Trust Account Auditor Ted Gayle has found that an alarming number of property managers are engaging in a highly improper practice: In short, they are using one client's money (rental income) to pay another client's expenses.
For example, the property manager will spend $700.00 to repair Owner A's roof, when he has collected only $200.00 in rent from Owner A's property(ies). The balance ($500.00) comes from rents which he has collected from properties owned by his other clients.
Property managers are cautioned to immediately discontinue this practice. (Acceptable alternative methods are described in the Board's Trust Account Guidelines.)