Does Prepaid Rent Require Escrow Account? (Memphis TN)

[Frank Jiang]

Hi BP,

I am currently changing property management for one of my properties in Memphis TN.  As a last act of something the old PM has somehow convinced the tenant to prepay through July and decided to charge a management fee on two months for which they will not be managing the property (totally different problem than why I'm posting).

The reason I am posting is that I believe that here in California, I am actually not legally allowed to hold this money.  I would have to open an escrow account and withdraw funds from that account as rent revenue becomes recognized.  Is there a similar rule in Memphis that I should be aware of?  Just trying to cover my *** here.

Thanks!