Is it against the rules for the property manager to transfer the security deposits back to the owners. Our property manager has quit and said that if we take it over she has to give the security deposits back to tenants. She can only transfer to another management co.

Read your contract with them, but you as the property owner are the owner of the security deposits. They should be in a bank account under a custodial account that you own and they merely manage.

ANY question on law needs to include your general locale as laws vary by area.

But as Chuck said, this is something usually spelled out in a contract.

The apartments are in Salinas, California. I looked over the contract and it says nothing about only being able to transfer funds to a "qualified property manager". We have had a problem with Backus Propertyy Management from the beginning acting as if they were the owners and not letting us have any say in anything. We demanded a few things this last month and now she has quit but is giving us this new problem. She said as a rule she can only transfer to a qualified property manager or she will have to give it back to the tenants. What rules can she be talking about? Where can I find out about city laws and ordinances? Thanks.

The apartments are in Salinas, California. I looked over the contract and it says nothing about only being able to transfer funds to a "qualified property manager". We have had a problem with Backus Propertyy Management from the beginning acting as if they were the owners and not letting us have any say in anything. We demanded a few things this last month and now she has quit but is giving us this new problem. She said as a rule she can only transfer to a qualified property manager or she will have to give it back to the tenants. What rules can she be talking about? Where can I find out about city laws and ordinances? Thanks.

I doubt that it would be a matter of city ordinance. California Business and Professional Code, Sections 10230-10236.6 regulate realtors in your state. I don't see anything there about deposits, but if you look carefully it might be there.

Or it could be found in the California Landlord Tenant Act, concerning deposits.

It may be a term of the security agreement. In other words, your property management company may have accepted the deposits under written agreements with the tenants which prohibit them from delivering the funds to the owner.

Hello J:

I'd simply demand that she return them by (whatever date you set), or you'll sue her for them... Inform her by certified letter, return receipt requested.

Clearly, there's nothing in your contract that allows her to do that and there's nothing in state law that does, either. You can sue for up to $7,500 in California.

excon

I agree with excon. If they believe they are legally bound tell them to cite the law they think protects them. If they can't give you such a cite, then tell them to turn the money over or you will sue.