Fired property management company. get my tenants deposit back?

Question

ok so this gets messy. I'm in the middle of a divorce, my original rental management company was my soon to be ex wifes father figure. (no relation via marriage or blood). I fired him before the tenants moved in. However, he somehow got a hold of my tenants deposit. I would like to get that deposit into my hands, since I am the landlord and sole owner of the house. The rental contract is between myself and my tenant only. I have an excellent divorce attorney but I don't believe she is an expert in rental law. The house is in Alabama, but the management company is in Atlanta GA.

Can I ask for this deposit back?
Should I put a reasonable timeline on returning the deposit?
If this guy says 'no' to returning the deposit, what should I do then?

I'm a new landlord, my tenants are super awesome. But I want to make sure they get their deposit back should they decide to leave.

Jeff B. · Answer

Ouch. Inform them that you know they are unlicensed in AL AND that withhold deposits is Extortion and Misappropriation of funds.they can return said funds in 14 business days by Cashier's Check OR face reports to State agencies and local District Attorney.

John Thedford · Answer

I would think 15 days is more than adequate time for them to send it to you. Just type a letter stating they are in possession of security deposits that belong to your tenants, that they no longer manage the property, and that you need those remitted to you. I am sure you have laws requiring how your handle the deposits, and make sure you follow those. Google Georgia landlord-tenant statutes and find any sections relating to deposits and how those must be handled. For example, in FL a landlord MUST notify the tenant within 30 days of signing a lease where their deposits are held, if the deposits are in an interest or non-interest bearing account, etc. We are required to house them in a banking institution WITHIN the state. You may have similar laws. If they are PM, they surely know the laws as well. Once you obtain the deposits, make sure you handle them as required by law. You may be required to notify the tenants that you are now in possession of them, etc. Remember--security deposits are NOT your money but they ARE your responsibility.

John Thedford · Answer

Make a demand via certified mail to return all deposits. Include where you want them returned to. Put a timeline on it (reasonable). If they refuse, then report them to the state. Make sure you have all your documentation if needed.

Shaun Patterson · Answer

@Matthew Knudsen Not sure why this guy would risk his license just because of a divorce. I understand if he wants to take sides but business should be different from family matters in this situation. Hope he comes to his sense on this one.

Lorayne McKelvy-Morris · Answer

You mentioned that the rental company was licensed in Georgia. If the license he holds is a real estate license, you should let him know you will file a complaint with the Georgia Real Estate Commission. Most States have very specific laws regarding the handling of trust fund security & trust fund rents. Google for the GA Real Estate Commission, then do a search for "property management." Theoretically, the funds should have been turned over when the contract was terminated. Assuming, of course, that there was a contract? Mismanagement of trust fund money is a big deal & licenses have been revoked, suspended or sanctioned when mismanagement is proven.

Matthew Knudsen · Answer

Ok, so I sent the demand letter last Tuesday. I gave him 5 days to respond. I didn't make any legal threats, but I did mention: "By law the tenants deposit needs to be held by their respective landlord." So now I wait.... I fully expect him to completely ignore my request. I don't exactly want to get into a legal battle with this guy. But I will make contact with the local DA late in week (thinking Thursday). However, before I contact the DA I have to check with my divorce attorney. She may have other plans for that deposit. They stole a rental check from me already and my ex was forced to use that as support for 2 months. I assume she may use that tactic again. We shall see. I will update this thread as it all unfolds. For no other reason than pure entertainment.

John Patton · Answer

Question? How much is the deposit? How much is the lawyer? The only one making money is the lawyer if I was guessing. Maybe, just maybe, you just write it off as a loss for tax purposes and your hip pocket as an education in life. I have a lots of those. LOL. Good luck. JP

Matthew Knudsen · Answer

@Robert @Robert Gilstrap The company is licensed in GA but not AL.

Robert Gilstrap · Answer

@Matthew Knudsen Soooooo is the management company located in Atlanta actually licensed in Alabama? If not, how are they conducting business there and if not that might be a potential motivator to get them to hand over the deposit $$.

Matthew Knudsen · Answer

@John Thedford is 15 days a reasonable amount of time? Is there a specific format for a "demand" letter?