Who is responsible for placing security deposits in segregated accounts?

The responsibility for placing security deposits in segregated accounts typically lies with the owner of the property. This is because the owner collects the security deposit, which serves to protect against potential damages or unpaid rent incurred by a tenant during their lease term. By legally requiring that these deposits be held in separate accounts, it ensures that the funds are protected and not mingled with the owner’s or management company's operating funds.

This practice is critical for maintaining transparency and accountability. Holding the security deposit in a segregated account allows for proper tracking of the funds and ensures that they are available to either return to the resident at the end of the lease or used for legitimate deductions if necessary. This legal compliance also protects the rights of residents regarding their deposits.

While the management company may handle the day-to-day operations regarding the handling of the deposit, the ultimate responsibility for the account remains with the owner, making it crucial for them to establish these practices to adhere to local regulations and safeguard tenant rights.