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Our landlord is not American and lives overseas. His rental is being managed by the property management company he hired. Our lease agreement states both of them as landlords. Per the request of the management company, we are in the process of revising a payment detail on our lease that stipulates that our payments shall now be transferred to his bank instead of the property management's account. However, we were surprised to receive an updated lease page that also states that our security deposit, which was previously" held in the owner's broker's trust account" is now "transferred to and held by the owner of the premises".
We have discovered after leasing this place many complaints regarding the unprofessional practices of this property management company from both landlords and tenants; many of them were concerning lost security deposits. We feel that this addendum regarding the security deposit raises a red flag as we think that we won't be able to serve our landlords papers should any problems arise after our lease ends so we do not wish to sign this revision.
I know that by law small revisions regarding payment methods, pets etc. can be made throughout the lease period, but what about this security deposit addendum? Can I still take the property management to court if I ever need to since they are still listed as landlords or are my worries founded?
As long as your lease agreement remains with both owner and PMC listed as "landlord" I can't see that you'll have a problem if anything does go sufficiently awry that you end up having to go to court for resolution. I'd suggest you have an attorney who specializes in real estate rentals carefully look over your lease to ensure that you're covered. Good luck!
I would worry about it. There is no reason for a honest LL to do this. Especially if there is a property management company involved. Usually the LL gets a PMC because he specifically doesn't want to deal with tenants. For me personally a sec dep is just that. I don't leverage it or screw people over on it. I don't use it or invest it.
If the LL wants access to your security deposit it could mean anything from he wants to invest the money or wants access for some unknown reason. Or could be he wants it as a statement of funds account for some purchase
I wouldn't agree to have it transfered if it's a option. I would run it by a RE lawyer.
Thank you both for your answers. I called an agency, a lawyer and received conflicting answers. One stated that if the lease stipulates that any notice is to be delivered to the PMC; then we are good. The other seems to think that they are trying to get away from certain aspects of the management by not processing funds etc. and asked for us to take an appointment for more in depth analysis which I can't do for a while as I will be going out of town. Any other input would be appreciated.
... and asked for us to take an appointment for more in depth analysis which I can't do for a while as I will be going out of town.
In my opinion your question can be addressed by an attorney without a personal "in depth analysis". An attorney knowledgeable about your state landlord tenant laws and with a copy of your lease in hand and any other relevant documentation (such as this "lease amendment" you've been given) can advise you.
In depth analysis? I agree with SST there is no reason for that. A knowledgeable lawyer would know the answer. Even if he was getting rid of the management company the PMC would have to surrender the funds
I guess maybe I'm just a suspicious person, but do you know your landlord? And how long have you lived there? I'm asking because you say they are not American, and reside overseas... so now you will be paying your rent and turning over your security to someone not even in this country? Personally, I just wouldn't do it. Do you know anything at all about them, or have you just been told all this by a management company supposedly representing them? Sounds like a good way to take your money & run.
I believe what the attorney may be concerned about is if your state law makes the owner of the property a landlord and any PMC is an agent. Some laws allow for the owner to terminate the relationship between PMC and tenants via a termination of the PMC's relationship with the owner. So although you may have a lease with the PMC also listed as landlords that can be legally amended without your consent just notification.
My apologies for the late reply. I appreciate each and everyone's input. We have always maintained an excellent reputation as renters so for that reason, have continued to deposit his rent in his American bank account. Now regarding the PMC, the contract we had originally signed clearly states that any notices and papers shall be delivered to the PMC which seems to cover the issue of the deposit should we need to sue them. We have not signed the updated lease as the manager didn't even bother explaining to us what those changes meant for us, after we have requested some clarity. The only point that bothers us, is that it seems that the law protects the interest of the landlords more than those of tenants. I found out after talking to a few agencies that unless a landlord changes the rent or length of the lease most addendum's are usually permitted without giving us the choice to accept them or reject them….
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