Security Deposits and Escrow Accounts

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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    1mo

    This depends entirely on local LL/Tenant laws. It is a requirement in some jurisdictions.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1mo
    Quote from @Candice Coates:

    As I read over my leasing agreement for my tenant, I notice the verbiage indicates opening an escrow account. Is that standard practice?


    You'll want to research what your state and local definition of a, "escrow account" actually is.

    The language is used in Michigan, but Michigan legally just requires a landlord to put security deposit funds in a separate account and then include in the lease where this bank account is (physical bank branch address). 

    Other states require the setup of an actual legal escrow account where no interest is earned. Banks willing to do this  can be difficult to find. 

    [email protected]248-209-6824
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  • Candice CoatesPro Member
    OP
    New to Real Estate · DMV · Member since 2022 · 53 posts · 45 votes
    1mo

    Thank you @Drew Sygit, I will ask around and do more research on it as well. I found two banks in my area, so I had to ask the community, lol.

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