Rendin: rental protection more powerful than any safety deposit

Thanks to tenant background checks and the surety provided by our company in the form of a rent guarantee, the tenant does not have to pay the deposit to the landlord. Importantly, this solution is beneficial for both parties

- assures Piotr Kula from Rendin Poland.

He also reminds that a safety deposit is how landlords protect themselves in case the tenant destroys the property. This means they will never give up on the opportunity to receive a deposit, the only question is how much they will ask for. Rendin believes that a safety deposit does not provide sufficient protection and proposes a different solution.

Deposits are a thing of the past

The Rental Property Owner Association „Mieszkanicznik” specifies that the most common safety deposit amount is three times the agreed rent, although there are also landlords who are satisfied with the equivalent of one month's rent.

For many potential tenants, especially young people who are trying to become independent, the rent itself is already a heavy burden. A deposit, especially if the landlord asks for three months' rent’s worth, may be an insurmountable obstacle.

On top of that, you can find plenty of stories on the internet about owners refusing to return the deposit under any pretext after the tenant leaves the apartment. It comes to no surprise, then, that potential tenants fear their hard-earned money will simply vanish

- says Piotr Kula.

On the other hand, tenants are not always saints either. When a problem with the tenant appears, the final cost to the landlord is much higher than the deposit value in 85% of cases

- adds Rendin Poland’s expert.

On internet forums, property owners often complain that items such as carpets or paintings end up disappearing from their apartments. One landlord discovered nail holes in the wardrobe because the tenant decided to hang decorations during the New Year's Eve party. Rendin has harnessed new technologies to reconcile the interests of both sides.

Apartments are rented out using a special application on a smartphone or computer. To simplify this process as much as possible, digital lease agreements are only signed for a maximum period of one year, as the law does not require a written contract in such cases.

Here’s what it looks like in practice:

• the landlord inputs the most important information about the property into the application along with photos; if the landlord already has a candidate for the tenancy, said candidate must also create a Rendin account so that the company can verify them (we’ll explain more about this soon);

• the landlord gets to propose their own conditions to add to the lease agreement template available in the application;

• a Handover Act, which records the condition of the property and all the items it is equipped with, is attached to the agreement.

Handover Act also to be found in the Rendin application

Attention! The Handover Act is a very important document – it allows you to avoid issues with determining the condition of the apartment before and after the lease period. It should always contain photographic documentation to dispel any doubts.

The Handover Act should contain information on the condition and quality of walls, floors, windows, furniture, appliances, etc. Water and energy meters should also be recorded so that the new tenant does not end up having to cover costs generated by the previous tenant. You can easily enter all this information in the Rendin application, which means you won’t miss anything important.

Of course, the landlord gets to choose their preferred tenant from amongst the candidates suggested by Rendin. Importantly, every person who wants to find an apartment on the platform has to create a profile, which has to be filled out with their rental property requirements but also personal data such as the PESEL number. This makes it possible to verify a candidate’s background, especially whether there are no outstanding debts or arrears with payments. In fact, the user agrees for the company to check their standing in, among other places, the Credit Information Bureau (Biuro Informacji Kredytowej or BIK) and the ERIF BIG debtor database.

That is absolutely normal. Remember that the landlords risk more because they give the keys to their apartment to a stranger – even more so if the property is furnished and equipped with additional appliances. Verifying tenant candidates on your own is very burdensome. At Rendin, we have extensive verification tools that are constantly improving. They keep learning by checking thousands of candidates, and the larger the sample size, the more effective we become. This means we take the burden of verifying candidates off the landlord. Then, we take financial responsibility for the tenants who pass the background check, which is not done by any other company on the market

- says Alain Aun, Rendin CEO and cofounder.

He admits that about 30% of candidates fail to pass the verification process, mostly due to outstanding liabilities. During the two years of the company’s operations, Rendin has performed background checks on more than 9500 tenants and helped sign more than 2000 contracts.

Tenant background checks are beneficial to both parties

For the tenant, the main benefit of a background check is that they don’t have to pay the deposit and then worry about whether they will get their money back. Rendin does charge a monthly fee of 2.5% of the rent for granting the surety. For example, if the rent is 2 000 PLN, this means an additional expenditure of 50 PLN per month for the entire duration of the contract, which amounts to 600 PLN per year. However, let’s remember that Rendin does not charge a commission, unlike real estate agencies, which usually demand one month’s rent.

In turn, the landlord gives up on charging a security deposit. Instead, Rendin guarantees that in case of any damage, the company will cover repair costs up to the amount of four months’ rent. The landlord can count on the same protection in the event of unpaid rent.

In exchange for renouncing the deposit, the landlord also obtains a guarantee from Rendin that in the event of any unpaid rent, the company will immediately pay out up to four months’ rent. The landlord can count on the same protection for covering repair costs. In addition to financial protection, the company also provides legal services with the objective of evicting the tenant in case they fail to pay the rent and do not want to move out.

Thus, our surety protects landlords better than a security deposit. By mediating with troublesome tenants, we usually manage to convince them that a month's rent commitment in installments, our help with moving out, and an amicable settlement are better than trying to fight it out in court, which in turn may cause an additional increase in their financial burden and worsen their situation. However, if mediation does not help, our legal department will make sure that the legal procedure is fully completed. This would sometimes be difficult to handle for a landlord facing such an issue on their own

- underlined Rendin’s representative.

Thanks to Rendin’s service, landlords don’t have to worry about their money. They will never have to wonder what to do if the tenant does not pay the bills or the rent, or whether they’re allowed to disconnect the utilities – the company takes care of making sure landlords get backed into the corner as infrequently as possible.

Attention! Despite acquiring this type of protection, the landlord should not give up on home insurance. Rendin does not cover the costs associated with emergency situations (e.g. fire or flood) or damage caused by third parties and malfunctions not related to the tenant (e.g. the apartment getting flooded because of a malfunction or the upstairs neighbor).

Best rental agreement

Using Rendin’s rental platform brings more benefits to both parties connected by a rental agreement. In the current situation, with hundreds of thousands of families, including the refugees from Ukraine, looking for a rental apartment, it is crucial for landlords to minimize the risk of stumbling upon a dishonest tenant. This is exactly where Rendin comes in. The company allows owners to save plenty of time and avoid having to perform the role of “an investigator”.

The Rendin platform is also beneficial for tenants who place importance on credibility. When many people are competing for an apartment, the Rendin recommendation can be a great advantage. Piotr Kula points out that the tool for verifying tenants’ financial history can also be used free of charge by real estate agents. The company estimates that the tool will save a week's worth of an agent’s work every month.

The article was originally published on the GetHome blog.