This author addresses two points in this article. First, a recent Florida case acknowledges that landlords have a legal interest in security deposits held under a property management agreement and that misuse of the deposit is actionable by the landlord against the broker. Second, the implications of this decision support this author’s opinion that real estate brokers do not need to wait for court adjudication to disburse deposits even when a tenant objects.


An investor, John Rollas, who engaged in business with a Florida real estate broker, Peter Voigt, appealed a Florida Real Estate Commission (“FREC”) ruling denying Rollas’ claim under the Florida Real Estate Recovery Fund, which is designed to protect victims of unscrupulous acts of persons licensed under Florida Statutes (FS) ch. 475. In Rollas v. Florida Dept. of Business of Regulation, 5D17-1526 (Feb. 2, 2018), the First District Court of Appeals reversed FREC’s decision and ruled in favor of the investor.

Rollas owned a number of single-family residential rental properties. Voigt sought financing from Rollas. Rollas invested money in Voigt’s real estate company, Priority One, and in return received an interest in Priority One and an agreement that Priority One would manage Rollas’ rental properties at a reduced fee. Over three years, Rollas loaned Priority One money, but Priority One failed to comply with prior agreements. Rollas later realized that Voigt and Priority One had misappropriated monies belonging to him, which the court deemed included the security deposits.

In January 2016, Rollas terminated the property management agreement (“PMA”), and in April 2016, he sued Voigt and Priority One for failure to repay the loans, conversion, breach of fiduciary duty and civil theft.  Rollas prevailed and received a final judgment in his favor in the amount of $206,185.38, as well as three-fold of actual damages on the civil theft claim.

At trial, the court made the following findings of fact:

“a. PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT, have breached the terms of a promissory note in the principal amount of $60,000, of which the sum of $37,500.00 remains due and owing[.]

“b. PRIORITY ONE MANAGEMENT GROUP, LLC, was a property management company owned and operated by PETER VOIGT, in his capacity as a licensed real estate broker.

“c. PETER VOIGT agreed with JOHN ROLLAS that PRIORITY ONE MANAGEMENT GROUP, LLC, would manage various real estate properties of JOHN ROLLAS and would collect and maintain security deposits, collect and disburse rental proceeds from tenants on JOHN ROLLAS’s properties, and pay third party vendors from the gross rental proceeds to make necessary repairs to the properties.

“d. PETER VOIGT collected the security deposits and rent from tenants occupying JOHN ROLLAS’s properties but then commingled the security deposits with funds of other managed properties and used the security deposits and rent from JOHN ROLLAS’s properties for payment of monthly operating costs of PRIORITY ONE MANAGEMENT GROUP, LLC, to pay other obligations of PRIORITY ONE MANAGEMENT GROUP, LLC, to pay invoices to third party vendors who performed services on properties not owned by JOHN ROLLAS, and to pay PETER VOIGT.

“e. PETER VOIGT’s actions are a breach of his obligations of loyalty and care to JOHN ROLLAS.

“f. PRIORITY ONE MANAGEMENT GROUP, LLC’s and PETER VOIGT’s actions have converted money owed to JOHN ROLLAS.

“g. PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT were negligent in the handling of the security deposits and rent proceeds for the properties being managed for JOHN ROLLAS, and in failing to pay the invoices of third party vendors who provided repair services to properties managed for JOHN ROLLAS.

“h. The security deposits held by PRIORITY ONE MANAGEMENT GROUP, LLC, for JOHN ROLLAS total $26,801.

“i. The third party vendors who provided services on the properties of JOHN ROLLAS but which were not paid from the gross rental proceeds collected by PRIORITY ONE MANAGEMENT GROUP, LLC, total $1,605.13.

“j. The net rent proceeds owed to JOHN ROLLAS total $133,932.69 as of February 1, 2016.

“k. The actions by PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT have been clearly and convincingly demonstrated as violating Section 812.014, Florida Statutes, by PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT knowingly obtaining or using the property of JOHN ROLLAS, to wit the security deposits and gross rental proceeds, with an intent to permanently deprive JOHN ROLLAS of the monies or benefits of the monies and PRIORITY ONE MANAGEMENT GROUP, LLC, and PETER VOIGT have appropriated the monies for the use of PETER VOIGT and PRIORITY ONE MANAGEMENT GROUP, LLC. JOHN ROLLAS provided Defendants with the statutory demand letter for Civil Theft under Section 772.11, Florida Statutes, and has satisfied the conditions precedent [to] filing a cause of action for civil relief under Chapters 772 and 812, Florida Statutes.”

