ABA Family Legal Guide

Renting Residential Property

Ending the Landlord-Tenant Relationship

Security Deposits

Must landlords hold security deposits in a separate bank account apart from other assets?

In some states, the law imposes a requirement on landlords to keep the security deposit in a separate account from their own money--this makes sense because, legally speaking, the money does not belong to the landlord. A security deposit belongs to the tenant until it is later refunded or applied to cover unpaid rent or damage beyond normal wear and tear.