Glossary Term
An escrow account (or trust account) is a separate bank account where landlords or property managers must hold tenant security deposits in many states. The money cannot be mixed with the landlord's operating funds, and some states require interest to be paid to the tenant.
In short
An escrow account (or trust account) is a separate bank account where landlords or property managers must hold tenant security deposits in many states. The money cannot be mixed with the landlord's operating funds, and some states require interest to be paid to the tenant.
If your landlord doesn't hold your deposit in a required escrow account, they may lose the right to keep any of it or owe you penalties. In some states you're also entitled to interest on your deposit.
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In many states, yes—in a separate escrow or trust account. Not all states require it. Check your state's landlord-tenant law.
Some states and cities require landlords to pay interest on deposits held for a certain period. The rate and method (annual payment or at move-out) vary. Your lease or state law will specify.
You may be entitled to the full deposit back, plus in some states double or triple damages. Consult your state law or a tenant attorney.
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