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Tenants entered into a lease and deposited a security deposit with landlord’s property manager.  At the end of the lease, the manager attempted to contact the landlord to gain access to the property to perform an inspection.  When the landlord did not  respond after a week, the property manager terminated their management contract and, the following week, sent the keys and the deposit to the landlord.   Neither the manager nor the landlord ever made a claim against  the deposit.  The landlord cashed the deposit check two months ager the lease ended.  In the meantime, the property manager directed the tenants to contact the landlord directly.  the landlord never responded.  It turned out that the property had been in foreclosure during the entire lease term, and the landlord had consented to a judgment of foreclosure a few days after cashing the security deposit check.

When the tenants did not get their deposit back, they sued the property manager.  The property manager moved to dismiss for failure to name the landlord, who they had transferred the deposit money to.   The court disagreed, ruling that the  property manager was only authorized to transfer the deposit funds  upon a change in either the manager or of the landlord.  As neither had changed, the property manager was responsible for the security deposit.  The court ruled that the property manager had a responsibility to both the landlord and the tenant over the security deposit, as it was the tenant’s money until the landlord had made a claim against it.

STRESS FREE PROPERTY MGMT, INC., vs. JONES,  Circuit Court, 13th Judicial Circuit (Appellate) in and for Hillsborough County.. March 19, 2015 22 Fla. L. Weekly Supp. 1006a