A California property manager who collects rent and doesn't remit it is potentially committing both a civil and criminal offense. The window for asset recovery narrows quickly. The first 10 days are when the documentation that determines the outcome gets created.
Contact your tenants directly — without disclosing the dispute — to confirm when they paid rent, in what amount, and to whom. Get the confirmation in writing. Tenants often have the most reliable records of what was paid.
Then send a written demand to your property manager by USPS certified mail. Request a full accounting of all rent collected on the property, dates of collection, expenses deducted, and amounts remitted, with a five-business-day deadline. Send a copy to the broker of record named on the PMA.
California Business & Professions Code §10145 requires brokers (including those acting as property managers) to deposit trust funds into a trust account within three business days and to maintain them separate from operating funds. Commingling and misappropriation are among the most serious DRE matters.
File a complaint at dre.ca.gov. Provide:
The DRE can suspend or revoke the broker's license, which is often more material to the firm than any civil action you could bring on your own. The complaint process triggers an investigation that can move faster than civil court.
Retain a California real estate attorney. For amounts under the small claims jurisdictional limit (verify the current limit at selfhelp.courts.ca.gov), small claims may handle it. For larger amounts, superior court is the venue. The attorney's demand letter often produces faster resolution than acting alone.
If the facts support criminal charges (clear evidence of intentional misappropriation), the district attorney can be contacted. Trust fund theft can be charged as embezzlement or grand theft depending on the amounts and circumstances. Criminal referral typically follows the DRE complaint, not the other way around.
Once the demand letter is sent and the DRE complaint is filed, the relationship is over regardless of how the firm responds. Switch managers immediately. Don't continue letting collections route through a firm that's actively under investigation. NGC can take over with a same-day termination notice to the prior firm and a parallel records-recovery effort coordinated with your DRE complaint.
Trust fund recovery is time-sensitive. Send us your documentation and we'll tell you the right order: demand letter, DRE complaint, criminal referral, attorney retention, and the parallel switch.
Schedule the call → Or generate the termination letterFree service for owners switching to NGC. We draft, send via certified mail, and handle the entire 30-day transition. You sign one form.
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