Updated almost 11 years ago on . Most recent reply
How do I handle the Security Deposit
I'm in Texas and I have 2 rentals. I have both houses leased but I don't have any specific place where I've saves the security deposits.
What exactly is the legal protocol I need to be following with regards to the security deposit? Thanks
Most Popular Reply
I am not sure if you own the property, but there is a very important and dangerous term you need to learn very quickly. It is called "Co-Mingling of Funds". As a property manager we keep those funds in a separate escrow account, untouched by us or the owner.
A good way to look at it is that money is not the owners money and it is not the property managers money. It is the tenants money that we are holding incase they do not perform per the contract, whether that is by vacating early or not returning the property in the property condition (minus wear and tear). The owner does not have any rights to that money unless the tenant does not perform via the agreement then that is a different story.
In short, put it in a separate account and do not touch it.