The concept of a security deposit hold is pretty straightforward: you want to be able to get money from the guest to cover damages, but you don't actually want to take any money unless you have to - and most of the time, you won't.
If you have the guest's credit card number, it seems like it would be easy enough to just hit it with an extra charge. Unfortunately, destructive guests aren't stupid - they know how to cancel their card or block your charges before you know they've wrecked your place.
A security deposit hold provides a way around this problem. You've probably heard of them at the gas station: the gas station will place a hold of several hundred dollars on your credit card before you start pumping the gas. Then, when you're finished, they'll charge the correct amount, and release the rest of the hold. Only the actual charge ever shows up on your credit card bill to be paid.
OwnerRez security deposit holds work the same way: Prior to guest arrival, a hold is placed against their credit card - not a charge, just a hold. This hold will be kept active throughout the length of their stay, and for a few days afterwards to give you a chance to check for damages. Assuming there's no damage, the hold will eventually be automatically released. If there's damage, though, you can place a charge against the hold and have it honored - even if the card has been canceled!
Our experience indicates that a security deposit hold is the best and most reliable way to protect yourself from guest damage, so we recommend that it be used if at all possible.
- Configuring
- Schedule
- Extending
- Releasing
- Security Deposit Hold Time Limit
- Charging Against
- Refunding
- Airbnb
- Booking.com
- Vrbo/HomeToGo
Configuring
Security deposits are configured in the Property Rules.
Security Deposits are configurable for the following properties.
- All direct bookings if configured in the Property > Rules.
- Channel Integrated Properties if configured in Integrated Channels settings.
- Security Deposits set for Non-channel Integrated properties (e.g., properties that rely on Custom iCal Links and the Channel Bridge for booking information) are non-enforceable, and their rules will still be "no security deposit."
Security Deposits can be configured in the specific Property > General Info area, which allows users to directly edit security deposit rules by clicking the pencil icon.
Alternatively, you can configure your security deposits in the specific Property > General Info > Rules > Security Deposits section, and click on the pencil icon.
Each Booking also has a Rules tab. This is automatically populated with the Property's setting at the time the booking is created. However, you can change it in the Booking, and only that Booking will be affected - not the Property as a whole.
The available settings are the same in both places:
- Amount - the dollar amount of the security deposit hold that will be placed. Note that this is not a charge against the guest's credit card, just a hold, which in most cases never appears on their statement, although it does count against their credit limit while active. It is simply a guaranteed amount that you can charge against later no matter what. It is completely separate from, and not related to, any Charges in the Booking.
- Guest Reminder - The default choice is for an automatic reminder to be sent to the guest if no security deposit has been scheduled. This normally occurs because the guest did not provide a credit card (such as, they chose to pay via check).
- Even if a guest didn't provide a credit card, it's still good to leave the automatic reminder. If they do provide a credit card for the security deposit, then you have it and are protected. If they can't, they'll usually reach out to you, and you can make some other arrangement.
- Held - This is the number of days prior to guest arrival that the hold is placed. The default is 2 days - that is, we place the hold two days before arrival. It is not recommended to place the hold too early because they expire automatically after a certain period of time. Generally, placing the hold 2-3 days before the guest arrives allows you time to resolve any issues with the guest should the hold not be authorized. It is not possible to place the hold at time of booking.
- Released - This is the number of days after guest departure that the security deposit hold will be automatically released, if you've taken no other action before that time. This should be as short as possible, while leaving enough time to confirm that there was no damage - we've found 5 days to work well.
When the booking is created, and a credit card is provided, a security deposit hold will be automatically scheduled. You can see this on the Booking > Transactions tab.
Schedule
While security deposit holds or Refundable Damage Deposits (RDDs) are configured automatically for bookings in your Property Rules or Integrated Channel settings, there may be occasions when you choose to schedule a security deposit hold or RDD manually. You can do that by navigating to the specific Booking > Transactions > Security Deposits > Schedule Security Deposit. You can also click on the Schedule dropdown list and select Schedule Security Deposit.
On the Schedule Credit Card Hold page, you can switch to a Refundable Deposit (RDD), determine the Deposit Amount, and When to collect it. You can also choose which guest credit card to use or Enter a new card. Click Save.
Extending
The security deposit hold will be automatically released at the number of days specified in the Released setting but users have the option of security deposits manually as well.
Users should pay close attention to their own payment processor's maximum length of time a security deposit hold can be held because extending a security deposit hold will not stop the auto-release of the hold from happening after the alloted time (per the table) has lapsed.
