Legal Question in Real Estate Law in California

The management company was negligent and the prior owner also owes the full amount of the two rents paid [has he also improperly kept the security deposits?]. Once escrow closed, the prior owner was not entitled to any additional rental payments and has committed the tort of conversion and is acting as trustee of the money due you. There probably is a clause in the sales agreement for reasonable attorney's fees to enforce the agreement, so you can properly tell him that he has to pay the rents plus attorney fees if he does not immediately return the rent moneys. The best approach after a demand letter [you may need it on an attorney letterhead to get him to pay attention] is to sue in small claims court but you could also sue in limited jurisdiction superior court if he has readily available assets [other property] you can put a lien on so be sure to collect the money plus attorney fees]. He is more likely to react to the latter type of suit than the former, and you can threaten to do it to increase the likelihood of his complying.

The management company was negligent and they might have an errors and omissions or similar insurance coverage for their negligent acts. You need to deal with them separately from the owner so that they do not waste time trying to get the other to pay a larger share of the money owed.

If you want, this is a type of case I have experience in handling. I charge $150 per hour and would first have to review all the written documents to see there was not a loophole through which they could evade liability. You can call me at 510-441-2684 or e-mail me if you wish at [email protected].

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I agree with Mr. Shers, and I'd be inclined to sue both the former owner and the management company in a single superior court-limited jurisdiction case, assuming there is an attorney-fee clause in the sale agreement.

I completely disagree with both prior answers. Unless you had some agreement with the management company, they had NO duty to you to handle the rents properly. You have no contractual connection to them and they owe you not duty of care. Mr. Shers' statement that they were negligent fails first-year law school torts class. The defendant must have a duty of care to the plaintiff for there to be negligence. I must also say I am completely blown away that Mr. Shers would suggest you hire an attorney, even at his discounted rates (you get what you pay for) to prosecute a limited jurisdiction superior court action over a $2,500 small claims case. He obviously does not know that there are penalties for bringing an action in superior court - limited jurisdiction, that could have been brought in small claims, including denial of your attorneys fees even if there is an attorneys fees clause in the relevant agreement. And since you don't have any agreement with the management company, you couldn't get your attorneys fees paid by them anyway in any court. Not to mention the fact that you would be subject to discovery time and expense in superior court - even under the "Under $25,000" limited discovery rules, that can be expensive and troublesome - and would be lucky to get to trial in six months, rather than no discovery and a few weeks to trial in small claims. If the management company still had your money you would clearly have a case against them under old common law counts for return of money and property. I'm not sure you do now that they turned it over to the former owner. You may have a bad check case against the management company as well. Obviously you have an action against the former owner. The bottom line, though is this is a $2,500 case in a state where the jurisdictional limit of small claims just went up to $10,000. Hiring lawyers and suing in superior court is absurd. Forget these money grubbers trying to get you to pay them to file a limited jurisdiction case for you and misleading you that you would be likely to get their fees paid. Most limited jurisdiction superior court judges would take one look at this and deny your fees and costs application while reading you the riot act for wasting judicial resources. Just file a small claims case against both the former owner and the management company and be done with it.