Where to keep security deposits

Question

I have done a search in here and in Google to learn the Michigan rules on placing my tenantâ€™s security deposit in a bank without results. I am a sole proprietor at this point. Can I just put it in my personal money market account which pays higher interest? Do I have to open a new account and put just tenant security deposits in there?

Thanks to all who answer.

Ralph S. · Answer

That's no issue.  Upon hearing those words you simply hand over a 5 day and let them know on day 6 you file for eviction. They squawk, but they pay.

Account Closed · Answer

Unlike Mike, up until about 3 years ago, I returned full deposits to almost every tenant. Quality of tenants has gone down, so a few tenants are now losing a couple hundred of it.

My last move-out, full refund, The folks before them lost $80. My son has a tenant moving out right now, and I was just in that house, and I think he's going to get a full refund. The tenant was washing the walls when I got there, and I didn't see any damage.

Note: full refund actually means minus the carpet cleaning fee for every one of them. I get the carpets cleaned and then it is done right. Tenants like it. I get a good price and they don't have to mess with it.

Account Closed · Answer

State law will specify what you have to do with deposits.

Oregon doesn't care as long as I get the accounting sent 30 days after move-out. So I keep mine in the savings account that I use for my automatic mortgage payments. It gives me a little extra cushion and if the tenant gets himself evicted, his deposit is going to end up as a mortgage payment, anyway.

Mitch Kronowit · Answer

Second what Kirk said.

I keep my rental activity in a completely separate bank from my personal funds. I use the checking account of that bank for rent deposits and payments. The security deposits are kept in the savings account. My bank lets me give my accounts a nickname, so I always make sure the word "Escrow" is in the name for the savings account. Sure, it's not technically an escrow account, but would look good on the computer print out if anybody wanted to see it.  ;-)

Ryan A. · Answer

Old post but....

I've been gettting securities that are less than the months rent. ie: rent is $650, sec is $600. 2 reasons:

RI law says it can't be more than 1 month -and-

They can never say "keep it for rent"

Tom C · Answer

I'm with Mike.. I put the money to work for me and my deposits are always the same as the monthly rent.

Michael Rossi · Answer

If you are going to be a landlord, you need to do more than 'wade' through Ohio's tenant-landlord law.  You need to be an EXPERT on the subject!

The answer to your question is that a landlord in Ohio can charge any amount for the security deposit.  However, if the deposit is greater than one month's rent, the landlord must pay interest on the portion of the deposit that is above one-month's rent, if the landlord holds the deposit longer than 6 months.

Good Luck,

Mike

B R · Answer

I have read it's better to charge more than a month's rent as a deposit, to avoid "keep the deposit as my last month's rent" issue.  I have waded thru Ohio's landlord/tenant law and haven't found the answer to how much I can charge as a deposit.  Any comments or suggestions?  Does anyone charge a separate "cleaning fee" or  a higher deposit, and what has been your experience with it?

Pete Condit · Answer

If for some strange reason, I ever find myself needing to rent a place in Ohio, I'm gonna stay away from mike!  :)

That, or I'll just trash the joint and get my money's worth!!!!!  :)

Michael Rossi · Answer

I agree with what Taz said from a legal standpoint.  However, in the 6 years I've been in the rental business, I've not given the entire security deposit back to more than 5 or 6 tenants and I've probably only given partial deposits back to another 5 or 6!  So, from a practical (not legal) standpoint, it really doesn't matter where the security deposits are because in the vast majority of cases I'M KEEPING THEM!

Mike

Where to keep security deposits

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