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Does Padder replace my Last Month’s Rent deposit?

It depends which Padder product you’re using.

Padder Guarantor: does NOT replace your Last Month’s Rent (LMR) deposit

  • It’s a contractual liability insurance policy that acts as your guarantor to help your landlord feel comfortable approving your application.
  • Padder Guarantor protects your landlord for unpaid base rent and certain default scenarios (up to the policy limits).
  • You may still be required to pay a traditional LMR deposit to your landlord, if that’s their standard practice and allowed by local law.

Padder Deposit: DOES replace your Last Month’s Rent (LMR) deposit

Padder Deposit is specifically designed to replace a traditional Last Month’s Rent deposit where the landlord has enabled it for the building. This lowers your barrier to entry while providing insurance protection for your landlord if you default on your last month's rent payment. 

In those eligible properties:

  • Your landlord does not collect a LMR deposit from you.
  • Instead, you pay a smaller one-time Padder Deposit premium.
  • Padder then protects your landlord for your last month’s base rent only if you move out without paying it.
  • The policy stays in effect for the length of your tenancy, including if your lease moves to month-to-month, until you move out.

You still:

  • Pay all your regular monthly rent, including your final month.
  • Are required to repay Padder if Padder pays your landlord for that unpaid last month’s rent (subject to the policy terms and conditions).

How LMR and Padder coverage work together where both exist

You might see a few different combinations:

  1. Padder Guarantor + traditional LMR (no Padder Deposit)
    1. You pay a traditional LMR deposit to your landlord.
    2. You also purchase Padder Guarantor to help you qualify for the lease.
    3. At the end of your tenancy, your landlord applies the LMR to your last month’s rent as usual.
    4. Padder Guarantor is there only if you default on your lease obligations during the term and there’s a covered loss.
  2. Padder Guarantor + Padder Deposit (no traditional LMR deposit)
    1. You use Padder Guarantor to help secure approval.
    2. Your landlord also accepts Padder Deposit, so they do not collect a traditional LMR deposit.
    3. You pay:
      1. A one-time Guarantor premium (typically between 30% to 130% of one month's rent), and
      2. A one-time Padder Deposit premium (typically between 10% to 15% of month month's rent).
    4. Guarantor covers broader base-rent default scenarios (up to policy limits).
    5. Deposit covers just the last month’s base rent if you leave without paying it.
  3. Padder Deposit only (no Guarantor, no traditional LMR deposit)
    1. You qualify for the lease on your own.
    2. The landlord offers Padder Deposit instead of a traditional LMR deposit.
    3. You pay the Padder Deposit premium, and your landlord relies on Padder for your last month’s base rent if you don’t pay it.