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3/19/2026
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House OKs Knight bill facilitating escrow accounts
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Special accounts could be used by landlords for tenants’ deposits
STATE HOUSE – The House today approved legislation sponsored by Rep. Jason Knight that would better enable financial institutions to offer escrow accounts to the general public.
Escrow accounts are a tool commonly used by corporations to hold money belonging to clients. Mortgage holders use them to hold their funds collected from mortgagors for expenses such as property tax and insurance. Lawyers often use them to collect and pay out funds belonging to their clients.
Representative Knight’s legislation (2026-H 7265) establishes limits and protections for such “special deposits” by individuals, to be governed by an account agreement between the bank and the depositor or its beneficiary.
While there are a variety of reasons a person might want to establish an escrow account, one common situation where it would be beneficial is for tenants’ deposits held by landlords.
“Having an escrow account would help small landlords keep their tenants’ security and other deposits separate from their own funds, and would protect tenants if their landlord were to go bankrupt. In that situation, their deposit wouldn’t be entangled in the bankruptcy, so they wouldn’t run into problems getting it back,” said Representative Knight (D-Dist. 67, Barrington, Warren).
The bill, which was developed by the Uniform Law Commission and has been adopted in 12 states including New York, does not require landlords to place deposits in escrow accounts; it simply facilitates their use as a tool by anyone.
The legislation now goes to the Senate, where Sen. Mark McKenney (D-Dist. 30, Warwick) has filed companion legislation (2026-S 2519).
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903
(401) 222-1923
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