Ex owner stole security deposit & last months rent

[Petur Karlsson]

I bought a triplex at the end of April this year, inheriting all three occupied units, so far so good.

I honor their month to month lease until June, then plan to put the security deposits i received at closing into escrow accounts under the new annual leases i get with all of them.

I come to realize security deposit for the “oldest” tenant was not included at closing and neither was last months rent. The tenant moved in Back in 2006 and the previous owner proclaimed total ignorance and said he didn’t have the lease agreement anymore and never touched the security deposit, pointed fingers at KW that handled the lease for him.

My tenant gets a lawyer that procures the full lease from 2006 and clearly states the money provided for security deposit and last months with ex landlords signature… the tenant is now also saying his money should have been in interest bearing escrow account providing statements to him all this time.

The previous landlord clearly messed up and possibly doesn’t comprehend his own responsibilities. I pursue the realtor that sold the property and him, they basically say “not our problem talk to KW” (note the realtor managed other two units before so no problem there) so I do contact KW and they say they never touched the deposit never have never will, and can’t help me since they become legally liable if they do.

Now the old owner won’t respond to me and I need to get legal counsel on how to retrieve the deposit + last months rent. But first, does anyone of you have experience with something like this and could you provide any advice for me on how to pursue the case? I can try reaching out or have my wife reach out to the guy, but how would I compel him to pay back the funds owed?

He could be in a world of hurt if he failed to hold the deposit in escrow all this time, so by challenging us and forcing us to take the legal route, he’s subjecting himself to a whole can of worms that he’d prefer to not open. I just want closure on this thing, I want the landlord to man up and pay his dues since now I’m liable for that amount myself and that wasn’t part of the deal.

Any advice is greatly appreciated.

Thanks for your help everyone!

*Obviously i wont take your advice in place of legal counsel and you hold no responsibility towards me for expressing your thoughts on the matter*