Our property manager did not collect full deposit

10 Replies

Hi.  New to BP and wanted to get advice/ feedback about ethical property management behavior.  We've been renting a home for about 4 years and had to evict the last set of tenants. The details make me sick.  Basically, we agreed to rent to a family with less than perfect credit with the condition they pay a $3,000 deposit (house rents for $1,200 per mo).  About 4 months into the lease, the tenants missed their 1st payment.  After asking the PM to find out what was going on, we were told they would pay soon yadda yadda yadda.  We should have started eviction right then but PM convinced us other wise.  I SPECIFICALLY asked if we could start using the deposit and PM advised against this. OF COURSE it didn't work out and by the time we got them out of the property we are out 6 months rent plus unpaid bills, cleaning and other damages.  We've been trying to get the final tally so we can file a judgement and have the security deposit transferred to us.  We just heard from our PM that he didn't collect the full security deposit from the tenants.  

I have two huge problems with this. 1St is that we would never have rented to them if we had known we wouldn't have the deposit as a safety net.  2ND, I'm not sure if I trust the PM.  How do you forget to tell someone you didn't collect the full security deposit and why on earth did he let them move in without it?

Does anyone have suggestions on how we might verify that the $3000 was not collected?  And any PMs out there, if you forgot to collect the agreed upon deposit from tenants what would you suggest as a fair way of handling the situation?

Thanks,

Jen

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@Jen Irving

Emails discussing the deposit are one thing, but does the lease with the tenant show a $3000 deposit?  Did the accounting from the property manager show a $3000 deposit ?

Send a demand letter via certified mail giving the PM (and their broker if applicable) 10 days to provide a copy of the lease, proper accounting for the $$ and any deposit/funds remaining.  If they fail to provide the next step would be to file a complaint with your states real estate commission

In Maryland you cannot collect more than 2 months of rent for a security deposit.   Do you know if by law you can even charge them $3000.00?  That could add to the issue if it is a no...

Hi.  Thanks for the feedback.  Yes, 100% the lease says a $3000 deposit.  I don't know the laws about a deposit limits...that's why we hired and pay a property manager :) The pm is a licensed Realtor and actually the broker/ owner of a local company and manages several other properties.

I've gotten some new info about the situation and no longer  think he may be trying to keep the deposit from us....it really never was collected (there are emails between pm and tenants to this effect).

HOWEVER we were never notified about this.  I can't change the past but I STRONGLY suspect that we would have begun eviction immediately if the pm had let us know hadn't been able to collect the remainder of the deposit. 

I suspect we have just been dumb but I would love to hear from anyone that's had a bad property management experience.  I would also appreciate any recommendations for property managers in the St. Paul MN area.  Finally, if there are any managers out there, how would you have handled this?  Was it our responsibility to make sure he collected the deposit?  The 1St fee months of rent were paid on time so we assumed he had already collected it.

Jen

Honestly, you should tell this realtor that  you expect him to make up the difference on the security deposit. If he doesn't, then go to his broker and tell them the same. If they don't, then threaten to go to the state licensing agency, local real estate board, and every single property manager/real estate agent review website available about what happened. He screwed up.

@ Kimberly H.  Thanks.  This was our feeling but I wanted to hear from someone not involved with the situation.  Unfortunately, our property manager IS the Broker/ Owner of the company but we will start pulling info together for a complaint.  We will also start looking for a new property manager.  I'm not sure what our options are because the house is now rented to tenants the current property manager found.  Thanks again for your input.

Jen

Mishandling trust funds can be pretty serious. Where there is smoke, there is fire.   I'd ask the broker/owner to make this right.  Trust accounting is one of the most important responsibilities a broker has.