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sdwilson68

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Posts: 1
Reply with quote  #1 

I was curious how everyone is handling deposits and rent.  Do I need a separate bank account and business name to take advantage of the tax benefits?  I only have two rental properties at the moment so I am pretty sure I do not need a corporation.

jhl

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Posts: 1
Reply with quote  #2 
The correct way to handle security deposits is this:

Put it in a separate savings account with both the tenants name and your name.  Be sure to do this.  Because the law in Massachusetts is that both names have to be on the account or the tenant can win triple damages in court.  I know it happened to me last year.  The tenant I had would not sign the bank form to include her name on the account, found out she could get triple damage, (3 times $1500.00) and took me to court and won.  then I had to pay for her lawyers fees, $2500.00 too.  So be sure you find out the law in your state about security deposits accounts and follow through.



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Janet H Lynch
OHlandlord

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Posts: 3,804
Reply with quote  #3 

Texas does not require a seperate bank acount for your rental deposits.  Nor do you have to pay interest on these deposits to the tenants.  Just keep good records of who paid the deposit for each unit and on what date in what amount.  After move out, itemize their deductions, subtract them from the deposit, then send the itemized statement and deposit check to the tenant at their forwarding adddress within 30 days as required by your state law.  Keep a copy for yourself in case they challenge your deductions in court.

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