State Specific Question About: MISSOURI (MO)

As of August 28, 2016, all security deposits from non-broker property managers and landlords must be held in a trust that contains no co-mingled funds (like interest gained on the deposits). Does anyone know how to inexpensively set up a trust? Does a lawyer need to be involved to set it up? Also, the bill says that a trustee must be notes on the depository account at the bank. If I am a one-man band, do I need to pay someone to be a trustee? Thank you for your help. Ref: Missouri House Bill 1862

Fun, more BS thanks to the state.

I keep a separate account for my deposits, but it is not in a trust. Now for more paperwork. Yuck.

Time to move to the same wording the largest rental agency in my area uses and go with a move in FEE rather than a deposit.

Now to get my niece, who rents from them, to give me a copy of what she agreed to. :)

Barb, I was thinking the same thing. Every time the Govt does something to "protect" the tenants, I find creative ways to get around it and/or profit from it. Move-in fee is one option, or I've also considered a sliding scale deposit.

Rent: $500, Deposit: $500.

Rent: $525, Deposit: $350.

Rent: $550, Deposit: $200.

Rent: $600, Deposit: $0.00

Granted, the first three won't help me bypass the new requirement, but the middle two will at least help compensate me for the added hassle.

Deposits are dangerous in a way. I think back when I was a newbie land lord, I used to think, "Well, I won't file eviction just yet...Joe is only 7 days late and his deposit equals a month's rent...so I'm 'safe' to wait another week." B.S.! I'd end up evicting Joe and the deposit was nowhere near enough to cover lost rent, legal costs, and damages. I would also sometimes overlook some pretty obvious negatives during screening because "I had a deposit."

Wow! I had no idea. Glad I read the board. The state must have been pressured by the lawyers on this one.

One thing about this. I used to maintain a trust account for earnest money. One of the problems with that was that you needed both parties signature to disburse money. Eventually, we had title companies hold the money. But even there again, the money was not disbursed until both parties agreed. As you may imagine, getting both parties to agree may be a problem at a time of dispute. I suppose it could be possible that a court action would be required if landlord and tenant aren't in agreement.

is that HELD in TRUST

or Held within a trust.

Update on my attorney's advice:

"Just set up a separate account and call it a trust account, or an escrow account if they will not let you title it that way."

Just set up a separate account and call it trust, most bank accounts pay so little interest these days I wouldn't worry about it.

I'm the original poster-- to clarify, here is the wording of the House Bill 1862 in part and is for every landlord who is not a real estate broker:

All security deposits shall be held by the landlord for the tenant, who is a party to the rental agreement, in a bank, credit union, or depository institution which is insured by an agency of the federal government. Security deposits shall not be commingled with other funds of the landlord. All security deposits shall be held in a trust established by the landlord and deposited in a bank, credit union, or depository institution account in the

I spoke with a great reliable source today who stated that their attorney noticed there is no penalty or verification process to ensure this is done. So, for now it should be ok to keep it in a separate bank account. I'm just concerned that this may be a warning of things to come.