ok to accept than transfer security deposit to the owner vs having it directly deposited into their acct?

In Property Management - Asked by Paul A. - Mar 11, 2012
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Ron L.
Broker/Agent
Dallas, TX

I always get the tenant to make the check payable to the Owner, and give the check to the Owner immediately. If you deposit it into your account first, this is commingling funds. The term commingling is most often applied to funds or assets. When a fiduciary, a person entrusted with the management of funds other than his or her own in trust, mixes trust money with that of others, the fiduciary is commingling funds, and thereby breaching his or her fiduciary duty.
Ron Levy. The Properteam LLC

Mar 12, 2012
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Chris R.
Broker/Agent
Denton, TX

Depends on your contract relation ship for services with the particular owner involved. If you are listsing the property just for doing the leasing - then checks likely should be made to the owner and given to the owner at the time of lease execution. Then - give the owner an invoice for your commission and the owner pays you / your brokerage firm. If the owner has direct deposit capability then sure it is OK to negotiate for the tenant to direct deposit funds. The receipt of the funds should be verified befor keys are given out to the leased property. If you are doing property management and following the requirements (in Texas at least) then for sure you could deposit the funds to your trust account and then either transfer the funds to the owner - or retain them for security deposit accounting for when the tenant moves out --- all would be negotiable between the parties. For sure such funds should not EVER be deposited to your own personal - or your company's bank account that contains your personal or your company's own operating funds as that is commingling and could subject you to actions that could result in your loss of your real estate license.

Mar 15, 2012
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David C.
Broker/Agent
Mount Prospect, IL

Paul I am in Chicago and not California. Here is how I proceed when acting as a residential leasing agent for the owner.
I collect first month’s rent and typically have the tenant make the security deposit out to my brokerage company.
I provide a disposition of security deposit memo to the owner with the check for the first months rent. This ensures that my commission is paid. I see no difference of this procedure to holding the earnest money for a sale then providing a disposition of earnest money to the closer at the title company. A listing agreement should explain the methods for collection of your commission.
Also, to clarify commingling funds is combining your personal funds with those belonging to another party that should be placed in your brokerages operating account.
An Example: rental rate is $900.00 per month with two months security deposit and my commission is one month rent. Therefore $2,700 total due to owner. One check to the owner or management for $1,800 and one check to XYZ Brokers for $900.00

Jul 25, 2012
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