One business item that we find often trips up landlords or property owners is what to do with security deposits. While holding a security deposit for a tenant may seem like a simple task, we identified some key areas where problems may arise.
First, a landlord, property manager, or owner has three options for holding the security deposit.
- Held in a trust account
- Held in a bank or credit union
- Held by an escrow company
The critical thing to remember is that a landlord or property manager cannot co-mingle the security deposit with other sources of income! When the lease comes to an end, the security deposit Must be returned to the tenant within 21 days of the lease ends. It must include a written summary of expenses the landlord or property manager withholds from the security deposit. Failure to do so may force the owner or property manager to give back the entire or, in some cases, double the security deposit back to the tenant.
For more info call us at 425.438.3474