PropertyZar

Most states have rules regarding handling security deposits. Some states prevent allowing the security deposit to be used as the last rent. You should not mix security deposits and rent monies. Commercial property management software will have the ability to keep deposits separate from all other monies. Best property management software will allow you to create separate bank accounts so that deposits can be kept separate from the main operating account.

Property managers should never agree to apply the security deposit to the last month’s rent. For one reason, what happens if the tenant damages the property? Property managers that use a property management app will typically conduct a ‘move out’ inspection. If there is damage that costs money to fix, you may be out of luck if you did not collect the last month rent.

Legally, there are laws/rules that dictate how you handle the disbursement of the tenant’s security deposit.

It will also make it a bit more complicated for your CPA when it