Security Deposit Holds

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
  • PM Accounting
• Refunding
• Airbnb
• Booking.com
• Vrbo/HomeToGo

Configuring

Security deposits are configured in the Property Rules.

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.

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:

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 allows a security deposit from hosts connected through select software, like OwnerRez, when it's included in the listing's fee field and released in full within 7 days of checkout (Airbnb help article 2799).

How OwnerRez handles it:

• Turning it on or off: You choose whether Airbnb guests get a deposit on each property under Properties > [property] > Rules > Security Deposits > A security deposit is required for. New properties and new Airbnb connections start with Airbnb excluded, so remove Airbnb from the exceptions to take deposits from Airbnb guests. See Contact Info and Security Deposits.
• The amount: OwnerRez sends the property's deposit amount to the Airbnb listing as its security deposit fee, within Airbnb's range of $100 to $5,000.
• The guest: Airbnb guests authorize the deposit while completing the My Stay (guest portal) after booking, after confirming their contact info.
• Releasing it: OwnerRez releases the hold automatically after the number of days you set under Release Days on the property's Security Deposits rules. Use 7 days or fewer to follow Airbnb's policy.
• Excluding Airbnb: This is optional, since Airbnb allows security deposits. Exclude Airbnb only if you don't want to take a deposit on Airbnb bookings. Airbnb bookings then don't get a deposit, and the Airbnb listing doesn't show the deposit fee.

Bookings already made keep their deposit. To change upcoming bookings too, use Apply rules to other properties with Update Bookings checked.

Guests see a note at Airbnb checkout that a deposit is collected separately, but it's easy to miss. Mention the deposit in your House Rules text too, so guests see it before they book. See Airbnb House Rules.

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.

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.