Security Deposit Required?

I have a 1 bedroom lockoff suite available for rent. I have never rented before and I want to ensure that I am protected as much as possible. I know that the person using the suite will have to present a credit card when checking in, but is it possible that after checking out some damage may be noticed by the resort and that the resort would come back to me for the charges? Does it make sense to ask for a security deposit until the final bill is received from the resort? Also, any other suggestions for minimizing risk when renting to a stranger would be helpful.

Although your renter has presented his credit card to the resort and damage has occurred and the renter refuses the charges to his credit card, the ultimate responsibilty will be yours (the owner of the week), however as long as I've been reading timeshare forums (almost 10 years), I have read only one instance where this situation occurred ..... it is very rare.

As far as the security deposit and rental agreement, you can search forums entering 'rental agreement' or go to Redweek resoures at the very top right side of this page. You can change the rental agreement to your liking by asking for a damage deposit to be returned to the renter after inspection of the unit ..... it's all up to you.

I can tell you, as someone who would never damage a unit, that if I had to choose between a rental week that required a security deposit, and one that didn't, I would always choose the one that didn't. As a renter, we are also taking a chance that the person on the other end is as honest as I am. I want what I pay for, but I don't want to have to pay more. A hotel would not charge me a security deposit, and even if they did, I "know where they live" to get my money back. I do not know the person I am renting from. Just giving you another perspective.

Thanks for the input. I am just trying to figure out the best way to protect myself as well as give the potential renter assurance that I am trustworthy. I noticed that First American offers an Escrow service. Does anyone know if this service is used by many people?

chuckg43 wrote:

Thanks for the input. I am just trying to figure out the best way to protect myself as well as give the potential renter assurance that I am trustworthy. I noticed that First American offers an Escrow service. Does anyone know if this service is used by many people?

1. It mainly protects the renter and not the owner. If there is a problem with the unit, First American will withhold payment of funds to the owner until the problem is resolved. The escrow service does NOT protect the owner from damage a renter may do to the unit.

2. The owner is not paid until AFTER the rental period. This is not acceptable to many owners since they use the rental money to pay the MFs. Some rentals are made several months in advance; owners cannot wait for the money.

3. Renter submits a 50% deposit with the application (if the rental period is within the next 60 days, the renter pays 100%). If the renter does not pay the balance 60 days before checkin, the renter loses the deposit. The owner now has less than 60 days to scramble to either re-rent the unit OR deposit the unit in an exchange company (less or no rental; decrease in trade value, etc).

I am in the process of purchasing time share and they have requested 1,000 deposit also in addition to maintenance fee upfront. Is this legit, I dun know I am fairly new to this time share stuff.

yovanab wrote:

I am in the process of purchasing time share and they have requested 1,000 deposit also in addition to maintenance fee upfront. Is this legit, I dun know I am fairly new to this time share stuff.

Who is this unidentified "they" you vaguely mention??? A private seller? A broker? A third party eBay reseller? Other?

You have not provided enough detail to give you an informed answer, but anyone requesting pre-payment of maintenance fees before completion of a resale transaction is highly suspect, in my opinion. The request is unusual and entirely inappropriate. Maintenance fees are the current owner's responsibility --- not your problem as a potential buyer.

Question: Why would you (or anyone else) pre-pay a maintenance fee for a week that they do not yet even own? And how would a buyer even know whether or not this "pre-paid" mf money ever got applied to maintenance fees at all?

Answer: They wouldn't. Accordingly, It makes no sense at all to even consider this. Maintenance fees are not your problem and not your responsibility until and unless you actually become the owner (not just a potential buyer).

Please ask for a neutral party to complete the transaction. There are closing companies who do this at a nominal cost. This is not a simple exchange of funds for a deed. There is likely a right of first refusal, assurance of a clean title, etc.

I am in the midst of a timeshare purchase right now and the closing fees will be about $700. I did put up an earnest money deposit with the closing agent, an attorney in this case.

Check with Redweek, they probably have a closing service you can trust.

dennish144 wrote:

Please ask for a neutral party to complete the transaction. There are closing companies who do this at a nominal cost. This is not a simple exchange of funds for a deed. There is likely a right of first refusal, assurance of a clean title, etc.

I am in the midst of a timeshare purchase right now and the closing fees will be about $700. I did put up an earnest money deposit with the closing agent, an attorney in this case.

Check with Redweek, they probably have a closing service you can trust.

I agree wholeheartedly with recommendation to utilize a neutral third party "closer" for timeshare resale transactions. Unfortunately, this is sometimes not an available option (eBay mega-resellers, for example, usually require a buyer to use and pay their "internal" closing services, or some other specific entity with which they have a "very close" working relationship (...call me a cynic, but the word "kickback" somehow comes immediately to mind).

RedWeek would almost certainly recommend First American Title, which they utilize in "full service" transactions. There is nothing wrong with First American Title, but there are certainly many other options available (if / when the buyer actually has any say in the matter of choosing the closing entity). Legal Timeshare Transfers in Georgia, for one example, will handle all details of a closing, including escrow of funds, preparation and recording of new deed, etc. for under $300 (but LTT does not offer or conduct title searches or title insurance). I have successfully used LTT at least a half dozen times (as both buyer and seller) over the past decade and I have always found them to be competent, friendly and with excellent communications throughout the transaction process. For the record, I have no affiliation with LTT other than as a satisfied repeat customer. I am not "advertising" LTT, just mentioning my personal experience after having done business with them multiple times during the past 10 years.