I will be opening my day home soon and just working on the contract. Does anyone else do a refundable deposit? My husband and I have two rental properties and we return the deposit at the end as long as they give us notice. I am thinking of doing the same with my daycare. The only way I would keep the deposit is if they decide to go somewhere else before the start date or if they leave early without giving notice. I'd really appreciate your feedback!!
Your deposit is like your last months rent. It is there to protect you. It is normally used for last 2 weeks/month of daycare. But typically is non-refundable.
It is your business so it is up to you how you run it. But I would make sure you have it written in your contract very clearly what will happen if they leave before care starts etc.
Personally I wouldn't have it refundable. I don't charge a deposit. I charge an enrollment fee that can go towards their last two weeks of care. But they have to stay for more then 52 weeks (1 yr) in order to use it. If they are temporary than it goes towards securing the spot (I will not replace them with a long term family). My enrollment fee is non-refundable. All my fees are non refundable.
I don't understand your intent here. How will it be refundable? Typically the deposit is held to cover the last 1-2 weeks of care. If you make it refundable then you are giving them 1-2 weeks of care pay back but then they have to pay you for those same weeks. What is the purpose?
By making it non-refundable, non-returnable you are essentially making it known that the deposit is held until their finally weeks of care, if they up and leave then you keep it if they give their required notice you apply it to those weeks of care. I would think by making it refundable then they can simply demand it back at any time and leave...leaving you without your paid notice period.
I see no reason or benefit to you in making this refundable.
The only reason I was thinking of having a refundable deposit was because I am asking for post dated cheques for the first of every month anyways. Thanks for your input though, I think I will charge a two week non refundable deposit that can be applied to their last two weeks
Even with the postdated cheques I require a non-refundable deposit. It is there to protect you. If for what ever reason you decide to return a deposit you are allowed to...but the non-refundable deposit may still be needed to protect you at some point.
One thing to consider, unlike collecting rent which is monthly, collecting fees biweekly does mean a greater income on an annual basis. I would strongly suggest switching to biweekly fees. Otherwise, ensure that your monthly fee is representative of the number of days to be worked that month and not just a set fee. I believe you lose the equivalent of 2 full weeks pay by charging a set monthly fee. Long term...it adds up!!
I ask for a refundable deposit that goes towards their last month fee and they pay me post-dated cheques so I am not running after them for my fees on the 1st of each month