Realtor 路 Middlebury, CT 路 Member since 2015 路 47 posts 路 6 votes
Connecticut law states that the security deposit MUST be held in an escrow account. When I went to the bank today, they advised me to open a Landlord Tenant account which I believe is not an escrow account. Can someone advise me if both are the same? What do you do in your business?
Retired Landlord/Author 路 Commerce Township, MI 路 Member since 2012 路 1k+ posts 路 1k+ votes
10y
You will setup another bank account called a "Tenant's Security Deposit Trust Fund Escrow Account" at the bank. You must keep the tenants Security Deposits separate from your own bank account. (Check your state law)
When you deposit the Security Deposit into the Security Deposit Trust Fund Escrow Account at the bank you will make the Security Deposit in QuickBooks, if you use QuickBooks, a Security Deposit Other Current Liability Account.
Investor 路 Mystic, CT 路 Member since 2015 路 24 posts 路 8 votes
10y
Try and find an escrow account, maybe ask your attorney who they use. You want to be able to withdraw without their written/present consent to do repairs when they move out.
Investor 路 North Stonington, CT 路 Member since 2014 路 393 posts 路 228 votes
10y
I bank at Chelsea Groton Bank. I just go in and tell them that I need to set up a security deposit account. They create an account using my information and the tenants information. The only person that has access to the account is me. I just go in and close the account when someone moves out.
Retired Landlord/Author 路 Commerce Township, MI 路 Member since 2012 路 1k+ posts 路 1k+ votes
10y
You will setup another bank account called a "Tenant's Security Deposit Trust Fund Escrow Account" at the bank. You must keep the tenants Security Deposits separate from your own bank account. (Check your state law)
When you deposit the Security Deposit into the Security Deposit Trust Fund Escrow Account at the bank you will make the Security Deposit in QuickBooks, if you use QuickBooks, a Security Deposit Other Current Liability Account.
I bank at Chelsea Groton Bank. I just go in and tell them that I need to set up a security deposit account. They create an account using my information and the tenants information. The only person that has access to the account is me. I just go in and close the account when someone moves out.
Thanks Mat. I went to TD bank & they advised me to open a Landlord Tenant account. I guess I am splitting hairs here, this might be enough.
Buy & Hold Owner 路 Redlands, CA 路 Member since 2015 路 5k+ posts 路 2k+ votes
10y
@Nancy Neville is spot on. The issue is an account that is not 'mingling funds' with your personal nor your petty cash to operate the rental. Also investigate if the interest on the deposit belongs to the tenant.
Investor 路 Wethersfield, CT 路 Member since 2014 路 9 posts 路 2 votes
10y
Just something to add, my bank required me to have their social security numbers and copies of their ID's as well. They are entitled to interest earned, but they would theoretically be responsible to declare it as well. However the last tenant I had leave earned about 20 cents on his deposit 馃槃
Residential Investor 路 Allentown, PA 路 Member since 2012 路 95 posts 路 29 votes
3y
New Jersey has to same requirement. Is there any local or regional bank that is highly recommended for this? They all do it, but is there a bank that makes things easier with things like online upload of tenant's w-9, phone deposits, things like that?. I'm mean specifically for a Tenant's Security Deposit Trust Fund Escrow Account and not a regular checking or savings account?