Rollas then filed a FREC claim under the Recovery Fund seeking the maximum recovery amount of $50,000.00 under FS 475.482(1), which provides in relevant part:

1) The Florida Real Estate Recovery Fund shall be disbursed . . . as reimbursement to any person, partnership, or corporation adjudged by a court of competent civil jurisdiction in this state to have suffered monetary damages by reason of any act committed, as part of any real estate brokerage transaction involving real property in this state, by any broker or sales associate who

(a) Was, at the time the alleged act was committed, the holder of a current, valid, active real estate license issued under this part

(b) Was neither the seller, buyer, landlord, or tenant in the transaction nor an officer or director of a corporation, a member of a partnership, a member of a limited liability company, or a partner of a limited liability partnership which was the seller, buyer, landlord, or tenant in the transaction; and

(c) Was acting solely in the capacity of a real estate licensee in the transaction;

provided the act was a violation proscribed in section 475.25 or section 475.42.


FREC ruled against Rollas finding that Voigt was not acting solely in the capacity of a real estate licensee in his transactions with Rollas. FREC determined that Rollas entered into the PMA with Voigt as a means of payment on Rollas’ loans to Priority One. In contrast, Rollas argued that when Voigt mishandled the security deposits and rental income under the PMA, he was acting solely in his capacity as a real estate licensee. The Fifth District Court of Appeals agreed with Rollas, reasoning:

Rollas’s claim against the Recovery Fund was not based on losses he incurred as a result of his decision to invest and/or take an ownership interest in Priority One. Rather, his claim was based exclusively on the losses he incurred as a result of Voigt collecting (and subsequently converting) rents and tenant security deposits that came into Voigt’s possession pursuant to the property management agreement.

Remarkably, the appellate court noted that Voigt converted the “rental proceeds and security deposits that belonged to Rollas” (emphasis added). The court acknowledges that landlords have some type of interest in the security deposit (to pay for monies owed to them under the lease agreement and under FS ch. 83, pt. 2) and thus, when a manager misuses the deposit to the detriment of the landlord, the landlord may have a successful cause of action against the manager.

In the Rollas case, the property manager converted the security deposit to his own use. But what if the manager simply failed to use ordinary or professional care in making proper claims on the deposit or returned the deposit to the tenant without making proper claims? Or what if the manager did not make any claims on the deposit, knowing of legitimate claims, perhaps because the landlord terminated the PMA and the manager was acting in spite? Will the court consider those misuses of the deposit actionable against the manager?

Since the Rollas court acknowledged that landlords have an actionable claim against the manager for misappropriation of the security deposit, such negligent or intentional misuse of the security deposit could open the door for landlords to either sue or make a FREC claim against the manager for other types of misuse.


The Rollas ruling bolsters this author’s opinion that when a tenant objects to a security deposit claim within the 15 days prescribed by FS 83.49, the manager need not wait for a judicial determination before disbursing the deposit. Rather, the manager should have a practice and procedure of disbursing the deposit (a) in good faith, (b) considering the tenant’s objection and clear evidence, (c) using sound judgment, and (d) with sound legal counsel.

FS 83.49(2)(d) expressly states that its purpose is to resolve security deposit disputes without the need of litigation. It prescribes that the landlord must disclose to the tenant the following language when making a deposit claim,


Clearly, the Florida legislature favors informal resolution and not lawsuits. As explained further below, to require a broker to hold the deposit every time the tenant objects until one party sues the other in court defeats this expressed legislative intent and FS 83.49(3)(d).

Furthermore, FS 83.49 does not expressly prohibit a real estate broker from disbursing the security deposit if the tenant objects. (But note, there is a Florida case where the court ruled the landlord may not disburse the deposit before the tenant’s 15 day time period to object expires. Springer v. Dukes, 10 Fla. L. Weekly Supp. 928a [2003] [ruling that landlord must wait until the 15 day objection period expires before disbursing deposit].

FS 83.49(3) also states that both the tenant and landlord have a right to sue the other party in their respective interests: a tenant can sue for return of the deposit, and the landlord can sue for damages in excess of the deposit. That the broker makes a claim and disburses monies accordingly does not deprive the tenant from suing for return of the deposit; thus, if a tenant truly believes that the evidence supports his objection, he has the right to sue for return of the deposit, but he also exposes himself to being counter-sued by the landlord for damages that exceed the deposit claim.

