I have a tenant who wants to lease out his parking lot on weekends. Should I require a security deposit?

The lessee has liability insurance naming the landlord as additional insured.
In Leasing Property - Asked by Joe M. - Aug 16, 2012
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Answer(s)

Monica M.
Owner/Investor
Santa Clarita, CA

I wouldn't require a security deposit since he's already paid one out to you to date. If any property damage occurs, it would be the responsibility of both himself and his insurance company to fix it.

Aug 17, 2012
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Harry S.
Broker/Agent
White Plains, MD

I would require a securty deposit because depending on use they may be an environmental problem and his insurance should also cover that but it keeps them honest

Aug 17, 2012
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Fred D.
Broker/Agent
West Hills, CA

In addition to environmental issues, It is essencial for a Landlord to require a security deposit from the tenant. In some situations I will ask for a security deposit equal to 1, 2 or even 3 months rent, depending on the credit of the tenant and his credit and his ability to pay rent. A security deposit is good to have not only to cover damages done to the property during the lease period it is also an excellent tool to use in case of an eviction that may take months. The landlord in that case is ahead 1-3 months. The security deposit can be used to cover damages and loss of rent. I can write pages as to why it is always important for landlord to ask forsecurity deposit.

Aug 17, 2012
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Donald R.
Broker/Agent
Encino, CA

The answer is YES. Obtain at least the amount of 2-3 months rent and check their credit. they should sign personally if it is a corporation ,LL C, etc. Be sure that the tenants' insurance company issues you an additional insured certificate. .Get a copy of the policy to make sure the coverages are sufficient to cover you or another third party. There should be with a notice of cancellation to you in case the tenant defaults.

Aug 21, 2012
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Zachary B.
Broker/Agent
Oradell, NJ

The tenant has to provide more than a security deposit. Besides additional insurance SPECIFICALLY for the parking use, there should be some kind of hold harmless clause in the lease protecting the landlord from lawsuits. Moving vehicles provide a host of liability issues. Remember, when the tenant gets sued for some kind of traffic accident on premises, so will the landlord. Many insurance policies require notice to them within a specific time period, otherwise they will not honor claims made. A vigilant insurance claim reporting procedures and monitoring must be adhered to. As for the environmental exposure, that is another issue that has its' own set of problems and exposure.

Aug 28, 2012
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