McElwee, Bill

Respondent(s): Bill McElwee, Principal Broker, Betty Krenz and Associates, Little Rock, Arkansas, Bill McElwee, Principal Broker, Guardian Realty, LLC, Little Rock, Arkansas, Formal Hearing #3561

Violation(s): Arkansas Code Annotated §17-42-311(a)(2), §17-42-311(a)(6), §17-42-311(a)(11) and Commission Regulations 8.5(a),10.4(d)(1), 10.7(b)(3), 10.8(c), 10.9(a), 10.9(b), 10.10(a), 10.19(a), 10.21(a), and 10.22(g).

Sanction(s): The Commission voted that Respondent McElwee pay a $2,500.00 fine within thirty (30) days of notice of this matter or his license will be suspended immediately until that fine is paid.  Additionally, Respondent McElwee will have 120 days to enroll in a property management course, or as soon as a property management course is offered.  Additionally, following a recovery fund hearing determined in the future, Respondent McElwee will be required to make complete restitution as an outcome of that hearing.  Respondent McElwee will then have thirty (30) days to pay the restitution or his license will be suspended if he does not comply with that restitution.

Complainant Bill Lusk

Respondent McElwee, as Principal Broker of Betty Krenz and Associates, managed multiple commercial properties for Complainant Property Owner Lusk. During November 2013, Complainant Lusk received two checks written on the Betty Krenz & Associates Rent Escrow Account for rental monies that were returned for "non-sufficient funds". 

After receiving the non-sufficient funds checks issued from Betty Krenz & Associates Rent Escrow Account, Complainant Lusk verbally notified Respondent McElwee that he was terminating all property management contracts with Betty Krenz & Associates. Complainant Property Owner Lusk instructed Respondent McElwee not to deposit any future rental funds received on Complainant Lusk’s properties.

Respondent McElwee paid to Complainant Lusk the delinquency in rental funds caused by the checks returned for non-sufficient funds. Contrary to Complainant Lusk’s instructions, Respondent McElwee continued to deposit rental funds he received for Complainant Lusk’s properties. Respondent McElwee applied some of the collected rental funds to the cancellation fees Respondent McElwee claimed Complainant Lusk owed Betty Krenz & Associates.

On or about November 16, 2013, Complainant Lusk transferred to Mike Berg Co. Management, the management of multiple commercial properties that were at that time under Property Management Agreements with Respondent McElwee as Principal Broker of Betty Krenz & Associates. 

On January 29, 2014, check # 1999 in the amount of $3,248, payable to Complainant Lusk, written on the Betty Krenz & Associates Rent Escrow account cleared the escrow account located at Metropolitan Bank.  Documentation was not located in Respondent McElwee’s records to demonstrate what the payment was for.

On or about March 19, 2014, Complainant Lusk sent a letter to Respondent McElwee which stated it had been four months since the termination of his property management agreement and he had not received his final accounting or copies of his lease agreements.  Complainant Lusk requested he be paid the balance of security deposits held by Betty Krenz & Associates, December 2013 rent which was deposited in conflict with his instructions, and the prepaid rent balance that was being held by Betty Krenz & Associates for one of his Tenants.  No further disbursements were made from Betty Krenz & Associates to Complainant Lusk after receipt of the March 19, 2014 letter.

Lusk Properties

Barton Square and Riverwest Properties

On March 3, 2009, Complainant Property Owner Lusk entered into a Property Management Agreement with Betty Krenz & Associates for the properties known as Barton Square and Riverwest.  The agreement was for the period from March 3, 2009 until March 3, 2010, with automatic successive period renewals.  The management fee was six percent (6%).  The Agreement listed a cancellation fee equal to two (2) months management fee.  

Barton Square Properties – Rental Funds

On or about November 12, 2013, Check # 21921 in the amount of $8,329.14 issued to Complainant Lusk from Betty Krenz & Associates for Barton Square property’s October 2013 rents was returned "non-sufficient funds." Respondent McElwee  issued Check # 21966 dated November 19, 2013, in the amount of $8,329.14 to pay the delinquency caused by the previously returned check for that same amount. 

