From the Forum – Joint Bank Account for Security Deposit

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Joint Bank Account for Security Deposit:

“I recently moved from a group house that was maintained by a management company to an one bedroom condo rented by the owner. The owner of my new place has opened a bank account for the security deposit and would like to add me to the account. She is being somewhat insistent about this, even though I have told I didn’t really feel the need for a joint account. I’m mostly against it because coordinating a time that works for both of us to go to the bank seems like a pain (I would likely have to take time off of work to do this). Also it seems a bit odd and I’ve never heard of this. Has anyone been on a joint account for their security deposit or have any ideas why being on a joint account would be a good or bad idea? ”

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26 Comment

  • There is no need for this. Plus this means you could just take your deposit out at any time. Or they can funnel drug money through the account that also has your name on it. If they are that worried, they can list you as an payable on death beneficiary.

  • That sounds insane, inappropriate, and more than a little bit scammy. Don’t jeopardize your credit history by opening a bank account with someone who isn’t your spouse.

    • I Dont Get It

      I was coming here to say the same thing. Don’t do this. What if she then bounced a check leaving the account overdrawn or something?

  • Unless this is an escrow account of some type, this seems really fishy to me. In over 20 years of renting, always with signed leases and mostly with private owners, I’ve never paid SD in anything other than personal check to the owner (with the exception of cash in one instance). The lease served as my receipt, and I never had an issue recovering SD minus mutually agreed upon cleaning/repair costs.
    Even if there’s nothing nefarious going on, I would never want my credit linked to a complete stranger (have you seen THEIR credit report?) Also, if it’s a normal joint checking or savings account, what assurance would the landlord have that you wouldn’t withdraw the money at some point without their permission? Weird.

    • As someone who has opened escrow accounts for tenants, the tenant definitely does not need to be present to list them as the beneficiary. The landlord just needs to have a copy of your driver’s license and your social security number, which you presumably provided for your background/credit check already.

  • Is the lease signed jointly? If so, there is probably some law that says they have to match. Additionally, I think it is also required by law that funds held by a landlord for security must be in an interest-bearing account.

  • Ally

    Most banks allow a Person to Person payment so you should be able to send funds directly to her bank account (to pay rent) without having to put your name on her account or the reverse. It may not be a scam… she may just not know very well how bank transfers work.

    • Agreed. I direct deposit cash into my landlord’s bank account each month and am not on the account and have a different bank all together. I just show up with his account number and the cash and make a deposit. It’s unnecessary to open a joint account.

  • I think the owner is trying to do the proper thing by opening an account for the security deposit to go into, per law, but it is odd that he/she wants it to be a joint account.

  • This is an absolutely terrible idea. How can you even for a moment think this is a good idea. As soon as you sign your name to a bank account you are liable for any types of fraud or misuse. Similarly this goes for the landlord as well how can he trust you not to start running fake checks — putting him at risk of having to pay for fraud.

    Here I will give you some free advice. There is this tool called paypal. Its this new fangled internets like tool that allows you to funnel money to other peoples bank accounts from your own — entirely for free!!! Or if your landlord isnt the internets type of person… well.. i believe there is another technology called a check that you or your bank can send directly to the owner.

    do not join a bank account with someone you do not know.

  • Run. I’m a LL and would never even think of this.
    I’ve had my account added to my tenant’s transfer payment programs via their banks to make paying their rent easier (no stamps!) but that’s it.

    Nuts – run!

  • Insisting on something that doesn’t benefit them more and causes you more work seems very fishy. If she refuses, I’d leave.

  • on one hand, maybe your LL is trying to be transparent. By law, the deposit has to go into an interest bearing account and you are entitled to that interest minus whatever the LL takes in the end. But do NOT give up any personal information. This is so shady. I was LL and just printed out the account balance from the computer so tenants could see exact amount/interest and wrote them a check when they left.

  • HaileUnlikely

    This is very weird. Either the landlord mis-stated something, you misunderstood something, or something weird is going on. There is no legitimate reason for you or the landlord to want this, much less require it. Clarify what the landlord is requesting, and if it is what you think, run like hell.

  • If this is a run of the mill joint bank account, fishy indeed. I live in a shared apartment managed by a management company and they recently opened escrow accounts for each of our security deposits. This makes sense to me, since tenants may be leaving at different times, and it didn’t require my going into the bank to do anything.

    • HaileUnlikely

      I think there’s a better than average chance that the landlord either misunderstood or mis-stated this exact thing, and just intended to set up such an escrow account for the tenant. I’d want to clarify that that the landlord’s intention was something other than this first, in case this is all it was and something just got lost in translation.

  • Hi,

    I manage a bank in downtown dc and DC does require you to be on the account, but only as a beneficiary. This is because it is DC law for the landlord to accrue interest on the account and report this interest to you annually. And, to answer the larger question, they should always be set up as pseudo escrow account.

    • Interesting, thanks! So who does that accrued interest belong to? The tenant? If so, I feel like a chump–I’m usually just happy to get my full deposit back.

      • You’re entitled to accrued interest if you stayed there a year or more. With rates where they are, you’re not getting much extra even after a couple years.

        • My tenant just left my basement apartment near H St. after 9 year. I had the money in an interest bearing account, but the interest rates for an amount under $1000 (remember, she started renting 9 years ago, so 1-month’s rent was low then) was 0.25% for most of the time. I think overall she ended up getting back like $20 in interest.

        • Anon Spock is correct here. Renter is due interest, and op, you should just be a beneficiary, if you are a full owner of the account you could run into other problems.

    • This cannot be accurate, because anyone receiving SSI or Medicaid would have a very difficult time staying under the $2000 resource limit if their security deposit were in an account with their name on it (joint accounts are presumed as resources, though this can be disproven).

      I have never had a landlord require this (including ones with professional property managers and lawyers on retainer) and I would never want a joint account with a landlord. A landlord could fulfill her obligation to report interest without the tenant being on the account.

      • sorry, I re-read and I thought you were saying the tenant had to be on the title of the account. If it’s just payable on death to the tenant, I guess that could be the case at a given bank.

  • Hi I’m the person who posted this question and I told her (again) that I didn’t want to be on the account and and she sent me bank account information and it’s over with. To clarify, the account would never be used to pay the rent, it would just be adding my name to the escrow account holding the security deposit (it’s not a checking account so no bounced checks to worry about). For what it’s worth I think the landlord is trying to do this to so I could see she was obeying the law and holding the money in separate account that she was not touching. And perhaps so I could retrieve the money if she were to pass away suddenly. I was just wondering if this was a thing people did, which clearly it isn’t. She sent me the account number and everything which is more than my old rental company did.

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