Many people have not heard of surety bonds and seem confused when I mention them, so I thought I'd provide some information about them that you can read at your leisure.
The surety bonds we use are provided by SureDeposit. A surety bond is an insurance product that protects our community like a security deposit would. We use the surety bond to enable us to allow you to to move in with a smaller security deposit.
We allow residents two options at move in.
1. You can choose to provide a full $1500 security deposit. In the long run, this is the cheaper option, as it is 100% refundable if you don't owe us any money after you move out.
2. You can choose to provide us a $500 security deposit, and a $1000 surety bond. The bond will cost you $175, so your total out of pocket is only $675 ($500 deposit + $175 bond premium). The premium for the bond is non refundable, so while this option will allow you the least amount of "out of pocket" expense, in the long run it will cost you more than providing us a full deposit (especially for shorter tenancies).
How the bond works:
When you're here to sign your lease agreement, you'll complete an application for the bond. It's really just a form that specifies what size bond you want (you'll want $1000 for $175), make required disclosures to you, etc.
The bond is good for the life of your tenancy. If you move from one of our apartments into another one, the bond goes with you (there is a form you need to sign to transfer the bond).
When you move out, whatever you owe us in excess of what we recover from your security deposit will be paid to us by SureDeposit, up to your maximum bond amount ($1000). Here are three examples to help you understand how the bond works:
1. If you paid a $500 security deposit, and had a $1000 bond, and you moved out owing us $200, we'd recover that from your security deposit, return to you $300 from your security deposit, and your bond will terminate.
2. With that same security deposit and bond amount, you moved out owing us $800, we'd retain your entire $500 deposit, and submit a claim to SureDeposit for $300. They would pay us, and contact you to collect $300.
3. With the same security deposit and bond amount, you moved out owing us $1900, we're retain your entire $500 deposit and we'd submit a claim to SureDeposit for $1000. SureDeposit would pay us, and then contact you to collect $1000. We would also contact you to collect the $400 balance of what you owe us.
It's important to understand a surety bond protects us from losses, it does not protect you. If we submit a claim to SureDeposit to collect on the bond, you will owe them the amount we collect from them. You may also still owe us money if the bond doesn't cover the entire balance that you owe.
With that in mind, you may ask yourself, why would you want to use a surety bond. You may not want to; you always have the option of providing us a full deposit, but if you want to reduce the up front move in cost, and don't mind it costing a little more in the long run, and and you don't expect to move out owing us anything, it can really help you get moved into your new home.
That's alot to read, what should I take away from this?
- A surety bond can help you reduce your "up front" move in costs
- The bond is provided by SureDeposit. We are not providing you or selling you any bonds or insurance.
- The premium you pay for the bond is "non-refundable." We simply collect your payment, and send it to SureDeposit.
- The money you provide us for your security deposit is 100% refundable. This is not the same as the money provided for the bond premium.
- A surety bond claim will result in you owing money to SureDeposit.
- You will need two cashiers checks/money orders. One payable to the Blue Hills Studios for your rent + security deposit, and one payable to SureDeposit for $175.
You can read more about the surety bond provided by SureDeposit on their website. If you have any other questions, please email me at PropMgrJay (at) gmail (dot) com and I'll do my best to get you an answer.