Security deposit fraud?

Security deposit fraud?

Investor · Riverview, MI · Member since 2015 · 52 posts · 6 votes

So I have a section 8 Tenant that just moved in and paid the security deposit via money order. Section 8 is paying 100% so didn't collect anything for rent. Now a couple weeks later she calls and says that some organization.. united housing coalition? has cut a check to me for the security deposit. Apparently she originally barrowed the money from her aunt(so she says) and needs to pay her back. So shes wanting me not to tell this organization that she already came up with the money and to cash the check and give her the money so she can pay her aunt back. There was no mention of this until she called and said the check is ready to be picked up and she says don't tell them that we already paid the deposit.

So at first I thought this is ridiculous and have no obligation to even go get the check. Then I thought well ill go get the check and charge her accordingly to do so. Then take the remainder and put it as a credit on her balance towards the water bills/future tenant portion of rent that she probably wont pay. If I do that I'm sure shell be upset and more likely to destroy the property. If I do cash the check, and either put it as a credit or give it to her I might be putting myself in the middle of legal trouble. Seems I should tell her we are not going to cash the check and she needs to call them and explain her situation and if they want us to return the check so they can cut a check to her aunt they can do that.

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Landlord · Utica, MI · Member since 2015 · 190 posts · 99 votes
10y

I wouldn't do any of that. I would use the original money order for the security deposit. That all sounds like one big scam.

The minute she's late with rent, file for eviction. She knows shell lose any section 8 she's entitled to if she gets evicted. Let her know right from the start you are not willing to play games with her.

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  • Landlord · Utica, MI · Member since 2015 · 190 posts · 99 votes
    10y

    I wouldn't do any of that. I would use the original money order for the security deposit. That all sounds like one big scam.

    The minute she's late with rent, file for eviction. She knows shell lose any section 8 she's entitled to if she gets evicted. Let her know right from the start you are not willing to play games with her.

  • Allentown, PA · Member since 2014 · 264 posts · 120 votes
    10y

    Honestly the way I would play it is to say, you already paid your deposit, I am having nothing to do with this. This is either her being scammed by someone or her scamming someone, stay away.

    If you have such little faith in her, tell her what you are going to do, if you receive the check you will count it as her last month's rent and you are not going to give her the cash.

    Or I guess you could give her the option, if you get the check, you keep it as last month's rent or you return it, let her decide... what ever you do, put it in writing, no telling how thin the ice is over here.

  • Property Manager · Big Bear Lake, CA · Member since 2013 · 585 posts · 330 votes
    10y

    I agree. I would not get in the middle of that. Sounds like fraud.

  • Investor · Riverview, MI · Member since 2015 · 52 posts · 6 votes
    10y

    I figured this would be the consensus. I decided not get myself involved in this mess. No sense of putting myself in the middle of a potential legal predicament especially just so she can get free money. I knew I should have stayed away from section 8. It has only been 2 weeks since she moved in and theres already problems.  Geez wheres my free money?!?!Thanks for your opinions!

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