Posted by Tim (Atlanta) on August 12, 1999 at 15:20:58:
The security deposits, pet deposits and last month’s rent could be used to reduce your cost at the closing table. As far as the current month’s rent, I would think that the seller would want to prorate the rent amount and give you the rent from the closing date to the last day of the month.
One thing to be careful of here. In some states, there are laws that state that as a landlord, you must keep all security deposits in bank accounts. If one of your tenants asks, you must provide the bank account number where the deposits are kept. They can even verify those funds. So if you use them during closing, you would not have them in the “security deposit” account. These laws do not apply in all states, and some states apply the law only if you exceed a certain number of rental units.
Just my .02
Down Payment Options - Posted by lew
Posted by lew on August 12, 1999 at 14:25:22:
Question: Is it possible to use Security Deposits (From an in-come property) towards the purchase of said income property?? I.E, LAST MO’S RENT, SECURITY DEPOSITS, CLEANING FEES, THE CYRRENT MO’S RENT IF CLOSING AT THE END OF THE MONTH, ETC.
Any info greatly appreciated!!
Re: Down Payment Options - Posted by DaveM(CT)
Posted by DaveM(CT) on August 12, 1999 at 18:25:26:
Take Tim’s advice to heart! In CT and MA, security deposits must be held in escrow, period. In MA, you must pay a minimum of pass-book savings account interest TO THE TENANT.
I had to take a landlord to small claims court 20 years ago in MA, in order to get my security deposit back. Turns out that he had spent the money - never escrowed it. The judge, without a second’s pause, awarded me triple my sec. dep. as damages.
Get legal advice - immediately. I am NOT a lawyer.
Good luck - DaveM(CT)