Separate Security Deposit Accounts - Indiana

6 Replies

Do I need to have a separate bank account for my tenants Security Deposits in the state of Indiana?  If not, is there any benefit to me forming one?

Hey Josh - Quick search on google brought me to this article (1.5 years old) for you where they say no separate deposit acct is necessary. https://www.landlordology.com/indiana-landlord-tenant-laws/

That said, you can probably get a quick answer by calling the Housing Authority in Indiana.

While I am not an investor in Indiana, I am an investor in Maine. In Maine we do have to have a separate count for deposits. This actually get checked in the state of Maine from time to time. I've stopped taking security deposits and started taking first and last months rent instead. This gives me some breathing room if somebody does not paytheir rent and I have to go through the 45 -60 day process in Maine for notice and eviction. All states are going to be different and some of your strategy will need to be tailored to the specific state you are operating.

Best - Dave

Dave- I'm originally from Maine and have thought of moving back until I talk with my Uncle who has several MFHs in the L/A area. The regulations in Maine are crazy restrictive compared to IN. My sister has been renting a house from the same guy for several years. After a trip to Europe, they had a bed bug investation. They stuck the $1200 extermination bill on the landlord because it's his responsibility. I could see that if they just moved in but not 3 yrs later. He paid it without arguing but promptly raised their rent enough to force them out. I can evict in under 30 days in most situations here and usually by the end of the month for nonpayment. Props to you guys who deal with it up there. 

Shameless plug- we have turn keys with great numbers here in NW Indiana. PM for details. Great for out of staters (just ignore my occasional yellow letter to absentee owners). 

 I've stopped taking security deposits and started taking first and last months rent instead. 

How does this protect you from renter induced damage? If its last months rent, they simply don't pay the final month before they leave.

Originally posted by @Anish Tolia :
 I've stopped taking security deposits and started taking first and last months rent instead. 

How does this protect you from renter induced damage? If its last months rent, they simply don't pay the final month before they leave.

 Ansha - appreciate your comment and sediment however it has been my experience that if you are into an eviction process then the tenants are usually not paying - this at least provides some accessible revenue immediately - maybe California treats deposits differently than Maine but we are not allowed to touch these funds until after the tenant leaves. 

Originally posted by @Adrien S. :

Dave- I'm originally from Maine and have thought of moving back until I talk with my Uncle who has several MFHs in the L/A area. The regulations in Maine are crazy restrictive compared to IN. My sister has been renting a house from the same guy for several years. After a trip to Europe, they had a bed bug investation. They stuck the $1200 extermination bill on the landlord because it's his responsibility. I could see that if they just moved in but not 3 yrs later. He paid it without arguing but promptly raised their rent enough to force them out. I can evict in under 30 days in most situations here and usually by the end of the month for nonpayment. Props to you guys who deal with it up there. 

Shameless plug- we have turn keys with great numbers here in NW Indiana. PM for details. Great for out of staters (just ignore my occasional yellow letter to absentee owners). 

 Love your shameless plug!!  Actually I am from CT and invest mostly in Maine on the residential side as I have found they are easier to deal with than CT.   I'll honk to your uncle when I drive through L/A tomorrow!!

Thanks for the tip!

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