Sec. Dep. Escrow Acct.
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Sec. Dep. Escrow Acct. (by TonyT [PA]) Jul 7, 2018 10:39 AM
       Sec. Dep. Escrow Acct. (by David [NC]) Jul 7, 2018 10:56 AM
       Sec. Dep. Escrow Acct. (by Still Learning [NH]) Jul 7, 2018 11:04 AM
       Sec. Dep. Escrow Acct. (by Nicole [PA]) Jul 7, 2018 11:09 AM
       Sec. Dep. Escrow Acct. (by Hoosier [IN]) Jul 7, 2018 11:14 AM
       Sec. Dep. Escrow Acct. (by Tom [FL]) Jul 7, 2018 1:28 PM
       Sec. Dep. Escrow Acct. (by JB [OR]) Jul 7, 2018 1:28 PM
       Sec. Dep. Escrow Acct. (by TonyT [PA]) Jul 7, 2018 1:28 PM
       Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Jul 7, 2018 2:15 PM
       Sec. Dep. Escrow Acct. (by AllyM [NJ]) Jul 7, 2018 2:19 PM
       Sec. Dep. Escrow Acct. (by Ed [PA]) Jul 7, 2018 2:33 PM
       Sec. Dep. Escrow Acct. (by Mickie [OH]) Jul 7, 2018 4:05 PM
       Sec. Dep. Escrow Acct. (by Robert J [CA]) Jul 7, 2018 7:26 PM
       Sec. Dep. Escrow Acct. (by Steve [MA]) Jul 8, 2018 3:49 AM
       Sec. Dep. Escrow Acct. (by WMH [NC]) Jul 8, 2018 4:51 AM
       Sec. Dep. Escrow Acct. (by myob [GA]) Jul 8, 2018 6:34 AM
       Sec. Dep. Escrow Acct. (by TonyT [PA]) Jul 8, 2018 6:53 AM
       Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Jul 8, 2018 3:47 PM
       Sec. Dep. Escrow Acct. (by Wilma [PA]) Jul 9, 2018 2:39 PM
       Sec. Dep. Escrow Acct. (by TonyT [PA]) Jul 9, 2018 4:00 PM
       Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Jul 9, 2018 7:22 PM
       Sec. Dep. Escrow Acct. (by Steve [MA]) Jul 10, 2018 2:55 AM
       Sec. Dep. Escrow Acct. (by razorback_tim [AR]) Jul 10, 2018 3:23 AM
       Sec. Dep. Escrow Acct. (by RentsDue [MA]) Jul 10, 2018 3:52 AM
       Sec. Dep. Escrow Acct. (by Scott Ballet [MA]) Jul 11, 2018 7:21 PM

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Sec. Dep. Escrow Acct. (by TonyT [PA]) Posted on: Jul 7, 2018 10:39 AM
Message:

Hi Everyone, I just found out after 20 years of landlording that in PA all security deposit money must be held in a separate escrow account and may not be co-mingled with your personal checking accounts.

What kind of account do you use? Do you just open up a new account at your bank, or do you need to ask the bank for some special "escrow" account?

Escrow usually means "a third party" ...but a bank account that only I have access to isn't technically escrow ...so I'm not getting this. --73.52.xx.xxx




Sec. Dep. Escrow Acct. (by David [NC]) Posted on: Jul 7, 2018 10:56 AM
Message:

North Carolina has the same law but no one seems to follow it. That said, I opened a business checking account that says Peter Properties Escrow and the only thing I put in there is the security deposits. When the time comes to return the security deposit I will write a check to the tenant out of that account. Get new tenants to write you two checks, one for Peter Properties and one for Peter Properties Escrow. --65.188.xxx.xxx




Sec. Dep. Escrow Acct. (by Still Learning [NH]) Posted on: Jul 7, 2018 11:04 AM
Message:

I have one savings account for each building titled Smith St Security Deposit. Only security deposits come in and out of it. The bank used to do checks from the account to the tenant but now that there is a charge I transfer the amount to checking and write a check for the same amount to the tenant on the same day and pop it in the mail. I figure if it is ever questioned the paper trail will show it sat in an account that was not an operating account and then was in and out same day in order to write the check. --24.61.xxx.xx




Sec. Dep. Escrow Acct. (by Nicole [PA]) Posted on: Jul 7, 2018 11:09 AM
Message:

I buy a 12 month CD with each security deposit. should they be there more than the 2 years, the interest computation (such as it is) is easy. --72.70.xxx.xx




Sec. Dep. Escrow Acct. (by Hoosier [IN]) Posted on: Jul 7, 2018 11:14 AM
Message:

I don't think we have that law in Indiana. If we do, I'm not aware of it. --99.92.xxx.xxx




Sec. Dep. Escrow Acct. (by Tom [FL]) Posted on: Jul 7, 2018 1:28 PM
Message:

TonyT of PA, you may want to get a copy of the PA Landlord Tenant Law and read over it about how the security deposit is handled and if any interest is paid on the security deposit.