However, there may be cases where users know they will have to charge guests for any unexpected damage but need to hold the card longer while they assess the damage costs. In this case, users can extend the security deposit hold.
Users can extend the security deposit hold by up to an additional week by clicking on the Security Deposit Hold > Change, then selecting a time frame from the Extend drop-down list (e.g., An extra day, An extra 3 days, An extra 5 days, An extra week).
Users will continue to receive system alert email reminders before the security deposit hold is released.
Releasing
The security deposit hold will be automatically released at the number of days specified in the Released setting. In most cases, you can just let OwnerRez take care of releasing your security deposits for you; you don't have to do it manually.
On the booking cancellation screen (for direct bookings and Vrbo) within OwnerRez, if a Security Deposit has been held prior to a cancellation, it will give you options for how to handle it:
However, Airbnb cancellations do not offer that screen during cancellation. After a reservation is made on Airbnb, the Security Deposit will need to be manually released if a cancellation occurs. This is for your protection as an Airbnb host, if you were to cancel a booking on the day of arrival and the guest caused damage prior to cancellation, the hold would not be auto-released, allowing you to still collect against the security deposit if necessary.
If you want to release a security deposit early, you can do that by clicking on either of the links (Release it now or Open this security deposit) in the email notification while the security deposit is active (after the hold has been placed.).
Click on Release.
On the Finalize Security Deposit page, click Release Now.
The Send Security Deposit Email editor will open, allowing you to send a notification to your guest that their Security Deposit Hold is being released.
Security Deposit Hold Time Limit
What's the maximum length of time a security deposit hold can be held? Here is a general guide to the maximum time security deposit holds can last, but there are always exceptions:
| Ascent |
30 days, renewed automatically. |
| Authorize.net |
30 days, renewed automatically. |
| Braintree |
7 days, renewed automatically |
|
Converge/Elavon (Costco) |
21 days, renewed automatically |
| Lynnbrook Group |
14 days, renewed automatically |
| Lynnbrook Classic | 7 days, renewed automatically |
|
PayPal |
30 days Cannot be renewed. A new hold can be requested from the guest. |
|
Stripe |
7 days (5 days for Visa-branded cards), renewed automatically. For more information, see the Security Deposit Holds section of the Stripe support article. |
| All others |
7 days, renewed automatically. |
If a renewal fails, OwnerRez will try again the next day.
Charging Against
Normally, the entire security deposit should be released. When there is damage, though, you may want to charge the deposit for all or part of the hold amount.
This is done in exactly the same way as releasing the deposit, so follow the instructions given above. On the Finalize Security Deposit page, the default setting is to release the entire amount. But you also have options: keep the entire amount or keep a specific or partial amount and release the rest.
With either of these two options, a charge will be placed against the hold, and the hold will be released. Since the hold was put in place earlier and confirmed by the bank, the charge will be automatically approved - it won't have to re-run the credit card, and will be valid even if the card has been cancelled or the credit limit has been reached.
The page also prompts you to send emails to the guest. We recommend that you clearly specify your reasons for retaining the security deposit in your email and provide any available evidence (photos, receipts, etc.). This will be important if the guest disputes your charge with their credit card company. Even more importantly, if it looks like you have overwhelming evidence, the guest may not bother disputing it with their credit card company, which you'd really prefer they didn't do.
PM Accounting
If you are using the OwnerRez Property Management premium feature, you can choose whether to credit the amount kept to the owner, to the PM, or to split it between the PM and the owner.
For any amount kept by the PM, rather than paid to the owner, an expense will be created for that amount.
Refunding
Sometimes, you'll take money from a guest's security deposit to cover damages, only to discover that there was a mistake or misunderstanding and that the money should not have been taken.
Unfortunately, at present, OwnerRez does not have the ability to cancel or refund money that was taken from a security deposit hold. You will need to do this via the control panel or dashboard of your credit card payment processor.
Airbnb
Airbnb lets you hold a security deposit from your guests. However, there's a quirk: they don't transmit the guest's credit card information to us, so OwnerRez has to obtain it directly from the guest.
You can activate security deposit holds in your Airbnb channel integration > Security Deposits > Mode setting.
Then, under the House Rules, make sure you mention that a security deposit will be reserved, the amount, and that you, the host, will process it on the guest's credit card. Ex. Security deposit required of $XXX. Deposit to be processed by the host on the guest's credit card.
If you encounter security deposit questions from your Airbnb guests, see our OwnerRez Security Deposit Holds with Airbnb support article.
