FACTS:                    

The agent entered into the Arizona REALTORS® Property Management Agreement with the owner.  Upon the expiration of the tenancy of an 82-year-old tenant, the owner insisted that the agent take a position with respect to the security deposit that the agent believed was not justified.  The dispute escalated to the point that the owner terminated the agent, “effective immediately.”  The owner also demanded that the agent transfer the security deposits to the owner.  The agent believes the owner will take advantage of the 82-year-old tenant and does not want to transfer the security deposits to the owner. 

ISSUE:                      

Is the agent obligated to transfer the security deposits to the owner?

ANSWER:                

See Discussion.

DISCUSSION:         

Lines 31-34 of the Property Management Agreement provides that in the event of termination, the agent must transfer “any refundable tenant deposits to the Owner after notice has been given to the tenant as required by law.”  Thus, the agent is contractually obligated to provide notice to the tenant and transfer the deposits to the owner.