FAQs about VASP
Q. Is the program mandatory or voluntary?
VASP is a voluntary program. At the lease commencement, the tenant will be given the option of remitting a traditional security deposit or participating in the VASP program.
Q. Is the program available to existing tenants who have already given a security
The program is available to existing tenants who are current on their rent. Existing tenants will receive A RETURN OF THEIR SECURITY at the time of opting into the program. They will also be required to sign a rider to their existing lease obligating them to pay the monthly remittance for VASP which will be under the same terms and conditions as new tenants.
Q. What if I leave before the 5 years? Do I still have to pay into the program if I move?
There is no continuing obligation if you move. Once you move your obligation to pay for the full five year term ends. For example if you had a rent of $1,000, and you moved out after 2 years, you would have only paid $367.92 ($15.33 x 24months), far less than the traditional amount of $1,000 in security.
Q. What happens if I stay more than 5 years? Will I have to pay more?
No. The MAXIMUM a Tenant will ever pay is 92% of the amount they would have paid with traditional security.
Q. What happens if I transfer to another apartment in the same building or to another building owned by the landlord that is participating in the VASP program.
You will receive credit for all remittances previously paid on the “old” apartment. The amount of new remittance due will be calculated based on the rent for the new apartment. Thus, if your rent is less on your new apartment the remittance will be less. If the rent is greater, the remittance will be greater. However, if you moved after 2 years, you would only be obligated to pay remittances for an additional 3 years or the time that you remain a tenant, whichever is less.
Q. If a Tenant moves owing no rent and no damages, do they get any money back?
No. The amounts paid are to reimburse the Landlord for its costs of the program.
Q. What happens when a tenant vacates owing rent and/or damages?
The Landlord will make a claim to the insurance company for the damages. Any damages in excess of two month’s rent will remain the responsibility of the Tenant. The likelihood of litigation or collection cases will be substantially reduced because the landlord in most cases will be made whole. There will be a provision in the insurance policy and in the rider to the lease that the insurance company, if they pay claims, only subrogates to the Landlord’s claim for claims in excess of two months for damages.
Q. What happens if the insurance company goes out of business? Is there any risk to the Tenant?
The Tenant is never at risk. If something happens to the insurance company such that it goes out of business or fails to make payments, then the Tenant would receive credit for all remittances paid and would only be obligated to remit the difference as traditional security.
Q. What happens if the building is sold or transferred to another owner? Will the tenant have to pay security to the new Owner?
Again, if this occurs prior to five (5) years, then the Tenant would receive credit for all remittance paid and the new Owner would only be allowed to collect the difference as security. This will be memorialized in the lease rider. If the tenant has fully paid (after 5 years), then there will be no new obligation to pay security. This will be a provision in the lease that will be binding on a new owner.