Professional · Denver, CO · Member since 2015 · 15 posts · 6 votes
I'm thinking about trying Baselane. It seems like the only software that also allows landlords to keep security deposits separate which is a feature I'm looking for! Plus bookkeeping for taxes. Is anyone using this software? Do you have to collect W9 from all tenants?
In Colorado, landlords need separate accounts for security deposits. I'm having trouble opening these special accounts in CO only a few banks offer them. My credit union doesn't offer this specific Escrow account so I went to Chase. Chase had no idea what I was talking about when I called and I directed them to their own website. https://www.chase.com/personal/trust-estate-other-accounts/t...When I went in to open an account, they wanted a w9 for every tenant because it is an interest bearing account - I have five houses and 10 tenants. No way! I was hoping to open one account to hold all the security deposits.
Just open another account of your own and call it whatever you want with the word "escrow" in the name...presumably to final word of the name like "Jane Doe Escrow." It doesn't even need to be in one of your company names because in all likelihood you would use the account for depositing and paying back security deposits from tenants in all your different entities. It's not the BANK that has an escrow-type account to offer you...it's just YOU opening a regular checking account that you use as an escrow account. You could open it in your personal name and use your SSN. The bank may insist that you open it as a business account using your SSN like you are a sole proprietorship (as opposed to a personal account), but they can't stop you from naming it whatever you want. Then just use it for its intended purpose of keeping security deposits separate from your operating accounts.
You must keep in mind what the end game is that the state is trying to accomplish. And that is simply that they want to protect tenants from any event where the landlord does not have the money to pay back the deposit like poor money management or a bankruptcy where all the landlord's money is taken by other creditors. Here's the key: If you have the word "escrow" in the title of the account, and you can demonstrate that the money in the account came from tenants' security deposits, then you will successfully be able to keep the cash in that account out of your list of assets you would be required to show in your bankruptcy proceedings, and a creditor who gets a judgement against you cannot touch the escrow account.
Property Manager · Calabasas, CA · Member since 2026 · 141 posts · 67 votes
5mo
If the account is interest-bearing, the W-9 issue usually comes from who the bank thinks the tax reporting belongs to, so I’d get that clarified before you optimize around software. The way I handle it is keeping one clearly titled security deposit account completely separate from operations, then tracking each tenant’s balance on a subledger so I can prove every dollar in that account belongs to deposits. For bookkeeping, the operational part is easy compared with making sure the legal setup matches Colorado’s rules on where deposits sit and who gets the interest. I’d be less focused on whether Baselane is the only tool that can do it and more focused on whether your bank, CPA, and lease language all line up cleanly around the escrow treatment.
I’d definitely keep security deposits separated regardless of which platform you use. Baselane makes it pretty easy to organize money into separate accounts, which is one of the things I like about it. Just make sure whatever setup you choose meets your state’s requirements.