--99.56.xx.xx




Sec. Dep. Escrow Acct. (by JB [OR]) Posted on: Jul 7, 2018 1:28 PM
Message:

For your purposes, any separate checking or savings account for deposits should suffice. --50.45.xxx.xx




Sec. Dep. Escrow Acct. (by TonyT [PA]) Posted on: Jul 7, 2018 1:28 PM
Message:

Tom (FL): Yes, I have done that. thanks. --73.52.xx.xxx




Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Posted on: Jul 7, 2018 2:15 PM
Message:

The premise is that the SD or escrow is not your money. It belongs to the tenant and cannot be accessed by either party until the tenant vacates the premises regardless of the circumstances.

NC requires a separate trust account for SD but not all states do while others allow a bond. Interestingly there are states that do not require them but certain municipalities with the same state does require them. The separate account should should be named as such to clearly differentiate it from a regular checking account.

For those that deposit the funds in their general operating account the funds will be treated as regular income so you are paying taxes on money that is not yours. Interesting concept. --71.75.xx.xx




Sec. Dep. Escrow Acct. (by AllyM [NJ]) Posted on: Jul 7, 2018 2:19 PM
Message:

Just go in and tell the bank person behind the desks that you want a landlord tenant account. They don't charge for them and do pay a small interest. You will be the custodian and will receive a statement every so often. You have to let the tenant know before taxes that there is a little bit of interest. --73.178.xxx.xx




Sec. Dep. Escrow Acct. (by Ed [PA]) Posted on: Jul 7, 2018 2:33 PM
Message:

By law supposed to have a separate account that pays interest after two years and can charge a service fee against the SD. I can say that I have never followed that portion of the law and I haven't met anyone that did.

In 28 years I had one tenant ask for interest on the SD because I deducted some damages. He was disappointed when he found that interest added up to $20 over 6 years using my banks interest rate. --72.95.xxx.xx




Sec. Dep. Escrow Acct. (by Mickie [OH]) Posted on: Jul 7, 2018 4:05 PM
Message:

I don't do security deposits anymore. I use move in fee. It's just a little under a months rent. I also tell them how they can make money when they move out (that's where the cleaning list comes in). --71.213.xx.xxx




Sec. Dep. Escrow Acct. (by Robert J [CA]) Posted on: Jul 7, 2018 7:26 PM
Message:

When interest rates on savings accounts and CD's were 5% or more, I'd bank the money in a high yield account and each year pay my tenants the earned interest.

But when rates fell to a tenth of a percent, I then put the money into a interest bearing account earning nothing. Why? Because here in California, we can pay the tenant the actual rate received.

This way I have to do no accounting..... --47.156.xx.xx




Sec. Dep. Escrow Acct. (by Steve [MA]) Posted on: Jul 8, 2018 3:49 AM
Message:

I've found that at least in my area credit unions are much more accommodating than big banks & even smaller local banks at providing & dealing with user friendly escrow accounts for tenant's SDs. --71.174.xx.xx




Sec. Dep. Escrow Acct. (by WMH [NC]) Posted on: Jul 8, 2018 4:51 AM
Message:

Before we set up the LLCs I had a separate free checking account for each unit. Easy to reconcile but eventually a lot of accounts and statements! Now I keep a business money market savings account for each LLC's set of security deposits.

NC also allows a LL to purchase an insurance bond for the deposits, but I can't find a single insurance company who sells these or even knows what they are. Why it is spelled out so specifically in our laws I don't know. --50.82.xxx.xx




Sec. Dep. Escrow Acct. (by myob [GA]) Posted on: Jul 8, 2018 6:34 AM
Message:

In GA if you have more than 10 proeprty's you must place in escrow account and let lease signers know account info. Which is part of our lease. No interest needs to be paid to tenant on the account.

Here is a problem though. we are not Realtors or lawyers and the bank won't allow us to open a security account/ aka escrow account. Escrow acounts are regulated by state law for RE agents and Lawyers.

Sooooooo we opened an account and the name of the account is "company name" follwed by the title escrow account. It's not an escrow account-- just the name is escrow.

