E-Fighting Fraud: With Fewer Auditors, Arizona Dept. Of Real Estate Is Tracking Firms with Technology

Summary

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If necessity is the mother of invention, a slumping economy fathered a state agency's need to implement electronic audits of property management companies amid growing concerns of fraud.

Hampered by budget cuts that led to sharp staff reductions, the Arizona Department of Real Estate is using technology in its crackdown on misuse by property managers of trust accounts that hold tenants' security deposits.

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Extract

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E-Fighting Fraud: With Fewer Auditors, Arizona Dept. Of Real Estate Is Tracking Firms with Technology

The economic downturn, which has devastated the real estate industry, is considered a factor in the growing incidence of property management fraud. Real estate brokers, scrambling for business, have added property management to their portfolio. And mistakes are made because some of them may not be fully aware of the rules and regulations that govern property management.

Some property management companies, feeling a financial squeeze from time to time, pull money out of the trust account to tide them over.

But in some case...

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