Property Management

A Vermont property manager who accepts a rent payment from a tenant and fails to forward it to the property owner within a reasonable time is:

AActing within normal cash flow management practices
BPotentially converting client funds — a serious violation of fiduciary duty and possibly criminal law✓ Correct
CEntitled to hold funds during a dispute
DActing reasonably if they inform the owner

Explanation

Failing to forward collected rents to the property owner is a breach of fiduciary duty and may constitute conversion (unlawful taking) of client funds. Vermont license law requires prompt accounting and disbursement of client funds. This can result in license revocation and criminal prosecution.

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