Overview
A common misconception in DoorLoop: customers assume the lease deposits account setting on a property (under Settings → Bank Accounts) controls where the deposit money physically goes. It does not.
The setting controls accounting routing — which liability account the deposit posts to on your balance sheet, and how it appears in reports. It does not redirect the actual funds from one bank account to another. By default, deposit funds — especially deposits paid online by tenants — flow into the property's operating bank account, not the escrow account.
This article explains how it actually works, why it works that way, and what to do if you need deposit funds physically held in a separate escrow account.
Note: Many U.S. states require security deposits to be held in a separate, segregated account from operating funds (sometimes interest-bearing, sometimes specifically designated as an escrow or trust account). If you're subject to a state requirement like this, simply setting the lease deposits account in DoorLoop is not enough to comply — you must also physically move the funds. See Manually Route Deposits to a Separate Escrow Bank Account below.
What the "Lease Deposits Account" Setting Actually Controls
When you go to Rentals → Properties → [property] → Settings → Bank Accounts, you'll see a setting that asks: "Which account should we use as the escrow bank account for lease deposits?"
The wording suggests this routes deposit funds to a specific bank account. In practice, it controls two things:
Which bank account is suggested in the Deposit Account dropdown when you manually use Receive Payment for a deposit charge. You can still select a different account if you choose.
Which bank account the deposit is associated with for reporting purposes — this affects how deposits show up on the balance sheet, deposit reports, and property-level financials.
It does not:
Redirect tenant ePay/online payments away from the operating account.
Automatically transfer funds between bank accounts.
Create a real-world separation of operating and escrow funds.
Where Deposit Funds Actually Go
When a tenant pays online (ePay / Tenant Portal)
Online payments always go into the property's default operating account, regardless of how the lease deposits account is set. This is a system limitation — the tenant portal can only submit ePay transactions to a single connected operating bank account per property.
This means: if a tenant pays a security deposit online, the funds land in your operating account next to rent and other income. Nothing in DoorLoop automatically moves them to a separate escrow bank account.
When you manually receive payment (cash, check, money order)
When you record a deposit payment manually using Receive Payment, the Deposit Account field defaults to whichever account is set as the lease operating account on the property — but you can change it. Whichever account you select is where the funds will be associated.
This means: for offline payments, you can route deposits to a separate escrow bank account at the time of payment — if you've already set up that escrow account in DoorLoop and selected it in the Deposit Account field.
Manually Route Deposits to a Separate Escrow Bank Account
If you need deposit funds physically held in a separate escrow bank account — whether for state compliance or accounting practice — here's how to do it.
Setup (one-time per property)
Add a separate escrow bank account in DoorLoop under Accounting → Transactions → + New Account (Asset > Bank). Give it a clear name like Security Deposit Escrow so it's easy to identify.
Set this account as the lease deposits account on each property under Rentals → Properties → [property] → Settings → Bank Accounts.
This setup ensures deposits are associated with the escrow account in DoorLoop's books. You still need to physically move the money, covered next.
For online (ePay) deposits — perform a bank transfer
Online deposit payments will always land in the operating account first. To physically move them to the escrow account:
Confirm the deposit payment has been received and shows in your operating account.
Perform a real-world bank transfer from your operating bank account to your escrow bank account for the deposit amount.
Record the transfer in DoorLoop using a Bank Transfer — Source Account: operating, Receiving Account: escrow.
Note: Recording the transfer in DoorLoop does not move the money in real life. You must initiate the actual transfer at your bank.
For offline deposits (cash, check, money order) — select the escrow account at payment
When using Receive Payment for a deposit paid outside DoorLoop, change the Deposit Account field to your escrow bank account before saving. This associates the funds with the escrow account directly — no transfer required, as long as you physically deposit the funds into the escrow account at your bank.
Why This Matters for Compliance
Many states require security deposits to be held in a segregated account. Examples include:
New York — security deposits must be held in a trust account separate from the landlord's personal funds, in a bank within New York State.
Massachusetts — security deposits must be held in a separate, interest-bearing account in a Massachusetts bank.
New Jersey, Florida, Maryland, and others — have variations of segregation, notification, or interest-bearing requirements.
If you're subject to any of these, simply selecting an escrow account in the property settings is not sufficient. You must:
Open a real, separate bank account at your financial institution.
Add it to DoorLoop and set it as the lease deposits account on the property.
Physically move deposit funds into that bank account — either by selecting it at the time of payment (offline) or by performing a bank transfer after receipt (online).
Note: This article describes how DoorLoop tracks fund flow; it is not legal advice. Consult an attorney or your state's landlord-tenant statutes to confirm what your jurisdiction requires.
Common Questions
Why doesn't DoorLoop automatically split online payments between operating and escrow accounts?
Tenant portal ePay deposits the full payment amount into a single connected operating bank account — this is a banking and payment processor limitation, not a DoorLoop policy. Splitting a single tenant payment across two real bank accounts isn't possible at the payment level. The workaround is the bank transfer described above.
Can I make my escrow account the default for online tenant payments?
No. The default operating account is the only account that can receive ePay funds from the tenant portal. The lease deposits account setting controls reporting and the manual Receive Payment default, not online payment routing.
My balance sheet shows the deposit as a liability — isn't that the same as it being in escrow?
No. The liability on your balance sheet means you owe the deposit back to the tenant. The bank account the funds are physically held in is a separate question. A deposit can be recorded as a liability while still sitting in your operating bank account commingled with rent — which is exactly the situation many customers don't realize they're in.
To verify where deposit funds physically are:
Open the bank account register in Accounting → Transactions for both your operating and escrow accounts.
Trace deposit payments by date — they'll show up in whichever bank account they were actually deposited into, not necessarily the one set as the "lease deposits account."