Thread: proceeding with rental contract

Hi,

I have finally come to an end with negotiations for a villa I would like to rent on a 2 year basis. The owner now wants one third of the full amount (full amount=two years rent) upfront as a deposit, the rest once I have signed the contract. He will only start setting up the contract once I have transferred the money.

Is this the normal procedure? I am worried to transfer such a big amount to someone I barely know, without a contract or anything. Do they usually give some sort of security? if so, in what form?

Any help on this matter much appreciated!

Hell no, you're going to send some random local guy money with no legal contract. Did you realize if he decided to keep your money there's nothing you can do about it. Bali is full of scam artist, this guy sounds like one of them

Hi, yes thanks. Its my thinking as well. I wonder what the normal proceeding would be though. no advance payment???

Thanks Mimpimanis, this is of great help. One last question, who did you pay the 20% deposit to? The owner? or any other party involved?

Originally Posted by mango

Hi,

I have finally come to an end with negotiations for a villa I would like to rent on a 2 year basis. The owner now wants one third of the full amount (full amount=two years rent) upfront as a deposit, the rest once I have signed the contract. He will only start setting up the contract once I have transferred the money.

Is this the normal procedure? I am worried to transfer such a big amount to someone I barely know, without a contract or anything. Do they usually give some sort of security? if so, in what form?

Any help on this matter much appreciated!

Hi

I am renting out my place for 8 years, and I have been wondering how to do it once I get someone to take over the lease.

How do I feel secure proceeding with the legalities and the costs involved in having proper contracts drawn up, yet make the new lessee feel secure too?

I have come to the conclusion that i will ask them for a deposit that is enough to pay the fees incurred setting up the contract.

So around 1.5% of the total deal

That way, if they back out, I'm not out of pocket and if they proceed , then when we both sign the contract they pay the full balance (same time as contracts are signed) and they receive the contract and the keys to the property


There is absolutely no justification for the landlord to ask you for 30%.... your instincts are telling you something, so listen to them

Whatever the total amount is for 2 years, if he's having a proper notaris contract done (which you should organise if he doesn't), then offer him a `1.5 % deposit to cover his Notaris costs and then full amount upon signing

That way if you dont proceed, he has lost nothing but a tenant and you have lost the notaris fee, as you should if you bail on him. Hardly a big risk for you

If he doesn't want to do that Id be very concerned. Why will he not even draw up the contract until you pay a full one third of two whole years?

He has nothing at all to lose if you hand him 30%... in fact its in his better interest to bail on you and re rent to someone else, or pull the same stunt

You will never get the deposit back if he rents to someone else. They never hand anything back... ever

With that said, he may just want to make sure YOU don't bail... but that's his problem... you offer him enough to cover his contract expenses and if not, I suggest you may want to keep looking.

He cant lose his house, but you can easily ... in a heartbeat... lose your 30%

You can also offer to have the contracts drawn up by your own Notaris and pay the Notaris fees. His reaction to that will be very enlightening

Regards
N

Originally Posted by mimpimanis

I have never had a notaris contract when renting. Only a contract drawn up by the owner and signed by both of us.

Until this house, neither did I, but I paid 10 years up front and was also spending more than 250 juta on a complete gutting and renovation so the thought of doing it without a proper land lease made me a bit ill. It was a nerve wracking process until I finally received the processed lease in my name, but it's all properly registered with the correct authorities and for the investment I made doing it any other way would have been crazy

I know of people who've paid for 2 and 3 years on a house and then the owner sells and the little letter/contract with the 6000 rupiah stamp did not stop them from getting booted out halfway through their rental... nor did it give them any of the balance of their advance rent back

The suggestion of a notaris was to test the landlords intention (its good to watch how their face reacts) as the only cost he could possibly incur that require a deposit before drawing up a contract, are Notaris costs.

Personally if I were ever to rent here again, I would definitley get a Notaris to do the contract even if it was for only 1 year. Mine charged 1.5 % of the rental which was a bargain considering the security a proper lease agreement brings

30% deposit request prior to any documents being signed just seems so dodgy and the "I wont draw up the contract til you give me 30%" had instant alarm bells ringing for me

If it looks like a duck and quacks like a duck... it's probably a duck

Thanks to all of you for the great replies. I suggested 1.5% to him and he was laughing at me, telling me this is not normal in Bali and its unreasonable blalalbla. So I gave up, told him to find someone else. Only now I have to start from scratch again and find another house, ufffff