Lay My Hat

I have a question about my about-to-be-introduced security deposit please. Mine is a little cottage and I’m intending to ask for a deposit of £100, payable at the time they pay their second and final payment and returnable within two weeks of them leaving so as to give me time to check everything. I have a number of guests from abroad, so who should pay my bank charges when returning deposits to these guests? My bank charges me £10 to send money to Europe and £22 elsewhere. I don’t want to have to pay this myself, but neither do I really see why my guests should pay. And it doesn’t seem right to charge overseas guests a higher security deposit. How do people handle this?

Look into Transferwise rather than using your bank to send money overseas.
I would be surprised if your bank charges are less than Transferwise. (I'm sure others will respond to your query more specifically).

Currencyfair is another one. They charge us €3 irrespective of the amount, and the exchange rate is usually only half of 1% less than the Interbank rate.

The Olive Grove wrote:Currencyfair is another one. They charge us €3 irrespective of the amount, and the exchange rate is usually only half of 1% less than the Interbank rate.

+1

Returning deposits via bank details is a massive faff, especially overseas ones. Just use Paypal. No charges if it's refunded within 60 days. (Or rather, they refund the charges in full)
Depending on your final balance payment time this might not quite work. I do it the week before when I send them the final email with all the arrival details repeated, and any last minute queries EG in case they didn't get back to me with an arrival time.

I agree that CurrencyFair is good - but I understood that transfers had to be from your bank account in one currency to your bank account in another currency? So not from you to somebody else.

Nope - I ordered a pool robot from a firm up north in Italy and transferred the money from the UK to them via CurrencyFair. I did ask CurrencyFair first if it was possible.

Moonshine wrote:Mine is a little cottage and I’m intending to ask for a deposit of £100, payable at the time they pay their second and final payment and returnable within two weeks of them leaving so as to give me time to check everything.

If I were a guest, I would not consider it reasonable for you to take 2 weeks to check everything. How do you expect me to check everything is in order when I move in if it's going to take you 2 weeks to do so? If something is wrong, I would need to know straight away and wouldn't expect you to come back 2 weeks later and say a vase is broken. It was fine when I handed over the keys 2 weeks ago, you must have broken it...

Thanks very much everyone for your recommendations, which look very promising. I'll investigate both Transferwise and CurrencyFair. Paypal wouldn't work for me because my final balance payment time is two months before arrival, and I want to keep it like that, and collect the deposit at the same time, as that will work for me.

Newtimber: thanks for your comment. If you think two weeks unreasonable maybe some guests will too, so I must think how to phrase it. Maybe I'll just add something like 'usually much earlier'. I wouldn't need two weeks to discover a broken vase, but I might to discover that sunscreen stains on bedlinen were permanent because of all the stages I have to go through before deciding that I'll never get the stains out: 90C wash, one hour boiling on the stove in washing soda, another 90C wash, then two days of soaking in Viakal and another 90C wash. And drying between each stage because the stains aren't so clearly visible when the linen is wet. So that's why I put two weeks, plus the fact that I might be away when my guests leave. I'm encouraged that some other people say two weeks too. Some other people don't give any time, but I think I prefer to be clear.

We state that the €200 security deposit will be returned within two weeks, although we normally return it within two days, as soon as we have done the changeover.

Not including delays when we have had to evaluate how much we should take off for damage or extra cleaning (withholding some of the security deposit has only occurred with less than 2% of our bookings), we have only once taken almost two weeks to return the security deposit. That was when we had the double disaster of not one but two balance payments not being paid on time, and having to pay a bookkeeping invoice earlier than expected.

Thank you AngloDutch, that's reassuring. That's exactly how I see it working here too.

AngloDutch wrote:

Not including delays when we have had to evaluate how much we should take off for damage or extra cleaning (withholding some of the security deposit has only occurred with less than 2% of our bookings), we have only once taken almost two weeks to return the security deposit. That was when we had the double disaster of not one but two balance payments not being paid on time, and having to pay a bookkeeping invoice earlier than expected.

With respect, I do not think that you should ever use the security deposit to improve your cashflow. It's not your money; the guest hasn't agreed to give you an unsecured loan, it's a security deposit and you shouldn't spend it.

It is of course entirely acceptable to tell the guests that there has been some damage and you are getting estimates for repair before returning their deposit. This is different from suddenly 2 weeks after they've left informing them that they'd caused damage to which the guest will obviously say "I didn't cause the damage, Someone else has been in and caused the damage and you're now trying to pin it on me"

newtimber wrote:

AngloDutch wrote:

Not including delays when we have had to evaluate how much we should take off for damage or extra cleaning (withholding some of the security deposit has only occurred with less than 2% of our bookings), we have only once taken almost two weeks to return the security deposit. That was when we had the double disaster of not one but two balance payments not being paid on time, and having to pay a bookkeeping invoice earlier than expected.

With respect, I do not think that you should ever use the security deposit to improve your cashflow. It's not your money; the guest hasn't agreed to give you an unsecured loan, it's a security deposit and you shouldn't spend it.

I wholeheartedly agree, Newtimber. We were still within the 2 weeks when we returned it, so the guests didn't wonder where it was.