That the legislature expressly reserves the parties’ right to sue the other for return of the deposit or for damages implies that the legislature anticipated or expected that the broker will disburse the deposit based on the evidence and in consideration of the tenant’s objection, and more certainly, they did not intend that the parties sue each other in each case where the tenant objects.

Furthermore, FS 83.49(3)(d) makes clear that the real estate broker’s duties in regards to the security deposit is totally contained within this statute and not any other rules or regulations to the contrary. It states,

Compliance with this section by an individual or business entity authorized to conduct business in this state, including Florida-licensed real estate brokers and sales associates, constitutes compliance with all other relevant Florida Statutes pertaining to security deposits held pursuant to a rental agreement or other landlord-tenant relationship. Enforcement personnel shall look solely to this section to determine compliance. This section prevails over any conflicting provisions in chapter 475 and in other sections of the Florida Statutes, and shall operate to permit licensed real estate brokers to disburse security deposits and deposit money without having to comply with the notice and settlement procedurescontained in s. 475.25(1)(d).

Notably, that the Florida legislature provided that brokers may “disburse” the money without having to comply with the procedures in FS 475.25. The import of this provision is even more revealing when looking at FS 475.25(1)(d), because it reveals that the legislature intended that the brokers disburse the deposit without having to wait for a court adjudication. FS 475.25(1)(d) states in relevant part:

if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon the licensee for the escrowed property, which property she or he still maintains in her or his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:

a. Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;

b. With the consent of all parties, submit the matter to arbitration;

c. By interpleader or otherwise, seek adjudication of the matter by a court; or

d. With the written consent of all parties, submit the matter to mediation.

(emphasis added).

Without FS 83.49(3)(d), if a broker receives a conflicting demand on the deposit, he would be required to (a) file a request with FREC to issue a disbursement order, (b) submit the matter to arbitration, (c) seek adjudication in court, or (d) seek mediation. In other words, the broker would be unable to disburse the deposit until adjudication is rendered by FREC, a court, or an arbitrator or until an agreement in reached through mediation.

But with FS 83.49(3)(d), the legislature eliminated those requirements of adjudication and permitted brokers to make a claim, wait for the tenant to object, and disburse the deposit presumably in the broker’s sound judgment, which would be based on the evidence, sound legal advice, and in consideration of the tenant’s objection.

If the opposite were true, that is, if the broker were required to wait for judicial adjudication, FS 83.49(3)(d) would be meaningless and obligate the broker to effectively comply with FS 475.25(1)(d) for each and every deposit claim objection. Of course, requiring the broker to wait for judicial adjudication for every objection would only encourage and embolden tenants to abuse the rule by objecting to every deposit claim.

What further supports the position that the broker may disburse the deposit without judicial adjudication is that the results of holding the deposit and waiting for a party to sue the other party has the same effect as disbursing the monies: namely, it deprives the tenant of the deposit and forces a party to sue the other party.

If the tenant sues for return of the deposit, or alternatively, the landlord sues for a determination of disbursement, and the tenant prevails in the lawsuit, the broker or landlord may be deemed the losing party and will be ordered to return the deposit. In effect, it matters not that the deposit is being held in escrow or has already been disbursed. If the claim is wrong, it matters not whether the broker held or disbursed the deposit. Wrong is wrong.

Since it makes no difference whether the broker holds the deposit or disburses the deposit, until the statute is amended or until higher courts clarify the issue, the better choice is to follow more closely the purpose and intent of FS 83.49, and accordingly disburse the deposit.


Real estate licensees who manage rental property for a landlord have a fiduciary obligation to the landlord to treat the security deposit properly. This means, where a proper claim must be made to pay for damages caused to the landlord’s property, the manager should make that claim. Otherwise, the landlord may have a successful action against the manager for breach of that duty.

On the flip side of that duty is the manager’s duty to properly claim and disburse the deposit to avoid a successful claim by the tenant. Where no claim should be made, the manager should not make it. The manager must collect and maintain all necessary evidence to support each claim and be able to justify the claim or lack therefore to the landlord and tenant.

As for disbursement of the deposit, there seems to be confusion among real estate brokers. For reasons stated in this article, the manager should consider a practice and procedure of disbursing deposit claims based on the manager’s sound discretion in consideration of the evidence and tenant’s objection. Of course, to make a sound determination, the broker should work with a landlord-tenant attorney to help him resolve deposit disputes from a sound, legal perspective.