Trust Accounts for Security Deposits

[TerryF]

We bank everything with TD Canada Trust. So far, I`ve put security deposits we hold into a separate savings account, but it`s not a trust account. According to TD, there is no trust account available for private individuals, only for businesses.

It hasn`t been a big issue yet with any of our tenants but by law security deposits are supposed to be kept in a trust account, not in a personal savings account.

For those of you who do have trust accounts, where did you go to get it?

 

[tonypeters]

We have been investing in real estate for 10 years now, and we have always placed our Security Deposits into a GIC account. I am not aware of any (legal) requirement for them to be in a "Trust Account", but I do know that you are not supposed to hold them in your own "personal" or "business operating" account. With interest rates the way they are, you are not obligated to pay any interest, but we elect to pass on any interest that is earned. Hope this information is of assistance to you?

QUOTE (TerryF @ Aug 27 2009, 01:14 PM) We bank everything with TD Canada Trust. So far, I`ve put security deposits we hold into a separate savings account, but it`s not a trust account. According to TD, there is no trust account available for private individuals, only for businesses.

It hasn`t been a big issue yet with any of our tenants but by law security deposits are supposed to be kept in a trust account, not in a personal savings account.

For those of you who do have trust accounts, where did you go to get it?

 

[Thomas Beyer]

QUOTE (TerryF @ Aug 27 2009, 01:14 PM) We bank everything with TD Canada Trust. So far, I`ve put security deposits we hold into a separate savings account, but it`s not a trust account. According to TD, there is no trust account available for private individuals, only for businesses.

It hasn`t been a big issue yet with any of our tenants but by law security deposits are supposed to be kept in a trust account, not in a personal savings account.

For those of you who do have trust accounts, where did you go to get it?
A trust account is a normal chequing or savings account .. but money in it is kept in trust for the tenant until he moves out ..

it is called "in trust" because it is not your money but theirs .. it is a "deposit".

I am not sure if you as an owner and manager of one property must separate them, as these rules may apply only to licensed property managers who manage properties for 3rd parties.

 

[TerryKruse]

QUOTE (TerryF @ Aug 27 2009, 01:14 PM) We bank everything with TD Canada Trust. So far, I`ve put security deposits we hold into a separate savings account, but it`s not a trust account. According to TD, there is no trust account available for private individuals, only for businesses.

It hasn`t been a big issue yet with any of our tenants but by law security deposits are supposed to be kept in a trust account, not in a personal savings account.

For those of you who do have trust accounts, where did you go to get it?

I put ours in an ING Savings Account. This pays the required amount of interest+, can be separated and is easy to track.
We only have a couple of properties though.
Cheers, Terry

 

[TerryF]

QUOTE (TerryKruse @ Aug 28 2009, 08:04 AM) I put ours in an ING Savings Account. This pays the required amount of interest+, can be separated and is easy to track.
We only have a couple of properties though.
Cheers, Terry


Just called Service Canada and they confirmed exactly what you said. The `trust` account isn`t really a true trust account like lawyers have, but the money can`t be co-mingled with your personal money and is to be kept in a separate account for just security deposits. You can use the account for several properties as long as the only money kept in the account is tenant security deposits.

Thanks - it`s nice to finally get this one straight!

Terry

 

[koop]

QUOTE (TerryF @ Aug 28 2009, 02:09 PM) Just called Service Canada and they confirmed exactly what you said. The `trust` account isn`t really a true trust account like lawyers have, but the money can`t be co-mingled with your personal money and is to be kept in a separate account for just security deposits. You can use the account for several properties as long as the only money kept in the account is tenant security deposits.

Thanks - it`s nice to finally get this one straight!

Terry

For just security deposits? So I can`t put any other money from the property into this account?
I have just a chequeing and savings account for my property, I would just like to not have a huge chequeing account and a small savings with just acouple deposits in it

 

[GarthChapman]

QUOTE (koop @ Aug 29 2009, 11:18 AM) For just security deposits? So I can`t put any other money from the property into this account?
I have just a chequeing and savings account for my property, I would just like to not have a huge chequeing account and a small savings with just acouple deposits in it

Correct. Don`t co-mingle the deposit money with other funds. But is is perfectly OK to place all your various tenants` security deposits into one account.