If a property manager deposits a tenant's security deposit into a regular account, this action is classified as?

When a property manager deposits a tenant's security deposit into a regular account, this is considered commingling, which is not permissible. Commingling refers to the mixing of tenant funds with the property manager's personal or operational funds. Security deposits are intended to be held in trust for the benefit of the tenant and must be kept separate from the property manager's own funds.

In South Dakota, and many other jurisdictions, there are specific laws governing the handling of security deposits. These laws typically require that security deposits be held in a separate, designated trust account. This ensures that the funds are protected and can be accounted for at the end of the lease term, when they may be returned to the tenant, less any lawful deductions for damages or unpaid rent.

By failing to deposit the security deposit into a separate trust account, the property manager risks legal repercussions and potential claims of mismanagement from tenants. It is essential for property managers to adhere to these regulations to maintain trust and compliance with the law.