Why not just use the Airbnb option?
Airbnb supposedly does do security deposits, but they don't really - they don't actually take money or place a hold, and they don't let you collect it without their approval and the guest's permission. So it's really no different than the regular resolution center requests, and rarely pays out to you.
With our real security deposit holds, you have direct access to the guest's credit card, and you can collect whatever damages are appropriate. The guest can challenge that via chargeback, of course, but at least that puts the ball in their court, and Airbnb isn't involved at all.
Turning on this feature in OwnerRez will apply to all future Airbnb channel-integrated bookings only. It will not add a security deposit requirement to any pre-existing bookings, because they've already agreed to your terms without it.
There are two ways to get the necessary credit card information directly from the guest, since Airbnb doesn't provide it to you:
Built-In Collection
If you have already configured OwnerRez to use security deposit holds for your direct-book and/or Vrbo channel-integrated guests, you'll be able to see your security deposit settings in your Property > Rules > Security Deposits section, such as:
- Type of Security Deposit (Hold, Refundable, or No automatic security deposits)
- Amount
- The guest reminder
- The number of days before arrival during which the hold will be taken
- The number of days before departure that the hold will be automatically released, if you haven't already manually released it by then
If you have the Guest Reminder selection turned on - and you should - then when it's time to reserve the security deposit hold, OwnerRez will automatically notice that you don't have a card on file for the guest and send them a message asking for one. When the guest provides it, the hold will automatically be taken. If the guest does not respond, we'll have no card, and thus no hold - you'll have to take manual action.
Email Templates
For more information, see our Request Guest Sign Renter Agreement Template and Trigger support article. When implemented, this process includes scheduling the guest's security deposit.
Display
During the Airbnb checkout process, guests will see the following as shown below stating that this property requires a security deposit that will be collected separately.
While this does meet Airbnb's requirements, and they say they'll enforce it if guests don't comply, this is nevertheless pretty obscure and easy to miss. So it is strongly recommended to specifically state your security deposit in your Airbnb channel integration House Rules. That gives guests two opportunities to see and obey the requirement so they aren't surprised by it.
Also, your security deposit must be at least $ 100 USD and no more than $ 5,000 USD.
Booking.com
Normally, Booking.com handles all guest payments, much like Airbnb. The Booking.com channel integration syncs security deposits (Amount, Collect when), and hosts can reach out to guests to get their card information, as is done for Airbnb, through a combination of using Built-In Collection or Custom Email Templates. If you don't do either, OwnerRez won't have any way to get the credit card information, so it won't be able to take a security deposit hold.
Vrbo/HomeToGo
Vrbo and HomeToGo (HTG) fully support taking security deposit holds on the guests' credit cards. Because both channels send OwnerRez the full guest credit card information, the holds can be fully automated.
There are two ways to show the secdep requirement to the guest: a) as a "security deposit collected at the property" (the default) or b) as a house rule. The "security deposit collected at the property" can confuse guests (since the hold is actually just taken on the card), so we have an option to turn off that display if you're showing the amount in your house rules instead
To switch to house rule mode, navigate to Settings > Channel Management > Channel Integrations, select the Vrbo or HTG channel integration, then click Change. On the Edit Channel > Credit Card Payments > Security Deposit section, select the second option, "Don't show in Vrbo guest charges. Instead, I have stated the security deposit hold and amount in my house rules." Channel Management > Channel Integrations, select the Vrbo or HTG channel integration, then click Change. On the Edit Channel > Credit Card Payments > Security Deposit section, select the second option, "Don't show in Vrbo guest charges. Instead, I have stated the security deposit hold and amount in my house rules."" />
OwnerRez will automatically use your property security deposit hold settings for all channel-integrated bookings.
Then, under the House Rules, ensure that you require a security deposit to be reserved, its amount, and that it will be processed by you, the host, on the guest's credit card. Ex. Security deposit required of $XXX. Deposit to be processed by host on guest's credit card.
If you have different amounts for different properties, there are two ways to handle this:
a) Use language such as "up to" the maximum amount any of your properties are set to.
OR
b) Set individual Vrbo house rules on the Channel Rules tab of each property so each one can have different values.
Even though the setting says Vrbo, it will apply to both Vrbo and HTG since their systems work the same way.
If you add this statement, Vrbo and/or HTG will consider that you have legitimately notified your guests of this requirement and will allow the security deposit to be enforced. OwnerRez will take care of that automatically, as with any other booking. Here's what it looks like to the guest in Vrbo's booking interface. 