[RPPTL LandTen] Consumer Lawyer/Insurance regulation lawyer question

[Harry Heist]

Here are 2 more spreading fast.

 

Please take the time to read this when you can as it is becoming very
common. 

 

1.      Tenant is not required to pay a Security Deposit and they are given
an optional "method".  Tenant pays a set FEE to the Property magager, more
or less than 1/12 of what would have been the deposit each month as a
NONREFUNDABLE FEE and even continues this upon renewals!!  Property manager
guarantees the property owner an amount equal to what the deposit would have
normally been if the tenant damages the place or owes rent (from property
manager's pocket) and sometimes even an additional month of rent if the
tenant defaults.  Property manager pockets the money each month as a FEE.
Owner is not even aware of the scheme. 

 

No damages, property manager makes out like a bandit.  Is this legal???  The
tenant is paying for the privilege/convenience of not having to pay a
security deposit BUT is not using a licensed product.

 

THIS IS A FORM OF INSURANCE IS IT NOT? The tenant though is not being
"insured", but the owner is and the property manager is pocketing a large
sum of money.

This particular scheme preys on people who do not have a security deposit to
pay.   

 

The property manager is arguing with me that this is NOT insurance as the
OWNER is not paying the "premium". 

 

In this situation, a tenant actually could end up paying far more in
nonrefundable FEES than if he had paid a normal security deposit and people
are eating this up!   

 

Next one:

 

2.     Property manager charges a pet fee or pet rent to tenant. Property
manager pockets this pet fee or pet rent.  If there is pet damage, property
manager will pay up to $XXX for pet damage.   THIS IS CLEARLY AN INSURANCE
PRODUCT IS IT NOT?   No pet damage, property manager makes out like a
bandit.  Pet damage? Property manager has a limit as to what they will
cover.

 

I am trying to explain why both of these could be insurance, violate the
security deposit statute, illegal or an unfair and deceptive trade practice
but can't seem to wrap my head around exactly why.

 

Now, there ARE licensed insurance companies that provide this type of
service.   Obligo, Rhino, Leaselock and SureDeposit are but a few.

 

THESE above are all done in house and are a HUGE profit center now for some
property managers and cost far more than the licensed products.

 

Any real expects out there before some huge class actions start?

 

I am willing to pay for solid advice. 

 

Trust me on this.  Your single family home managers are beginning to do it
and it is increasing their profits dramatically.

 

The whole fiduciary duty thing is also disturbing.  If a property manager
has a choice between accepting a tenant who will pay the standard security
deposit OR one who wants to pay a nonrefundable FEE each month to the
property manager, who are they going to pick? 

 

Harry

 

LAW OFFICES OF 
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:   <http://www.evict.com/> www.evict.com 
Email:  <mailto:harry at evict.com> harry at evict.com



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