On or about December 3, 2013, Tenant The Catch (Harold Grave) paid rent with cash in the amount of $2,333 for a Barton Square property. Receipt # 8058 was issued to Tenant The Catch.  The cash was deposited to Betty Krenz & Associates Rent Escrow Account on or about December 3, 2013.  Respondent McElwee did not disburse to Complainant Property Owner Lusk the rental funds Respondent collected from Tenant The Catch.

On or about December 13, 2013, Tenant Creations Unlimited – Another Level (Fred Martin) paid rent in the amount of $1,250 for a Barton Square property with Money Order # 211346548 in the amount of $600 and Money Order # 214091755 in the amount of $650.  The money orders were deposited to Betty Krenz & Associates Rent Escrow Account on or about December 13, 2013.  Respondent McElwee did not disburse to Complainant Property Owner Lusk the rent collected from Tenant Creations Unlimited – Another Level (Fred Martin).

Betty Krenz & Associates’ tenant ledger for Tenant Creations Unlimited – Another Level (Fred Martin) reflected that Tenant Creations Unlimited had made double rent payments each month beginning January 1, 2013, which resulted in a prepaid rent balance at the end of November 2013 in the amount of $2,795.  Respondent McElwee did not disburse to Complainant Property Owner Lusk the prepaid rent balance paid by Tenant Creations Unlimited nor did he reimburse Tenant Creations Unlimited for the double payments. 

Barton Square Properties - Security Deposits

Tenant Lockhart Service Company entered into a Lease Agreement for the Barton Square property located at 8707 Kanis Road, Suite 4, Little Rock, Arkansas, for the period from April 1, 2012 through March 31, 2017.  A Security Deposit of $725 was noted as held in agents "Escrow Account."  Tenant Lockhart paid the first month’s rent of $725 and Security Deposit of $725 by check #13431 dated March 26, 2012.  The check was deposited to the Betty Krenz & Associates Rent Escrow Account. Subsequently, $725 of those funds was transferred to the Security Deposit Trust Account of Betty Krenz & Associates. Respondent McElwee did not provide any trust account record to indicate that the $725 Security Deposit was disbursed to Complainant Lusk, Tenant Lockhart, Mike Berg Co. Management or otherwise. 

Tenant Smokey’s Tobacco, Proprietor # 1 Essa Mustafa, entered into a Lease Agreement for the Barton Square property located at 1403 John Barrow Road, Little Rock, Arkansas, to expire on March 31, 2014.  On March 6, 2013, Proprietor Essa Mustfa provided cash in the amount of $1,600 for the Security Deposit and receipt # 006339 was issued to Tenant Mustafa.  On or about March 6, 2013, the Security Deposit was deposited to the Betty Krenz & Associates Security Deposit Account. 

On or about May 14, 2013, Proprietor # 2 Khattoum replaced Proprietor # 1 Essa Mustafa for Tenant Smokey’s Tobacco and signed a new Lease Agreement with Betty Krenz & Associates for 1403 John Barrow Road to expire on May 31, 2014.   A Security Deposit in the amount of $1,600 was listed on the lease agreement.  A handwritten note at the top of the lease agreement stated "Transferred $1,600 Security Deposit from Essa.", Proprietor #1.   

On or about October 23, 2013, Proprietor # 3, Abdelgani, replaced Proprietor # 2, Khattoum, for Tenant Smokey’s Tobacco and signed a Lease Agreement for the 1403 John Barrow Road to expire on October 31, 2018.  Respondent McElwee did not provide any trust account record to indicate that the Security Deposit held by Betty Krenz & Associates in the amount of $1,600 was disbursed to Complainant Property Owner Lusk, Tenant Smokey’s Tobacco, 

Mike Berg Co. Management or otherwise. 

On or about November 1, 2013, Tenant The Catch (Harold Grave), entered into a Lease Agreement for the Barton Square property located at 1407 John Barrow Road, Little Rock, Arkansas, to expire on October 31, 2014.  A Security Deposit in the amount of $2,333 was listed on the lease agreement.  On or about November 1, 2013, Tenant The Catch paid $2,333 cash for the Security Deposit.  The Security Deposit paid by Tenant The Catch in the amount of $2,333 was deposited to Betty Krenz & Associates Security Deposit account on or about November 4, 2013. Respondent McElwee did not provide any trust account record to indicate that the Security Deposit held by Betty Krenz & Associates in the amount of $2,333 was disbursed to Complainant Lusk, Tenant The Catch, Mike Berg Co. Management or otherwise. 

