My question involves landlord-tenant law in the State of: Colorado
Hello everyone. This is my first post.
I own a townhouse in the state of Colorado. 18 months ago I moved out of state and used a local property manager, Larry, to find a tenant and manage the property. He eventually found a tenant and I was reasonably happy with his services.
Several months later I receive an email from the state of Colorado stating that Larry's real estate license had been relinquished, without an explanation. Within a couple of hours I receive an email from another property management company from my town stating that they had purchased the assets of his company. This is an excerpt from the email:
"Larry" has sold the business assets to "New property managers". The good news is that your Property management agreement and leases with your residents shall remain in force and no other changes will occur unless it is a benefit to your agreement.
Ok, it looked fine to me at the time. A few months later my tenant signed another contract in the summer and still has 6 months left on the lease.
Then, I received this email out of the blue yesterday:
"Some good news is that a portion of monies have been allocated to the Tenant Deposit account. However, we still have an overall shortfall. This short fall is calculated after a forensic audit of the tenant leases and known deposits. Each owner has in our account $.64 cents on the dollar, meaning we have a shortfall of
$.36 cents on each dollar. Our goal is to be able to collect this money for the Tenant and make the accounts “whole” before an audit or Tenant request of their account makes you pay “treble” (triple) damages. Colorado Revised Statutes § 38-12-101, 38-12-102 & 38-12-103, section 3a"
I immediately called and spoke with the owner of the new property management company. He informed me that Larry stole all the security deposits from the properties that he was managing and that they were working to get the money back. The new property manager says that I am liable for the security deposit shortfall and that there is a pending lawsuit against Larry to recover the missing funds. The new property manager claimed that he did not purchase Larry's company but even still decided to deposit $75,000 into the security deposit account - there was apparently nothing there previously.
I looked up the statute from the email and it uses the terminology "landlord". On the tenant's old contract with Larry, he is listed as the agent and I am the landlord. However, on the new lease signed last summer, my name isn't present and the property management company is listed as the landlord. I am wondering if I am liable for the security deposit shortfall for a couple of reasons:
1. The current contract with tenant doesn't mention me by name and refers to the property manager as the landlord.
2. Stealing a security deposit is outside the scope of business for what I hired Larry to do. Am I liable even if the agent is acting outside of our contract and how a reasonable person expects a property manager to act?
Also, I'm just curious why the new company decided to add his $75,000 to the security deposit pool if he isn't liable for the shortfall in the first place?
Thank you for taking the time to read my long post!
Hello everyone. This is my first post.
I own a townhouse in the state of Colorado. 18 months ago I moved out of state and used a local property manager, Larry, to find a tenant and manage the property. He eventually found a tenant and I was reasonably happy with his services.
Several months later I receive an email from the state of Colorado stating that Larry's real estate license had been relinquished, without an explanation. Within a couple of hours I receive an email from another property management company from my town stating that they had purchased the assets of his company. This is an excerpt from the email:
"Larry" has sold the business assets to "New property managers". The good news is that your Property management agreement and leases with your residents shall remain in force and no other changes will occur unless it is a benefit to your agreement.
Ok, it looked fine to me at the time. A few months later my tenant signed another contract in the summer and still has 6 months left on the lease.
Then, I received this email out of the blue yesterday:
"Some good news is that a portion of monies have been allocated to the Tenant Deposit account. However, we still have an overall shortfall. This short fall is calculated after a forensic audit of the tenant leases and known deposits. Each owner has in our account $.64 cents on the dollar, meaning we have a shortfall of
$.36 cents on each dollar. Our goal is to be able to collect this money for the Tenant and make the accounts “whole” before an audit or Tenant request of their account makes you pay “treble” (triple) damages. Colorado Revised Statutes § 38-12-101, 38-12-102 & 38-12-103, section 3a"
I immediately called and spoke with the owner of the new property management company. He informed me that Larry stole all the security deposits from the properties that he was managing and that they were working to get the money back. The new property manager says that I am liable for the security deposit shortfall and that there is a pending lawsuit against Larry to recover the missing funds. The new property manager claimed that he did not purchase Larry's company but even still decided to deposit $75,000 into the security deposit account - there was apparently nothing there previously.
I looked up the statute from the email and it uses the terminology "landlord". On the tenant's old contract with Larry, he is listed as the agent and I am the landlord. However, on the new lease signed last summer, my name isn't present and the property management company is listed as the landlord. I am wondering if I am liable for the security deposit shortfall for a couple of reasons:
1. The current contract with tenant doesn't mention me by name and refers to the property manager as the landlord.
2. Stealing a security deposit is outside the scope of business for what I hired Larry to do. Am I liable even if the agent is acting outside of our contract and how a reasonable person expects a property manager to act?
Also, I'm just curious why the new company decided to add his $75,000 to the security deposit pool if he isn't liable for the shortfall in the first place?
Thank you for taking the time to read my long post!
Security Deposits: Property Manager Steals the Security Deposit, Who is Liable
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