I'm a manager in Georgia. I have had to terminate management services while a tenant is still living in the home and has a valid lease. I gave the owner a 30-day notice around January 3, 2018. If the owner and tenant won't sign an agreement about how to disburse the deposit, how do I proceed? The owner and tenant have signed a new lease effective February 1, 2018, and, of course, the owner wants me to send him the deposit I have in our trust account.

You are not terminating the lease; you are terminating management services. The lease (you said) only says the deposit must be disbursed when the lease is terminated. This would be the same deal as if two private investors bought/sold a rental....the deposit goes to the new owner, or as we often say, "The deposit stays with the lease." The new manager is now the owner. Deposit goes to them.

If the owner wants to draft a new lease for the tenant to sign, that's their business...the rental agreement still hasn't terminated: it's just being extended/renegotiated under different terms.

The security deposit is transferred back to LL. The tenant is not leaving and has signed a renewal lease. Assuming that the new lease still requires a security deposit then it cannot be given to the tenant.

The PM needs to write a check directly to the LL. The LL and PM need to have a signed and notarized document stipulating that the check represents the SD of x tenant residing at x property.

The PM need to send a copy of that doc and a copy of the check to the tenant. The LL needs to send a notice to the tenant indicating the name of the bank and address where the trust account is deposited within a specified number of days - it should follow the same terms as the lease.

If the landlord owns less than 10 properties in GA they are allowed to receive the SD. However, the rules of the SD require the LL to either deposit the check into a trust account OR get a surety bond. They are not entitled to simply take the SD and co-mingle or pocket the money.

jOHN:

If the new LL (Owner) refuses to sign, that isn't your problem. Send a check, with a letter. In the letter, inform them that you are transferring the deposit of $Xxx to them, to be deposited into their trust account per GA law (reference statuate). CC the letter to the tenant.

Keep a copy of the letter and the cashed check in your files for your protection. Send a copy of the check in sheet to the new LL and tenant in the same letter.

John, the new owner doesn't have to sign anything. Send them the certified check with a note on the memo line: "Security deposit for Bob and Mary Smith at 123 Anywhere Ave". Keep a copy of the canceled check and the stub from your bank showing to whom and for how much the check was made out in your files showing they received the funds. Send a note to the tenants informing them that their deposit was transferred.

If they refuse to cash it, simply move the funds to an escrow account, keep all the documentation and paperwork.