Riverwest Properties - Rental Funds

On or about November 12, 2013, Check # 21922 in the amount of $6,376.38 issued to Complainant Property Owner Lusk from Betty Krenz & Associates for Riverwest October 2013 rents was returned "non-sufficient funds." Respondent McElwee issued Check # 21967 dated November 19, 2013, in the amount of $6,376.38, to pay the delinquency caused by the previously returned check for that same amount. 

Rushing Circle Properties – Rental Funds

On or about January 1, 2013, Complainant Lusk, entered into a verbal agreement with Betty Krenz & Associates to manage the property known as Rushing Circle. 

On or about December 6, 2013, Tenant Kim-Lor provided Check # 5266 in the amount of $845 for a Rushing Circle property for December rent and water charges.  The check was deposited to the Betty Krenz & Associates Security Deposit Account in error and later transferred to the Rent Escrow account. Respondent McElwee did not disburse to Complainant Lusk the rent collected from Tenant Kim-Lor.

Complainant Hannah Owenga  

On or about January 10, 2014, Tenant Spencer Lofton paid an $850 security deposit to Property Manager Betty Krenz & Associates to rent property at 2318 Cherry Creek Circle, Bryant, Arkansas. On or about January 28, 2014, Complainant Tenant Owenga provided Money Order # 2100970004 in the amount of $935 for January 2014 pro-rated rent plus February rent for the subject property.  

Respondent McElwee did not provide AREC Investigators a copy of Complainant Tenant Owenga and Tenant Spencer Lofton’s lease agreement with Betty Krenz & Associates. Respondent McElwee did not provide accounting records for Tenant Complainant Owenga. A move-in check list was found in the file which reflected a move in date of January 28, 2014.

As a result of an employment transfer Respondent Principal Broker McElwee agreed to refund Complainant Tenant Owenga and Tenant Spencer Lofton’s Security Deposit on or about September 13, 2014, prior to the expiration of the lease agreement.  

On or about October 10, 2014, Complainant Tenant Owenga received check # 1124 on the account of Betty Krenz & Associates Security Deposit Trust Account in the amount of $700 for the Security Deposit Refund. The check had Respondent McElwee’s signature. Deductions were made for $50 Administration Fee, $50 Blind Repair and $50 Truck/Hauling. 

On October 30, 2014, Complainant Tenant Owenga deposited the $700 security deposit refund check issued from Betty Krenz & Associates to her bank account.  On November 4, 2014, the check issued to Complainant Tenant Owenga for the Security Deposit refund was returned as "non-sufficient funds."  Tenant Owenga was charged an overdraft fee of $36 and a return item fee of $15 by her bank.

Complainant Shawn Shannon

On May 26, 2010, Complainant Property Owner Shannon entered into a Property Management Agreement with Betty Krenz & Associates for the property located at 7116 Shamrock, Little Rock, Arkansas.

On September 7, 2010, Tenants Townsend signed a Residential Lease Agreement for the property located at 7116 Shamrock, Little Rock, Arkansas, for the period from September 7, 2010 through August 31, 2011.  Tenants Townsend paid a Security Deposit in the amount of $1,500 and the monthly rent amount was $1,500.  Complainant Shannon emailed her approval for the lease with Tenants Townsend.

On or about August 22, 2014, Respondent McElwee signed check # 5068 in the amount of $508 for August 2014, rent distribution to Complainant Property Owner Shannon. The bank reconciliation for Betty Krenz & Associates Rent Escrow Account dated August 31, 2014, listed check # 5068 as outstanding.  Subsequent bank statements for the Betty Krenz & Associates Rent Escrow Account did not reflect check # 5068 as clearing the bank account.  On February 1, 2016, AREC received a copy of check # 5068 which Complainant Property Owner Shannon stated she had misplaced and never deposited to her bank account. Betty Krenz & Associates Rent Escrow Account did not reflect check # 5068 cleared the bank through October 31, 2014, and was not re-issued by Respondent McElwee.

