Property manager stole security deposit

[Laurence K.]

I'm an out of country landlord from Australia. I bought a property in Cleveland, Ohio on a turnkey basis, my offer was on the condition that the property was tenanted upon purchase.

The seller and his p/m placed a section 8 tenant in the house, I then signed the purchase docs and took title. I then signed an agency agreement with the property manager.

The property manager was holding the security deposit.

Fast forward several years and I received notification that the property management company was closing down. I immediately requested that the tenants security deposit be transferred to me. Despite numerous requests this was never done.

I have filed a complaint with the department of commerce against

1. The principal of the p/m company. The dept. advised that they will not be taking any further action against her, she never renewed her license.

2. The property manager that I had all my dealings with. The dept. advised that they are investigating him.

Since this happened I have been managing this property myself.

My question is , if and when this tenant moves out. What should happen regarding the refund of her security deposit ? Should I just accept it as part of the cost of doing business ?

[Ryan Murdock]

You will ultimately be on the hook to return the deposit to the tenant. Whether it's worth your hassle to chase the PM afterwards is up to you - my guess is it won't be given the distance.