Updated about 16 years ago on . Most recent reply
LLC and the security deposit
For those that own multiple LLCs, how do you handle the security deposits? In my state the law is the deposit is supposed to be held in it's own bank account and not comingled with any other monies. That could become a bit difficult to manage if you owned multiple LLCs, each with 2 bank accounts (one for the rents, the other for the deposit).
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Some banks now have landlord accounts for escrow purposes. You'll have to ask around for that. Basically there is some sort of a "master" account, and each tenant can be added as a "sub-account". The tenant's SSN (from the W9 form) can be attached to their sub-account so that any interest that accrues is credited to that tenant for income tax purposes. Certain people can be designated as the account managers, and they will be able to deposit and withdraw funds. Sometimes it is set up so that all of the cash going in and out of a sub-account flows through the "master" account.