Bank account for rent deposits by PM - Should it be Different than the Corporation`s Business Bank Account?

[Neil1]

Hi Everyone,



A friend bought a 20-plex.



He is working with a PM who will collect rents and deposit net amount (Rents - Expenses),

monthly, to his bank account.



He has a business account with one of the big banks, which he opened for this building.

Should he just provide his PM with this business account information?

Or should he use a different bank account for the purpose of depositing the net amount by the PM?



Thanks,

Neil

 

[Sherilynn]

With a business account he should be able to get a "deposit only" bank card.

 

[Neil1]

Thank you for the additional information - deposit card is a nice idea. Guess you support providing the business account and do not see any issue with that. Not his case, but I thought if a bus. account has 100,000 for example, then maybe investors are not comfortable providing the business bank account info.

Thanks,

Neil

 

[Sherilynn]

I don't give out any information. I simply provide the card. The card links the deposit to my account without the PM having any of my information.



This is the purpose for which "deposit only" cards exist.

 

[Neil1]

Perhaps just few disadvantages related to deposit cards:

- what if the PM is a team where different people deposit monthly. then a small hassle ensuring the right person has the card each month. well unless you provide as many cards as needed

- some prefer not to add cards to their wallet



Also, how risky is providing your bank account in Canada? not just to anyone, to a reputable PM company? Plus, there is insurance no?



While I did mentioned some might not want others to see they have 10k or 100k, is it really wrong to provide the PM your account information?



Thanks,

Neil

 

[Sherilynn]

Our deposit card is kept with the post-dated cheques, which are kept in a special file box at the office. There is no need for more than one card as there will only be one cheque file for each investor's properties (rather than being kept in the PM's wallet).

 

[Thomas Beyer]

[quote user=Neil1]Should he just provide his PM with this business account information?


Totally.



The PM could, or shall I rather say, should also pay the mortgage as it is another expense.



Then once a year he sends you an annual summary statement (or you take the one for December as it should have the YTD info on it) that you can take to your tax accountant.

 

[Sherilynn]

It also depends on the bank and the branch. Some branches insist that third-party deposits are not allowed for corporate accounts unless the depositor has a special number. (I can't remember the acronym for it.) The number actually applies to multiple locations of the same company making deposits to the same account, but try as I might I could not successfully explain that to some bankers. A deposit card was much simpler.

 

[Neil1]

It is a pleasure learning from both of you.

Thanks,

Neil