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If MoveZen Begins Managing My Property With a Tenant Already in Place, Do I Need to Provide the Security Deposit?

This isn’t a MoveZen preference; it’s a legal and accounting requirement tied to how security deposits are regulated.

Audience: property owners onboarding with MoveZen who already have a tenant and want to understand how the existing security deposit is handled.

Yes the existing tenant’s security deposit must be transferred to MoveZen when management begins.

Here’s how and why this works.

FAQs ❓

Why can’t the deposit just stay with the prior manager or owner?
Because the party managing the lease must also be holding the deposit.

What if I don’t have the deposit anymore?
You’re still responsible for ensuring it’s transferred or accounted for.

Is this deposit considered my money?
No. It remains the tenant’s money until lawful deductions are determined.

Does this affect my owner payments?
No. Security deposits are separate from rental income.

Why the Security Deposit Must Be Transferred ⚖️

Under North Carolina law:

  • The manager administering the lease must hold the deposit

  • Deposits must be kept in a regulated trust account

  • Deposit custody must follow management responsibility

MoveZen cannot legally manage a lease without control of the corresponding deposit.

Related article:
https://know.movezen360.com/understanding-trust-monies-escrow

What Happens During Onboarding ✔️

When MoveZen takes over management:

  1. The existing deposit amount is confirmed

  2. Funds are transferred from the owner or prior manager

  3. The deposit is placed into a MoveZen trust account

  4. The tenant ledger is updated

This preserves continuity and compliance.

What If the Deposit Is Missing or Incomplete ⚠️

If the full deposit is not available:

  • The owner is still responsible for the amount owed to the tenant

  • Options are discussed to correct the shortfall

  • Documentation is required to protect all parties

The tenant’s rights do not change when management changes.

What the Security Deposit Is Not 🚫

The transferred deposit is not:

  • Owner income

  • A repair fund

  • A reserve account

  • Available for operating expenses

It remains a tenant liability until move-out.

How This Appears on Owner Statements 📄

Owner Statements will show:

  • The deposit as a liability, not income

  • No impact on monthly disbursements

  • Clear tracking for future accounting

Related article:
https://know.movezen360.com/how-to-read-owner-statement

What Happens at Tenant Move-Out 🔄

At move-out:

  • Deductions are evaluated

  • Lawful charges are applied

  • Remaining funds are refunded to the tenant

  • Accounting deadlines are followed

This process is unchanged by prior management.

Related article:
https://know.movezen360.com/security-deposit-return-deadlines

A Helpful Owner Perspective 🤔

Instead of thinking:

“Why do I have to send this money again?”

Reframe it as:

“I’m transferring custody of tenant funds, not paying a new expense.”

That distinction matters.