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Updated over 9 years ago on . Most recent reply
My property manager passed away
Very unique situation here. We own a property in TN that was managed by a property manager who had been in real estate for 30 years. He knew the business and was a one man show for his property management company. Well, he passed away a few weeks ago and we found out yesterday. His children went in and shut down his business. They shut off his phones and the whole situation is a mess. There will be a lot of stuff coming from this. But, we signed a contract with him that we have been informed is null and void at the time of his death. The problem is our tenant has their deposit sitting with his company in an escrow account. It will be a while before that money will be dispersed back to them. The man's three businesses were in a mess and there are lawyers involved. In the mean time we need a new property manager. The tenants will be moving out about June 2016. So the question is: do we charge them another deposit (I would rather not). Just wondering if anyone has any creative ideas for the deposit. Thanks!
Most Popular Reply
@Sarah Bookout, what grounds do you have for charging another deposit? I would absolutely not ask the tenant for any additional money, but rather send them a note explaining the situation and letting them know where the rent checks should now be sent.
If you cannot cover returning their deposit, you should start saving up to be able to do so. You have a specific amount of time to return the deposit after they move out, per state law.
I would also contact the attorneys involved and let them know the property manager was holding $XXX for a tenant's security deposit, and see how they are proceeding with claims. The manager should be holding the deposit in a special account and it doesn't belong to him or you, but rather the tenants. If his businesses are in a mess, it is entirely possible that it is gone, but that doesn't absolve you of the responsibility of returning it to your tenant upon termination of the contract, no matter what happened to it.
