Question

Property Management Company did not remit Security Deposit and Rental Money to owners. There was misappropriation of funds by the company. Question: Is the owner of the house responsible to pay the security back to the tenant even though the owner did not get the money? The management company has also done this with all property owners.

Answer

Broker should immediately advise property owner to seek legal counsel. Owner needs legal counsel for assistance in determining what actions need to be taken with respect to property management company. With respect to tenant, owner should also consult legal counsel. It would seem highly unlikely that property owner will be able to avoid liability to tenant because the owner's manager stole tenant's deposit. While it is not owner's fault that manager stole the funds, it is also not tenant's fault and the LL/T Act places an obligation to safeguard the funds on owner. Again, broker should advise owner to seek legal counsel.

Date of Posting

10/16/2020

Legal Disclaimer

The Legal Hotline Lawyer does not represent Washington REALTORS® or its members. The advice contained herein does not constitute legal counsel. Please consult with your managing broker for best practices.

Association Name

NORTH PUGET SOUND ASSOCIATION OF REALTORS® INC