12-19-22 - As seen in the Rochester Business Journal. Apartment complex owner suing firm hired to manage property - lawsuit filed by Andrew Ryan and Rachel Pawlak of Woods Oviatt Gilman LLP.
Apartment complex owner suing firm hired to manage property
By: Kevin Oklobzija December 19, 2022
The owner of a South Wedge neighborhood apartment complex is suing a third-party property management firm, claiming misappropriation of funds.
S&P Developers, Inc. alleges in a complaint filed Dec. 9 in state Supreme Court in Monroe County that Rochester-based Realty Performance Advisors, Inc., and a representative of that company withdrew nearly $120,000 from the property account without authorization.
The property owner is seeking damages of $119,541.17.
The complaint says Realty Performance Advisors was hired to collect rent and perform property maintenance at South Wedge Commons, an apartment community located at 90 Manor Parkway, just off South Avenue in the city of Rochester.
Any property improvement expenditure over $1,000 required prior written approval from the property owner, the complaint states.
S&P Developers alleges that just shy of $34,000 was improperly withheld for unauthorized laundry room improvement project, $80,000 was withdrawn from the property account for management fees on a capital improvement project, and $5,860.37 was withdrawn to allegedly pay a consulting fee for an insurance claim.
“Upon information and belief, RPA had not managed the construction projects or performed the capital improvements that it claimed, and in fact, there were no construction projects or capital improvements made to the property as claimed by RPA,” according to court papers.
S&P Developers claims Jason Brescia, the Realty Performance Advisors representative hired as property manager, directed funds from the property account to an unauthorized Capital One credit card account he opened in the S&P Developers name.
“Mr. Brescia, as agent of RPA, usurped and converted for his use and benefit, the monies in S&P’s account by opening the Capital One account in S&P’s name and using the monies from S&P’s operating account to purchase items for his own personal use and enjoyment unrelated to the business of S&P,” the complaint says.
The one-year management contract took effect on Oct. 5, 2020, and automatically renewed the following October. S&P Developers terminated the contract on April 30 of this year, the complaint says.
“S&P justifiably relied upon the representations made by RPA, and paid management fees to RPA in reliance on the factual representations made by RPA regarding the construction projects and capital improvements,” according to the lawsuit filed by Andrew Ryan and Rachel Pawlak of Woods Oviatt Gilman LLP.
