Breaking Up with Property Manager Frustrations

[Sally Alcala]

After way too much frustration, I decided to switch property managers, but the process has been a nightmare. The old property management company said they needed 45 days to close out my account. They did send me the final rental payments early, but they’re still holding onto the tenant deposits.

Two weeks ago, I asked when and how they would send me the deposits. They said they would "look into it." I followed up six days ago since I hadn't heard anything, and this time I got no response. Today, I emailed and called again. They reminded me that they have 45 days to wrap things up (there are 5 days left now) and mentioned they’re "looking into the legalities" of giving me the deposits. Apparently, they think they might have to return the deposits directly to the tenants, which makes no sense to me. The tenants are still under lease, so why would they get their deposits back?

They also said they might have to send the deposits to my new property manager. Again, this doesn’t make sense because my new manager has already said they want me to hold onto the deposits.

On top of that, they’re now claiming that I legally need to open a separate account to hold the deposits. I've never heard of any such legal requirement, and at this point, I feel like they’re making things up. This whole situation just confirms how bad this company is, and I can't wait to be done with them.

Here’s my question: What should I do if they miss the 45-day deadline? I’m thinking about consulting a lawyer to get a letter sent, as it feels like they’re inventing laws. Also, are there any legal requirements that they must return the deposits to the tenants during the lease? They’re arguing that the deposits belong to the tenants, but I’ve always understood that the deposits are mine until the tenants move out and the unit is inspected.

Any advice would be much appreciated. I’m beyond frustrated at this point.

[Nathan Gesner]

Quote from @Sally Alcala:

First, this is what happens when you deal with a low-quality property manager. They clearly don't know the law and need to spend 45 days figuring out how to handle a security deposit. That's ridiculous.

Second, they have 45 days. Don't continually harass them with phone calls or emails. Give them your instructions and then allow them the room to breath and figure themselves out.

Third, the 45-day window is expiring soon. If you don't have the money in your hands on day 46, I would call them and demand they transfer the funds immediately to the new PM or you will file a complaint with the state: https://www.dre.ca.gov/consumers/filecomplaint.html

That should motivate them to move immediately. Your new PM can hold the funds or transfer them to you.

As a side note, I'm concerned that your new PM wants you to hold the deposit. That's a red flag that your new PM doesn't know what they are doing.