Listen closely at 1:48:54 when Robyn asks Bob "What is an Operating Escrow?"Bob replied that he didn't know exactly what an Operating Escrow was, except that it was really his money and "my CPA said it was legal".She gave Bob a chance by then asking "is your CPA a real estate agent?"
Monday, October 26, 2009
Defendant admitted that the advance deposits that Plaintiff kept on all sixteen units, and not just on the ten units Defendant said he had accepted, went toward the purchase price. Some people had paid advance deposits on the six units that Defendant claims he did not accept and Defendant admitted those people never received a refund.
Friday, July 24, 2009
Thursday, July 9, 2009
The problem: UNlicensed rental companies stealing peoples' money because it's a cakewalk.
Come on back!We've cleaned up our act!Don'tcha know we've made it so'syou won't get ripped or gyped or hosed.Forgive us for our slip ~We didn't mean to let 'em dip ~It seemed OK back then, you seebut now we've stopped that big parteeeeee!
Thursday, June 25, 2009
They've been CAUGHT! Click HERE to read Jamie Satterfield's story in the Knoxville News Sentinel!
Sunday, June 21, 2009
Wednesday, May 20, 2009
It's always fun to play developer/investor until someone gets screwed. WATE.com, based out of Knoxville, featured just such a story on the evening news, Wednesday.
Wednesday, April 29, 2009
Why is the Great State of Tennessee working against visitors and vacation property owners?
Sunday, April 19, 2009
I read a comment from a cabin owner on a local website, where she said they are 4-5 months in the rear from their rental management company for the rents collected. Why would anyone tolerate this! Would you let a guest rent your vacation rental and pay you for their rental six months after their stay?My guess that this situation is the result of the management company dipping into money which wasn't theirs, meaning the owner's portion of the rental receipts. They were probably in a tight place, and used the funds to cover operating expenses, figuring they could make it up when cash was flowing in the right direction again. I recently heard about another management company which wanted to sell, but they had dipped so deeply into the advance deposits, that they could not sell for the price they wanted and needed.Maybe you shouldn't keep two sets of books, but you should have two checking accounts. #1 is your Operating Account which is your money to play with. #2 could be called an Escrow or Trust Account, where you hold deposits, taxes collected, housekeeping fees and cabin rental receipts. The second account is where you hold money "In Trust" to distribute it as required. All money you receive from guests goes into your Trust Account.It is very important that you wrap your head around this: It is not your money! This money is actually someone else's not yours. This money belongs to the guest, until they check in; the owner of the property you are managing; the housekeeper who cleans the property; and the taxing authorities, not you. When a guest checks in, you can remove your portion of the rental as commission and deposit it into your Operating Account. I do this once a week, usually on Thursday, when I cut checks for the week. Some states require you have a separate Escrow or Trust Account, but many, including where I live, do not.When it is time for you to cut Owner's checks, pay sales tax receipts, pay your housekeepers, or maintenance items, it all comes out of your Trust Account. The money will always be there, in sufficient amounts to pay whatever funds are due. When the money is due to be paid out, its there because you have not become confused about whose money is whose.When a property owner places trust in you to manage, market and oversee their property, do you give them reason to trust you with their money too? It's something you should think about.
Thursday, March 19, 2009
If Vacation Lodging Service (VLS) licensees and real estate brokers are under the same supervisory commission, and if one reason for this is because both types of businesses (overnight rental company and a real estate office) are holding, in trust, as fiduciaries, other peoples' money ~ then why should ONE of these two not be afraid of the big bad wolf (Tennessee Real Estate Commission, or also fearfully known as TREC)?
- if there are ONE million dollars sitting in real estate brokers' escrows, right now, on behalf of people from all over America anticipating the closing of their real estate purchase in Tennessee,
- there should be TEN million (or way more) sitting in escrow with the Vacation Lodging Service licensees.
- guest advanced deposits,
- money due to owners for checked-out rentals,
- money due to the pest control guy and the rental company as commissions earned,
- money collected from the guests and owed to the tax authorities.
Wednesday, March 18, 2009
Monday, March 16, 2009
Calling All Criminals: Come on up, down, or over to Tennessee! Are you currently running a Rob Peter To Pay Paul operation? Hey, that's no problem, here.We've got the 'blurb'. The 'paragraph'. The 'notice to the public in a timely manner'. The "Dear Guest ~ In accordance with TCA-62-13-104(D)(i), your monies are going into my operating account, blahblahblah..."
Saturday, March 14, 2009
Don didn't realize it, but in July 1999 he sold his company to a financial rapist. The Financial Rapist ran wild with the company's escrow money until around March 2001. Finally, enough of the owners were missing enough money and were collectively not feelin' the love e-nough that ~ they complained.
However, as justice was taking it's sweet time - some how - some OTHER people were running the show at Great Smoky Mountain Vacation Rentals. We would have to check with the owners on that program at that time to know if the OTHER people were doing a good job with their fiduciary duties as a property manager. It's almost moot, however, because the OTHER people sold it to some MORE people. The name of the 'some MORE people' is Roy Duane Wilhite.
- fanfarelessly closed his doors on October 1, 2008;
- owed his owners back rent money;
- was seemingly unconcerned for the guests who had paid deposits, much less the guests who were were completely paid up in advance;
- filed Chapter 7 Bankruptcy in November 2008.
Friday, March 13, 2009
But how could the Owner, a kind, gentle human ~ hardworking, ethical, and smart ~ have known what would happen to the new endeavor, along with everything else this Ethical Person had acquired in their lifetime of physical toil?
However, when the rubber met the road and the company closed it's doors, it was a simple matter to write checks out of escrow for
- the balances due to owners,
- amounts due to taxes,
- and one check to the company taking the units with the respective advance bookings including the corresponding advance deposits.
Props to Company A. Props to the Owner and the meticulous bookkeeper behind the smooth closing-out of Company A's books.
Wednesday, March 11, 2009
One company shall remain anonymous out of respect for their conduct and aplomb; the other shall be blasted all over these pages as more exposure to their dastardly deeds. Yes, they will be named ~ but as you're reading, please think about the many other companies that YOU know are behaving the same way.
They just haven't been exposed.
Sunday, March 8, 2009
Saturday, February 28, 2009
Sunday, February 22, 2009
This was added to TCA 62-13-104-3 in May 2003. The sponsors were Clabough and Miller. Phil Bredesen signed it in to law in June 2003 (click here to see the original Act as a .pdf):
Friday, February 13, 2009
And, yeah, (sucking teeth). You need that juicy money, but there's a pesky law standing in your way. Tennessee Code Annotated, Title 47, Chapter 18 and Title 62, Chapter 13, Section 62-13-104(b)(3), Subdivision (D) ~ Prior to May 2003.
Thursday, February 12, 2009
Are you with me? Big rental company with lots of money they are holding as deposits on future reservations?
Now, let's say the rules in Tennessee state that you, the professional vacation rental management company, are not supposed to touch this money until the guest departs.
But you need money! OMG, it's soooooo tempting! All that money sitting there in an account ~ just drawing interest.
You could pay your payroll with it ~ or back taxes ~ or, or, just about anything you might need money for to help you operate your business. Hell, if you could pay your office's electric bill with it, why not go a step further and use it to buy a new dining room set for your own personal rental cabin?
What to do? What to do? What to do? What to do? What to do?
Ergo: Hammer and a Feather.
My kids will tell you that i raised them with a "hammer and a feather". I came down hard, when called for ~ yet, i was the first to praise and condone when they earned it. In the business world, i heard it called "a velvet brick".
...how 'bout a velvet wrapped hammer. This blog is for what's making me insane.