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In Connecticut, landlords must hold security deposits in an escrow account. There are penalties if they fail to do so. I don't know the penalties off hand, but your attorney should know. This has nothing to do with the REALTOR Code of Ethics. The part of the Code of Ethics you quoted does not, I believe, pertain to a landlord holding security deposits, but rather to brokerages holding monies in trust for a transaction. Security deposits and how they are to be held are governed by state laws.Also, if the landlord's bank does foreclose on the home, you as a tenant are protected if you have a market-value lease. The foreclosing bank may even be liable to return your security deposit upon your vacating the home (assuming they have already foreclosed on the property).Again, your attorney should know about this and be able to guide you. This refers to recent laws, so they attorney should be well-versed on the recent law updates.
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