Opening security deposit account for tenant with no SSN / TIN

[Michael Wolffs]

This is a very specific question, but probably not all that uncommon a situation especially for LLs who specialize in student rental.

I have a new tenant who's a foreign student.  They're on an F1 visa, and I've confirmed their validity with the school they are attending.  They've given me a bank check for the security deposit.  They also gave a fill out I-8 form, which appears to be appropriate for this situation.  However, as a non-resident foreign national, they don't have an SSN.  Note that the unit in question is in Jersey City, NJ, but I don't think this is a location specific issue.

I went to the bank that's been handling my security accounts.  Without an SSN or TIN, they just flat out won't open an account.  I will have to try other banks.  I'm worrying that this is common.

What have other LLs who've had to deal with this done?  Have you found banks that will open accounts with an SSN but with an I-8?  Are there other ways of handling this?

Any help appreciated.

[Anna Watkins]

Do you put the security deposits in an account that you open under the Tenant's name with the tenant's ID info??  Why?  As I understand the requirements (in Georgia at least), deposits just have to be in an account (not necessarily segregated by tenant), and if I have more than 10, it has to be interest-bearing and I distribute the interest annually.   Otherwise, security funds are kept in accounts under my name, specifically for security deposits.  Nothing goes in or out except deposits or refunds, but nothing is in the name of the tenant. That's for my record keeping to know.

I have found that online banks (Ally in specific) are pretty cool with opening multiple accounts for one owner.  If you only have this problem with one tenant, easy enough to create a checking account with an associated savings account just for that security deposit. You can give the account an internal "nickname" (2302 Main St deposit) as a reminder of what it's for.

[Michael Wolffs]

@Anna Watkins This may be a Jersy-ism.  I'll look into whether I can have an account that co-mingles security from multiple tenants, but I'm pretty sure I can't.

[Anna Watkins]

@Michael Wolffs - even if you have to have a separate account, can't it be opened with your ID, not the tenant's?  Georgia is very landlord friendly, so maybe that's a difference.

[Michael Wolffs]

@Anna Watkins I asked that specifically, especially since I have other accounts at that bank.  They said no.

[Patrick M.]

Yep- you are definitely following the letter of the law. NJ wants it in the tenants name and separate, banks want SS. 

You've documented your attempts- I would just open a separate account in your name and advise the student of the interest being earned, .01-.02 cents a month and be done with it.

[Michael Wolffs]

@Patrick M.I might try other banks.  I live in NYC.  I don't think there's a requirement that the bank be in NJ, so I might try some here.

[Patrick M.]

@Michael Wolffs- I would not twist yourself in knots over this. The only way it becomes an issue is if the tenant says you withheld interest from him. (it was instituted back in the days of 7% interest)

I believe that any bank will want his ss if it is in his name because interest must be reported. 

Put it in your name, prepare a letter explaining and have your tenant sign it. I think that is over kill- but it should settle your nerves.