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Property firm draws fine

June 11, 1998|By LISA GRAYBEAL

A Hagerstown property management company and its owner have been fined $10,000 by the Maryland attorney general's office on charges of violating the state's security deposit law, the agency reported Tuesday.

Charged were Potomac Property Management Co., which manages dozens of residential properties, and listed owner Kelly L. Moler, according to a report released by the agency.

Leasing agent Mark Moler said that the "violations have already been rectified."

He said he and his wife, Kelly Moler, are listed as owners because their names are on the leases for other individual owners of properties the Molers manage.

The report alleged that Kelly Moler and the agency failed to place their tenants' security deposits into a separate interest-bearing account, the report said.

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According to the charges, Potomac's security deposit account funds were being used for operating purposes and the fund did not contain enough money to cover the security deposits it had collected, the report alleged.

Investigators of the agency's Consumer Protection Division also learned that the amount in the fund was only a small fraction of the amount that would be needed to reimburse the tenants if all deposits had become due, the report said.

"A tenant's security deposit is to be protected, not used as a quick loan whenever a company needs extra cash," Attorney General J. Joseph Curran Jr. said in a prepared statement.

Maryland's law is clearly written to ensure that tenants have access to their deposits whenever their leases expire, Curran said.

None of Potomac Property Management Co.'s tenants lost deposits, said Frank Mann, special assistant to the attorney general.

The settlement between the Consumer Protection Division and Potomac requires Kelly Moler and the company to pay a civil penalty of $10,000 and to reimburse the Consumer Protection Division for the cost of its investigation, the report said.

The property management company and Kelly Moler also must deposit funds into the security deposit account in an amount sufficient to cover the security deposits of all of its current tenants together with interest, the report said.

Potomac and Kelly Moler also are required to maintain an adequately funded security deposit account to ensure that tenants occupying properties managed by Potomac will receive appropriate refunds of their security deposits upon the termination of their leases, the report said.

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