Upon receiving a letter from Executive Broker Krenz in September 2014, pertaining to the closure of her business, Betty Krenz & Associates on October 31, 2014, Complainant Property Owner Shannon responded with a written request to terminate her Property Management Agreement effective October 31, 2014, and requested all documents and security deposit funds be forwarded to her new property manager.

On or about October 29, 2014, Respondent McElwee provided Complainant Shannon with a final accounting of funds and issued check # 5159 in the amount of $2,296.02.  On November 25, 2014, Complainant Shannon received email notification from her bank that the check issued from Betty Krenz & Associates rent escrow account in the amount of $2,296.02 was returned due to insufficient funds. Respondent McElwee never reissued payment to Complainant Shannon for the insufficient funds. Respondent McElwee did not provide any trust account record to indicate that the Security Deposit held by Betty Krenz & Associates in the amount of $1,500 was disbursed to Complainant Shannon, Tenants Townsend Complainant Shannon’s new property manager, or otherwise.

Complainant Eugene Aist

Complainant Property Owner Aist entered into a Property Management Agreement dated April 26, 2007, with Betty Krenz & Associates for the property located at 8 West Windsor, Little Rock, Arkansas.  

On or about September 4, 2007, Tenants Shabazz identified as "Resident" entered into a Residential Lease/Rental Agreement for the property located at 8 Windsor, Little Rock, Arkansas, for the period from September 1, 2007 through September 1, 2008.  The Agreement included a $350 Security Deposit and monthly rent of $650. The lease agreement stated "Management acknowledges receipt from Resident in the amount of $350 as Security Deposit…"

On or about May 21, 2013, Property Manager Debbie Hagan of Betty Krenz & Associates provided written notice to Tenants Shabazz for a rent increase to $850 per month effective July 1, 2013.  The notice stated if Tenants Shabazz did not execute a new lease agreement they should vacate the property by July 1, 2013.  

Tenants Shabazz paid June 2013 rent in the amount of $650. On or about June 12, 2013, Betty Krenz & Associates sent an invoice to Tenants Shabazz in the amount of $115 for the cost invoiced by Krenz Maintenance to repair a broken window caused by Tenants children.  Tenants Shabazz did not pay the invoice.  The amount was deducted from Complainant Aist’s rent proceeds for June 2013. Tenants Shabazz vacated the property on or about July 1, 2013. Respondent McElwee did not provide any trust account record to indicate that the Security Deposit held by Betty Krenz & Associates in the amount of $350 was disbursed to Complainant Aist, Tenant Shabazz, or otherwise.

On October 10, 2013, Complainant Aist received invoice # 517 for an advance payment of $1,200 from "Krenz Maintenance" for "partial draw for materials and parole."   Complainant Aist issued check # 1385 in the amount of $1,200 to Betty Krenz Maintenance.  The check was deposited to the Betty Krenz & Associates Rent Escrow Account on October 16, 2013.  Respondent McElwee did not provide monthly accounting for October through December 2013, to Complainant Aist and failed to provide Complainant Aist an accounting for the $1,200 payment.

From March 17 2014 until April 22, 2014, Respondent McElwee billed Complainant Aist $1,380.36 for repairs and maintenance performed by Krenz Maintenance.  Complainant Aist discovered that the repairs he had been billed for and paid were not completed as Respondent McElwee had indicated.

Respondent McElwee did not provide monthly accounting statements to Complainant Aist for the months of February and March 2014.

On or about April 12, 2014, Tenants Price and Howard signed a Residential Lease/Rental Agreement for the property 8 W. Windsor for the period from April 8, 2014 through April 7, 2015, for a monthly rent of $850.  The lease agreement included a security deposit of $850 and monthly rent of $850. The lease agreement stated "Management, on behalf of Owner, acknowledges receipt from Tenant the amount of $850 as Security Deposit."  Prior to the date of the lease agreement, on April 2, 2014, Respondent McElwee had deposited to Betty Krenz & Associates Security Deposit Trust Account $850 CASH from Tenant Virginia Howard for the Security Deposit.  Respondent McElwee did not maintain a copy of a numbered receipt for the cash funds received from Tenants Price and Howard.  Tenants Price and Howard paid for pro-rated rent in the amount of $495 which was deposited to Betty Krenz & Associates Rent Escrow Account.  Respondent McElwee did not provide a monthly accounting to Complainant Aist for April 2014.

