How should a escrow account be created when there are two people on a lease (two friends staying in a 2BR condo). The bank says only one tenant can be on a escrow account.
Rental Property Investor · St. Louis, MO · Member since 2014 · 741 posts · 424 votes
2y
Hi Peter, The lease is the guiding document. When the lease is fulfilled, the security deposit will be returned to the LEASE SIGNERS, less any repair costs and unpaid charges. We ask, 'How do you want the refund split?' and follow their instructions. Both signers have to agree. The response might be, 'One check with both names,' or, 'Two checks split 50/50, mailed to separate addresses' or something similar.
We do not use a savings account for e. lease. Perhaps, using the first name on the lease would reserve the funds for that lease. The liability is there - held in reserve until a certain lease is 'closed.' Note: if roommates change during the tenancy, a lease addendum is signed and the security deposit is called out so that there will be no confusion in the future, 'The Landlord and the Tenant's agree that . . . ' This lease addendum may also guide your bank record when the funds are withdrawn later.