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I am writing this under real estate but if it needs to be moved please let me know
Facts:
Daughter is a property manager for rentals at a real estate office. She has worked for the firm 5 years but has been in this position since Jan 2022 when she acquired her PM license. The director left at that time and they interviewed for another director. After several months and no one was hired they gave the position to my daughter.
She was never involved with the financial end of the business. She never wrote checks or was aware of how the bookkeeper was paying vendors. Her mistake (yes, a big one) is that she didn’t always get approval from the homeowners before getting the repairs taken care of. Not an excuse, merely an explanation was that she was overwhelmed, the repairs in her opinion had to be done and she just moved forward and had them taken care of. She kept excellent records and submitted everything properly to the bookkeeper who issued the checks. My daughter assumed it was from operating expenses but has come to learn it was being taken from a trust fund account. She had no way of knowing this.
She found out that some of the homeowners that did not give their approval will not pay their bill. It also seems that the bookkeeper took the money out of the wrong account and that is why no one noticed the account dwindling (personally this makes no sense…isn’t anyone monitoring the finances of all the accounts? Isn’t anyone supervising someone inexperienced in this new position.
They want my daughter to be financially responsible for this amount ($10,000). They said if they recoup any money they will refund her. They admitted there was absolutely no wrongdoing as far as misuse of funds. Merely a loss due to unintentional mistake.
We live in South Carolina. Can an employer hold an employee financially responsible for a mistake in the normal course of business? Again, there was no misuse or inappropriate use of funds.
Should we contact an attorney? If so, what type?
Any other questions please ask as I want to be as transparent as possible to get the information we need.
Yes to attorney. I'm in NC and this would be very serious here.
Her license is likely at stake.
She needs an attorney with experience defending licensees against claims like this and disciplinary action from the regulatory agency.
You might ask Brandon Hoffman for input.
He's a knowledgeable SC agent and can probably advise you better than about anyone else who might chime in on this.
Yes to attorney. I'm in NC and this would be very serious here.
Her license is likely at stake.
She needs an attorney with experience defending licensees against claims like this and disciplinary action from the regulatory agency.
You might ask Brandon Hoffman for input.
He's a knowledgeable SC agent and can probably advise you better than about anyone else who might chime in on this.
Agreed. In Oregon, she would likely lose her license. Not sure how they train property managers in SC, but here it is clear that funds are in a client trust account and they have strict monetary tracking rules. Out here real estate agents and the PM are responsible for the books. They can hire a bookkeeper, but that doesn't absolve them of responsibility and accounting. Authorizing repairs without permission would be a big problem here.
This is why real estate brokerages carry errors and omissions insurance.
Does she have E&O insurance? Does the property itself carry association insurance for the Board and property manager's actions? She needs here own attorney to advise her, but don't let the Board or owners try an cast all the blame on her.
Seems there are two different problems here. One is not getting authorization. I have a house under management and the contract states I give authorization for expenses over 300, otherwise what's the point of management if you are pestered by every little thing. Were the repairs an emergency? Seems state law might have allowances for that.
Second issue is checks being written on a trust fund. Is that the fund for deposits? Definitely not allowed but that's on the bookkeeper. Is the daughter responsible for the bookkeeper? That's a question for the lawyer.
So I agree the daughter should lawyer up but not sure it comes to criminal malfeasance on her part.
Does she have E&O insurance? Does the property itself carry association insurance for the Board and property manager's actions? She needs here own attorney to advise her, but don't let the Board or owners try an cast all the blame on her.
She says she has E&O insurance.
She also states she never told the bookkeeper which account to take it out of. She had no access to anything financial. The computer printout she has shows a screen that has all of the accounts on a top corner. It says Operating, Trust and Escrow. She never got involved in which account it came out of.
Tomorrow morning she will start contacting an attorney.
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