and settlement work?
Flatio landlords cannot require a security deposit for stays of less than 180 days (6 months). For stays longer than 180 days, the landlord can decide whether or not to require a deposit. (Exceptions are made in certain regions of some countries, such as in Spain, where local laws require landlords to collect a security deposit, regardless of the length of stay. In such cases, a deposit can be charged even for short-term stays.)
However, to give you peace of mind and provide you with possible financial compensation in the event of damage to your property, we offer a free Rental Insurance - Powered by AXA coverage to all reservations that don't require a deposit. This coverage goes way above standard coverage as it also includes assistance services and legal protection, together with a 24/7 online support of AXA Assistance.
Please note that reservations that require a deposit payment can’t be covered by the Rental Insurance and the deposit will serve as the only coverage in case any issues arise.
If you ask for a deposit, please note the following:
Payment of the deposit
If the classic (refundable) deposit is properly set in the My Rentals web application and the tenant then creates a reservation request to which the set deposit applies, the tenant must transfer it to the Flatio bank account by the date the lease agreement begins (i.e., the date the tenant is supposed to move, according to the signed agreement).
The deposit is then forwarded from the Flatio bank account to your account in full on the same day the first rent is sent.
Note: A refundable deposit isn't subject to the Flatio commission fee.
In any case, we recommend not only relying on the collection of a classic (refundable) deposit, but also not forgetting to sign the handover and takeover protocols, as well as taking photos of the accommodation from the moment it was handed over to the tenant and taken over back from them. These documents will help you avoid possible misunderstandings.
If the deposit isn't paid by the due date (move-in date according to the signed lease agreement), landlords have the right to terminate the lease for gross violation without penalty. We even recommend this.
How does the deposit settlement process work?
Although we expect the deposit to be fully refundable in most cases, you may, of course, need to use a portion of the deposit to cover expenses incurred. The refundable deposit may be used to cover expenses within the limits of legal regulations, i.e. payment of unpaid rent(s) or damages to the accommodation (not for cleaning services).
The refundable deposit can also be used for underpayments on energy bills. It should be noted, however, that Flatio's rental prices are final, including energy charges, and that according to the lease agreement, 15% of the rental price is reserved for utility charges. Therefore, if the tenant's consumption doesn't exceed the specified amount, it's not possible to claim the underpayments incurred in the energy billing from the refundable deposit (the tenant has paid the energy charges as part of the rent paid).
Regardless of whether you return the deposit in full or intend to use part of it to cover costs incurred, we recommend that you provide the tenant with a written document stating the following:
- the amount of the refundable deposit paid
- all expenses for which you plan to use the deposit (including supporting documents such as copies of payment receipts or energy bills), along with the exact amounts for each expense)
- the amount of the deposit that will be returned to the tenant and the payment method by which the specified amount will be returned (cash or bank transfer). (In case of bank transfer, the account number should be included.)
To make your work easier, we have created a document template for you, which you can find in the My Rentals application (My Profile - > Documents -> Deposit settlement).
Deposit settlement
After the end of the lease, you need to send the tenant a deposit settlement document reflecting the deposit charges, preferably through the Messages section in the My Rentals application. (You can find a document template in the “Documents" section of your profile).
If no additional costs need to be covered, you are obligated to refund the deposit within 14 days after the tenant’s move-out. The refund period may be prolonged only if there are some additional charges and it will take some time to get the information about the exact costs (e.g. a bill for a repair).
Since the payment of the deposit is processed completely outside Flatio, you should agree with the tenant on how the deposit will be returned to them (in cash or by bank transfer to the tenant's account) in whole or in part (depending on whether there was any damage to the property) and make the payment.
Please note that if you choose bank transfer instead of cash payment, you'll need to request the account details from the tenant.
