Anyone know what legal action I can take in Milwaukee, WI as I fired my property manager and he is not Transferring our tenant's security deposits either back to us or to our new property managers? Is this just straight theft and do the tenants need to sue him since it's their money or can I?
Sounds like attorney time. I'm thinking that you as the owner have the ultimate responsibility for the security deposits. Their lease is for your property and the PM was representing you. Good luck with that.
I'm not a lawyer (although I'd be contacting one), but I'm fairly certain you are going to be owing the tenants their security deposits back, regardless of whether or not you get it back from your old PM.
Do you really think it's the tenant's responsibility to get their money back that you are holding? You are obviously responsible for the property manager, not them. Good luck
I agree with the above answers. Also, what did the PM say when you asked them about the security deposits?
The security deposits do not belong to the PM or to you, but are held in-trust and belong to the tenant until such time as they forfeit them to pay for debts or damages.
Not only must the PM send the security deposits to you or your new agent, but depending on the legislation in Wisconsin, s/he might also have to include the accumulated interest on each deposit.
Sounds like the PM is not holding the deposits in trust and perhaps has spent the monies. It may be time for a polite letter from your solicitor explaining the law.
As @Terry Hoefer said it sounds like attorney time.
The property management is the agent of the landlord and works for the landlord.
The landlord is overall responsible for the tenant security deposit.
Check with your new management company to see if they know of any good real estate attorneys in the area.
You may also want to check to see if property managers are required to be licensed by the Real Estate Commission to do property management which may give you further recourse.
I would definitely let them know that if they do not return the tenant security deposits very quickly that you would engage real estate attorney.
Send them a written demand letter certified, regular mail and email stating that they need to immediately transfer the tenant security deposits to you or your new management company within a few days. I would give them a set date and if the security deposits were not transferred on that date immediately have an attorney ready to go to take action.
Unfortunately, I have seen poor management companies mishandle their bookkeeping and accounting and were either unable to return the security deposit due to bad management practices, or simply embezzled the funds.
It Is like anything else, whether it be attorneys, doctors, roofers, etc. there is good and bad.
I strongly encourage landlords and investors when looking for a good property management company to go to the National Association of Residential Property Managers website: www.NARPM.org
Good property management pays for itself, while poor property management can cost an landlord thousands of dollars.
I sincerely hope you are able to recover the funds.
I totally agree with Darren Budahn
Trust account for security deposits
Which property manager in Milwaukee? I know of at least one bad one, but it would be good to know what else is out there.
@JJ Bliss If your PMs are real estate licensees, call the Real Estate Commission in your state. That should get their attention pretty quickly!