Open a real estate trust account for your rents collected and a separate account for the security deposits
Check with your state department of real estate to ensure your bank is providing you with the correct account type (many trust accounts will be non-interest bearing). See examples below on how your trust accounts should appear. It is very important to ensure that each client for whom you hold funds in the trust account be guaranteed by the FDIC up to $250,000 should the bank go out of business. These examples are not to be construed as an absolute, but only as an example, and you should consult with your Attorney and the bank to make sure each owner or resident in that trust account is guaranteed up to $250,000 each.
Contact your bank to verify if they handle real estate related trust accounts (non-interest bearing accounts unless state requires otherwise)
Management One recommends the following accounts to be set up: We recommend giving a color to avoid confusion within your management company
1.Corporate Checking Account (Red)
This account is for your general business account & is not set up as a trust account (Red)
2. Management One (Surname) General Trust Account (Blue)
This account is for all general ledger entries for all owner, resident& vendor transactions
3. Management One (Surname) Trust Account (Gold)
This account is for all resident security deposits
Check ordering (Blue, Red and Gold Accounts)
• Recommend Safeguard 951-352-0310 for Laser checks
• Laser 3 part Laser checks with check on top for Blue / Red checks
• Make sure each trust account (each owner’s property) is insured by the bank, not just the Gold account but each property that is represented in the Gold Account
Sample Bank Form
