Property management company went bankrupt

[Ekaterina S.]

So my property management company filed for bankruptcy (Enhanced Property LLC, managed by Keeyana Garrett, there was a post from several landlords, who had properties with them). I had one property with them and they had a tenant's deposit (besides several months of rent and a reserve). I purchased this property from the person/company who also managed it. They transferred the deposit to the Enhanced Property LLC, which after a year of managing my property went under. So I never had that deposit, and now it's gone.

Am I legally responsible to give the tenant their deposit from my pocket when the time comes, or can I show them the bankruptcy papers that Enhanced Property/court sent me?

Will greatly appreciate your advice!

[Drew Sygit]

@Ekaterina S. While everything stated above is true, it's highly probable that a judge would force an owner to refund the security deposit to the tenant and tell the owner they need to pursue the PMC they hired as their agent, to recover the funds.

There was a company in the Detroit area that went out of business a few years ago named Castle Property Management. They didn't file bankruptcy and also didn't refund security deposits. Not aware of any property owners that sued the company owners. FYI the company was only arond for about 3 years and went out of business because their flat fee model was not sustainable.