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Jenn627
Laaaaaaaambert!
Member since 5/08 9818 total posts
Name:
Jenn
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Law question re: security deposits...
In a lease agreement... the security deposit held by the landlord - does it have to be held in an interest bearing account or no?
I've never rented before so pardon if this is a silly question.
TIA.
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Posted 11/16/09 2:41 PM  |
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Prudential Douglas Elliman Real Estate
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Re: Law question re: security deposits...
It depends. I think if its a LL with 6 or more units it has to be an interest bearing acct. But no matter what the LL cannot co-mingle funds....so security has to be separate from personal funds.
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| Posted 11/16/09 2:46 PM |
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annoyedTTCer
LIF Adult
Member since 4/09 3272 total posts
Name:
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Re: Law question re: security deposits...
I believe even if it is an interest bearing account they are entitles to certain fee each year for maintaining the account.
Do you get an interest pasid statement at the end of the year for tax purposes?
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| Posted 11/16/09 3:40 PM |
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Jenn627
Laaaaaaaambert!
Member since 5/08 9818 total posts
Name:
Jenn
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Re: Law question re: security deposits...
It's actually for my sister up at school - the LL is holding her security deposit and my mom thinks that the LL should be holding it in an interest bearing account.
I have no idea how many units this LL holds - my sister is looking into renting a house - she's a junior in college.
Also - in this particular lease the LL is requiring them to have renters insurance including liability insurance to the benefit of the LL - does that sound right?
I took business law many, many moons ago so again - sorry if these are ridiculous questions. 
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| Posted 11/16/09 3:52 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Law question re: security deposits...
I don't think it's required by law.
In my lease, they say they hold it in an interest bearing account, but in the lease it also says the interest earned will go towards "building maintenance". 
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| Posted 11/16/09 4:10 PM |
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neener1211
:-)
Member since 4/07 22952 total posts
Name:
J
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Re: Law question re: security deposits...
Posted by Jenn627
Also - in this particular lease the LL is requiring them to have renters insurance including liability insurance to the benefit of the LL - does that sound right?
This makes no sense. If something happens to your sister's belongings, then the LL gets payment? I don't think so!!!!
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| Posted 11/16/09 4:13 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Law question re: security deposits...
Here's a good read for New York State.
http://www.rentlaw.com/dep/nydeposit.htm
So basically, if the building has 6 or more units, they must put it in an interest bearing account. But they are also entitled to the first 1% of the interest.
So if the interest account they are putting it in is only getting 0.80% interest, you aren't going to see a dime of that.
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| Posted 11/16/09 4:13 PM |
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Jenn627
Laaaaaaaambert!
Member since 5/08 9818 total posts
Name:
Jenn
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Re: Law question re: security deposits...
Thanks everyone - thanks for the link Ave.
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| Posted 11/16/09 4:29 PM |
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dani731
Blessed!!!
Member since 1/08 3355 total posts
Name:
D
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Re: Law question re: security deposits...
Posted by Jenn627
Also - in this particular lease the LL is requiring them to have renters insurance including liability insurance to the benefit of the LL - does that sound right?
That doesn't sound right. You sister should get renters insurance but not to the LL's benefit. The LL should already have homeowners insurance. I don't think an insurance company will even do that.
I am renting the 1st floor of a house and the LL's son lives upstairs. She told us to get renters insurance because her homeoweners insurance will not cover our belongings.
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| Posted 11/16/09 4:35 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Law question re: security deposits...
FYI- the most I have ever gotten from an interest baring sercurity deposit account is $2.00
and that was with close to $2K in there
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| Posted 11/16/09 4:46 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Law question re: security deposits...
Posted by dani731
I am renting the 1st floor of a house and the LL's son lives upstairs. She told us to get renters insurance because her homeoweners insurance will not cover our belongings.
Yes but there are also a lot of people out there that actually THINK that the building's insurance would cover their belongings.
So this landlord is just being extra safe by requiring that their tenants carry renters. Possibly to avoid an frivolous lawsuit.
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| Posted 11/16/09 4:47 PM |
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sunnyflies
LIF Adult
Member since 9/09 1757 total posts
Name:
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Re: Law question re: security deposits...
I have always understood that security for a rental a year or longer legally must be held in a separate interest bearing account. For that reason we have our tenants security money in an account all by itself, not mingled with anything else.
As for renter's insurance, many landlords require their tenants to have it simply for the tenant's own protection because the landlord's house insurance does not cover any of the tenants belongings. My daughter had to take out renter's insurance when she rented an apartment in NYC or the LL would not have rented the apartment to her. I ask my tenants to take it out on their things and explain that if they didn't have it and something happened, they would not get anything back on what they lost. It's not expensive. I think my daughter's runs $160 for the year. Her's would also provide her with living expenses should her place be damaged and unlivable.
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| Posted 11/16/09 10:48 PM |
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dani731
Blessed!!!
Member since 1/08 3355 total posts
Name:
D
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Re: Law question re: security deposits...
Posted by ave1024
Posted by dani731
I am renting the 1st floor of a house and the LL's son lives upstairs. She told us to get renters insurance because her homeoweners insurance will not cover our belongings.
Yes but there are also a lot of people out there that actually THINK that the building's insurance would cover their belongings.
So this landlord is just being extra safe by requiring that their tenants carry renters. Possibly to avoid an frivolous lawsuit.
YES I agree that she should get the renters insurance because the homeowners insurance will not cover her belongs. LL SHOULD require it. However, the OP said the LL wants her to get it HIS benefit, as in the LL will get paid if something happens. That just makes no sense. Thats what he has homeowners insurance for. Her renters insurance should be for HER benefit so if something happens SHE gets paid, not the LL.
Message edited 11/17/2009 11:36:00 AM.
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| Posted 11/17/09 11:32 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Law question re: security deposits...
Posted by dani731
Posted by ave1024
Posted by dani731
I am renting the 1st floor of a house and the LL's son lives upstairs. She told us to get renters insurance because her homeoweners insurance will not cover our belongings.
Yes but there are also a lot of people out there that actually THINK that the building's insurance would cover their belongings.
So this landlord is just being extra safe by requiring that their tenants carry renters. Possibly to avoid an frivolous lawsuit.
YES I agree that she should get the renters insurance because the homeowners insurance will not cover her belongs. LL SHOULD require it. However, the OP said the LL wants her to get it HIS benefit, as in the LL will get paid if something happens. That just makes no sense. Thats what he has homeowners insurance for. Her renters insurance should be for HER benefit so if something happens SHE gets paid, not the LL.
The landlord doesn't know what he is talking about. The tenant should get the renters policy to cover her own butt. The landlord's name doesn't need to be on it.
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| Posted 11/17/09 12:54 PM |
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