Property Manager - question on funds handling process

[David Beard]

For you seasoned landlords and PMs, I was wondering your thoughts on this language in a PM contract, related to funds handling. Thanks!

"4. ______ ______ If this line is initialed, Owner agrees to open a checking account (with debit card) at either [bank 1], [bank 2], or [bank 3], to add [PM named by person] as an authorized signatory to the account, and to provide [him/her] with a debit card for the account. All rent payments will be received in Owner’s name and deposited into said account. Owner agrees to notify Manager at least twenty-four (24) hours prior to withdrawing any funds from said account. Financial reports will be provided to Owner for the previous month, following reconciliation. Owner agrees that all security deposits will be placed in said account.
--OR--
______ ______ If this line is initialed, Owner agrees to provide to Manager deposit information and a debit card (for materials purchases to be used on the Property) for a bank account at either [bank 1], [bank 2], or [bank 3]. Manager agrees to deposit all rent receipts into said account. Manager will submit to Owner invoices relating to the Property as they are received, and Owner agrees to pay invoices within five (5) days of receipt. Owner agrees that all security deposits will be placed in said account. "
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To their credit, this PM is very transparent and does no up-charging on outside service work that is needed, and has developed a very good reputation over a long period of time. That said, I'm leery about adding them as a signatory on my bank account.

[Steve Babiak]

In my state, the security deposit money can/should not be placed into your operating account.

Is this PM "bonded"? By that, I mean that they post a bond that is intended to cover your funds should they misbehave.

It's almost similar to how I have bills paid at my house where I live; I let the creditor do ACH transactions to get paid directly from the account; of course, they are obligated to inform in advance of the date and amount of any withdrawal. The main difference is that this PM will be able to sign anything to pay anybody (including themselves), whether a legitimate expense or not.

So what would your recourse be in the event of misbehavior on the part of the PM?