You can also get a surity bond--- when we inquired about how and where to get this bond-- no one knew? --99.103.xxx.xxx




Sec. Dep. Escrow Acct. (by TonyT [PA]) Posted on: Jul 8, 2018 6:53 AM
Message:

Thanks for all the replies!!

Yes, the law in PA says "escrow" account, but it seems intuitive to me that if a landlord opens an account, it's not an escrow.

I'll probably just open one up and call it "escrow."

-TonT --73.52.xx.xxx




Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Posted on: Jul 8, 2018 3:47 PM
Message:

MYOB: My bank has no idea I am licensed. I told them I needed a trust account for SD's and they just opened it. Asked the name for it and they added Trust to the end.

I know GA has some unusual laws but this is fairly universal.

WMH: Most of the big multi's use bonds at least here they do which is why so many only require $100 SD. No one small enough to handle us are familiar with them and we are too small to get it from the large insurance/bond companies.

You don't have to handle it. You can give it to an atty. Fairly common practice here when selling. All earnest funds are handed over to the attorney saves brokers a ton of paperwork.. --71.75.xx.xx




Sec. Dep. Escrow Acct. (by Wilma [PA]) Posted on: Jul 9, 2018 2:39 PM
Message:

TonyT - any reputable bank can open a LL/tenant escrow account for you. I use PNC bank - there is no charge, and I get a quarterly statement. Interest is pitiful, but I've followed instructions.

BTW, I HAVE had a tenant challenge me as to where the SD was being held, (and fortunately it was in an escrow account, which shut him up) - so just do it. The bank will require that the tenant fill out a form, giving his S.S. # directly to the bank - they won't accept it from you.

Oh, and then there is the silly part of the PA LL/tenant law that says that you have to give the tenant the interest earned, but can retain (I think) 10% for your expenses. Pssh. Like I'm going to keep 10% of $1.79 in interest over 4 years...

--71.175.xxx.xxx




Sec. Dep. Escrow Acct. (by TonyT [PA]) Posted on: Jul 9, 2018 4:00 PM
Message:

Wilma,

Yes, it's 1% that the landlord gets to keep. And just to clarify, I found that the landlord must give the tenant the interest (minus the 1%) every year, but only if the renter rented for over 2 years.

I just went to my Credit Union and they said they refuse to let me open a second personal checking account! They said it's because I'm using it for business. But I am not a business I told them. The IRS doesn't consider me one and local and state neither. So I said, "Well, I'm depositing my rents into my personal account ...are you going to close that?" They did!

So now I'm pissed. --73.52.xx.xxx




Sec. Dep. Escrow Acct. (by NC INVESTOR [NC]) Posted on: Jul 9, 2018 7:22 PM
Message:

Thankfully NC discourages using interest bearing accounts since they cause too many debates. And we are responsible for any bank fees.

WILMA I have never heard of a bank requiring the SS or EIN for any of the SD's I deposit. The check is made out to the LLC so not sure why they need the tenants info. --71.75.xx.xx




Sec. Dep. Escrow Acct. (by Steve [MA]) Posted on: Jul 10, 2018 2:55 AM
Message:

NC Investor, my Credit Union has the tenant fill out a form so all of the tax info goes directly to them. Since it's the tenant's money, I don't know how having the account in your LLC gives them any protection form yours or your LLC's creditors. --71.174.xx.xx




Sec. Dep. Escrow Acct. (by razorback_tim [AR]) Posted on: Jul 10, 2018 3:23 AM
Message:

Here I maintain a separate bank account where all deposits are held. It my case it's a MM account that I can write checks on. As long as you aren't required to keep each deposit in its own separate account something like this should work for you. --70.178.x.xx




Sec. Dep. Escrow Acct. (by RentsDue [MA]) Posted on: Jul 10, 2018 3:52 AM
Message:

Same law here. All SDs are set up in seperate escrow accounts. The idea behind it is that is has to be an account set up with tenants SS# because it is their money. That keeps it clear from your creditors reach. If you do it wrong you risk not being able to deduct from it ( or returning 3x) if judge says so. --71.10.xxx.xxx




Sec. Dep. Escrow Acct. (by Scott Ballet [MA]) Posted on: Jul 11, 2018 7:21 PM
Message:

I have always held security deposits (and last months' rent) in a tenant escrow account. No problem with my bank (they do it as a passbook or statement account). I thought that was how everyone did it. In Mass. we are supposed to give our tenants the interest on their security deposit and last months' rent each year of their tenancy. I send the $1.33 or whatever with their Holiday card and local restaurant gift certificate (if their on Santa's good list). --71.174.xx.x



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