Common use of Security and Damage Deposits Clause in Contracts

Security and Damage Deposits. 1. A security and damage deposit greater than or equal to one month’s rent, shall be collected by Manager from Tenant before Tenant occupies the Premises. Such deposit shall be maintained in a trust or escrow account of the Manager or savings/escrow account of the Owner, with prior arrangement. Manager may take less than one month’s rent equivalent with Owner’s permission. 2. Security and damage deposit collected by Manager from Tenant, shall be returned to the Tenant by the Manager or the Owner when the Tenant vacates the Premises, subject to Manager’s determination, consistent with Colorado law, which requires funds be returned within thirty (30) days unless otherwise stipulated in lease, not to exceed sixty (60) days. 3. Manager shall properly account for any portion of the security deposit retained for the purpose of offsetting Owner’s expenses for unpaid rent, utilities, cleaning charges or repairs. 4. Owner acknowledges Manager’s duties under Rule 5.8 of the Colorado Real Estate Commission concerning notice to Tenants of transfer of deposits to Owner, if applicable, and disclosures, of Owner's true name and current mailing address. Pursuant to Colorado Real Estate Regulations, Manager must advise Owner and Owner acknowledges that, all monies held by Manager in bank accounts not denominated a "trust" account may be subject to offset by creditors of Manager. Provided, however, Manager agrees that it shall deposit funds received from Property operations or from Owner in Manager’s designated trust accounts. 5. Any trust account Manager maintains under this Agreement may be an interest-bearing or income producing account. Manager may retain any interest or income from such account as compensation under this Agreement. 6. In the event litigation occurs concerning security deposits, Manager shall defend same in its own name as Manager for Owner, at Owner’s expense. Manager may charge Owner a fee not to exceed $100/hour for time spent in litigation (time in court, time preparing for court, travel time to and from courthouse, etc.). 7. Should this Agreement terminate while an existing Tenant’s security deposit is in Manager’s possession, Manager shall forward that amount in full to Owner within 30 working days. As of disbursement, Manager shall have no further obligation or liability whatsoever concerning the security deposit to any person or entity; and Owner shall hold Manager harmless there from.