Property Management
In Texas, a property manager who fails to place a tenant's security deposit in a separate account from operating funds is:
APermitted as long as the deposit is tracked in the ledger
BViolating TREC trust account rules and potentially Texas Property Code✓ Correct
CRequired to pay the tenant interest on the deposit as a result
DOnly in violation if a dispute arises
Explanation
Texas law and TREC rules require that tenant security deposits be held in a manner that protects them from use for operating expenses. While Texas Property Code does not explicitly require a separate bank account (unlike some states), TREC rules require proper trust account handling.
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