The tenant had a $1,500 security deposit. At the move-out inspection, the property manager discovered damage to the walls caused by the tenant. The tenant denied causing the damage to the walls. The property manager got a bid for $500 to repair the walls, and timely sent, i.e. within 14 days after termination of the lease, a letter to the tenant enclosing a check for $1,000 along with an itemization of the $500 in damage to the walls. The tenant claimed that there was no damage to the walls and sued the property manager in small claims court for the return of the $500. Although the tenant’s claim should have been against the landlord, not the property manager, the tenant got a judgment against the property manager for $500. Is the property manager required to inform the Arizona Department of Real Estate of this $500 judgment within ten days?
Yes. A judgment against a real estate licensee involving “any business or transaction in real estate” must be reported to the Arizona Department of Real Estate within ten days. A.A.C. R4-28-301(A)(1)(b); A.A.C. R4-28-301(F).
Arizona REALTOR® Magazine – July 2011