In Massachusetts, can a landlord commingle multiple investment property security deposits in one account, as long as that account complied with all MA laws (interest bearing, separate from landlord funds, etc)?
I have 5 investment properties and currently each security deposit is held in a separate interest bearing account. I am wondering if it complies with the law to move all 5 deposits into ONE single account, to be used only for tenant security deposits?
According to MA Security Deposit law, you're supposed to keep the deposits separate. Commingling is a big no-no in Massachusetts. That can definitely be a cumbersome problem to solve for a landlord, but I've had excellent luck with using Santander's Landlord account. Effectively - the Landlord account is an escrow account that holds each of your security deposits in separately tracked accounts under one master umbrella account.
They maintain monthly reporting that is sent to each individual tenant and because the money is held in escrow, you don't need to claim the interest as your own taxable gains (as you would be expected to if you just maintain your own account). They also disburse the interest at the end of every year automatically, which is another requirement of holding tenant's money.
There's no fees for the account, and you also get a dedicated support center for when you've got questions.
Source: I'm a MA Landlord