May 1, 2014, Tenants Price and Howard failed to pay May 2014 rent.  

Respondent McElwee did not provide a monthly accounting to Complainant Aist for the month of May 2014.

On or about June 9, 2014, Complainant Aist sent an email to Respondent McElwee requesting a monthly accounting of 8 W. Windsor claiming he had not received an accounting since Respondent McElwee became Principal Broker. On or about June 17, 2014, Respondent McElwee sent an accounting of monthly activity to Complainant Property Owner Aist for the period from March 2014 through June 17, 2014.  Respondent McElwee applied the $850 security deposit paid by Tenants Price and Howard to June 2014 rent.  The statement reflected a balance due from Complainant Property Owner Aist in the amount of $35.36.

July 22, 2014, Attorney Rick Sellars provided an unlawful detainer letter to Tenants Price and Howard for failure to vacate the property at 8 W. Windsor.  Complainant Aist expended $780 to take back possession of his property.

Complainant Vicki Smith

On April 17, 2008, Complainant Property Owner Smith entered into a Property Management Agreement with Respondent McElwee, Principal Broker, Progressive Realty and Management, for the property located at 5107 Natalie, Alexander, Arkansas. A cancellation fee of $200 was noted in the Agreement. Other provisions stated "all late fees belong to the agent."  The management fee was ten percent (10%) of gross rent collected.

On October 7, 2008, Complainant Property Owner Smith entered into a Property Management Agreement with Respondent McElwee, Principal Broker, Progressive Realty and Management for the property located at 5 White Cloud, Greenbrier, Arkansas.  A cancellation fee of $250 was noted in the Agreement.  Other provisions stated "a Leasing/set-up Fee of $100 applys (sic)."  Late fees were not referenced in the agreement.  The Management fee was seven percent (7%) of gross rent collected.

On March 29, 2012, Respondent McElwee sold his business Progressive Realty and Management and transferred all contracts and agreements to Betty Krenz & Associates.  Respondent McElwee allowed his Broker license to expire on January 1, 2013.

Prior to Respondent McElwee becoming Principal Broker for Betty Krenz & Associates, prior Tenants Traxler leased the property located at 5107 Natalie, Alexander, Arkansas for the period from April 1, 2012 through June 1, 2013.  A Security Deposit of $950 was recorded as received on April 3, 2012, from Tenants Traxler.  

On November 22, 2013, after Respondent McElwee became Principal Broker for Betty Krenz & Associates, check # 1048 was issued from Betty Krenz & Associates security deposit trust account and deposited to the Betty Krenz & Associates rent escrow account in the amount of $950.  The deposit description noted "5107 Natalie/Traxler – Transfer Security Deposit."  On or about November 22, 2013, check # 1929 in the amount of $413.40 was issued to Tenants Traxler.  The memo on the check stated "Security Deposit Refund."  Respondent McElwee did not provide any trust account record to indicate that the balance of the Security Deposit held by Betty Krenz & Associates in the amount of $536.30 was disbursed to Complainant Smith, Tenants Traxler, or otherwise. 

After Tenants Traxler vacated the property located at 5107 Natalie, Tenant Linam entered into a lease agreement.  Tenant Linam ceased to pay rent after October 2013.  The property at 5107 Natalie was vacant November 2013 and December 2013.

 Prior to Respondent McElwee becoming Principal Broker for Betty Krenz & Associates, on May 18, 2012, Tenants Adcock entered into a Lease Agreement for 5 White Cloud, Greenbrier, Arkansas.  During the term of their lease agreement, Tenants Adcock paid $145 in late fees which were not paid to Complainant Smith.  The property management agreement did not state late fees were to be retained by the managing agent.  Respondent McElwee did not provide any trust account record to indicate that the balance of the late fees was disbursed to Complainant Smith or otherwise.

Prior to Respondent McElwee becoming Principal Broker for Betty Krenz & Associates, on or about July 26, 2013, Tenants Keith signed a lease agreement for the property located at 5 White Cloud, Greenbrier, Arkansas.  A Security Deposit of $1,200 was listed on the lease agreement.  Tenants Keith paid the monthly rent as stated of $1,200 from August 1, 2013 through December 31, 2013.  A separate Security Deposit Agreement was signed by Tenants Keith and a note was written on the bottom which stated, $500 to be paid and $100 per month until paid.  Between August 1, 2013 and December 30, 2013, Tenants Keith made additional payments toward the security deposit in the amount of $400.  The total Security Deposit held on December 2013 was $900.

On November 7, 2013, Complainant Smith sent an email to Betty Krenz & Associates to terminate the property management agreement for 5107 Natalie, Alexander, Arkansas.  

On November 10, 2013, Complainant Smith signed a Property Management Agreement with Mike Berg Co. Management for 5107 Natalie, Alexander, Arkansas.  

On or about January 31, 2014, Respondent McElwee issued check # 3414 in the amount of $1,712 payable to Complainant Smith.  The check was for the final distribution of rents due to Complainant Smith for both properties managed by Betty Krenz & Associates. The property located at 5107 Natalie was vacant for November and December 2013.  Tenants Keith remitted $2,400 for rent for November and December 2013.  Respondent McElwee deducted a seven percent (7%) management fee of $168, a $10 eviction protection plan charge and a $250 cancellation fee which left the net amount to distribute of $1,972.  Respondent McElwee deducted a $250 cancellation fee for the property located at 5107 Natalie which resulted in the net check paid to Complaint Smith of $1,712.  The management agreement for 5107 Natalie specified a $200 cancellation fee.

On or about January 31, 2014, Respondent McElwee issued check # 1174 in the amount of $850 from Betty Krenz & Associates Security Deposit Trust Account for the security deposit received from Tenants Keith.  The tenant ledger for Tenants Keith reflected a security deposit collected of $900. Respondent McElwee did not provide any trust account record to indicate that the balance of the Security Deposit held by Betty Krenz & Associates in the amount of $50 was disbursed to Complainant Smith, Tenants Keith, or otherwise.

On or about September 19, 2014, Executive Broker Betty Krenz mailed a letter to customers that stated she would be closing Betty Krenz & Associates and all cancellation fees would be waived. On or about September 23, 2014, Complainant Smith sent a letter to Respondent McElwee to request reimbursement of the cancellation fees he had charged her upon termination of her management agreement November 2013.

Complainant Steven W. Caver

Sometime in 2011, prior to Respondent McElwee becoming Principal Broker, Complainant Property Owner Caver entered into a Property Management Agreement with Betty Krenz & Associates for the property located at 115 W. 7th Street, North Little Rock, Arkansas.  

On or about March 20, 2013, Tenant Brittany Keifer wrote Check # 352, dated March 29, 2013, payable to Betty Krenz & Associates in the amount of $750 for the security deposit on the property located at 115 W. 7th Street North Little Rock, Arkansas. Tenant Keifer signed a Security Deposit Agreement with Betty Krenz & Associates.  On March 21, 2013, Tenant Keifer’s $750 Security Deposit check was deposited into Betty Krenz & Associates Rent Escrow Account.

On or about April 1, 2013, Tenant Keifer entered into a Residential Lease/Rental Agreement with Betty Krenz & Associates for the subject property. The Lease Agreement began on April 1, 2013, and ended on March 31, 2014. The Lease Agreement identified Betty Krenz & Associates as "Management" and stated that Management shall hold the Tenant’s $750 Security Deposit.

On or about September 8, 2014, Complainant Caver sent Respondent McElwee a letter terminating the Property Management Agreement with Betty Krenz & Associates for the subject property and informed Respondent McElwee he was moving the property management to Marshall Peters & Associates.

Respondent McElwee did not provide any trust account record to indicate that the Security Deposit held by Betty Krenz & Associates in the amount of $750 was disbursed to Complainant Caver, Tenant Keifer, Marshall Peters & Associates or otherwise.

Marshall Peters, Principal Broker for Marshall Peters & Associates, signed a statement dated July 8, 2016, which stated he had never received any security deposits for any of the properties moved to his firm for property management from Respondent McElwee or Betty Krenz & Associates. 

Complainant Ben Zikri

Complainant Property Owner Zikri registered Mayroz Management LLC with the Arkansas Secretary of State.

During the year 2012, Complainant Zikri purchased, in the name of Mayroz Management LLC, two properties, 2900 W. 27th Street, Little Rock, Arkansas, and 3112 Cobb Street, Little Rock, Arkansas.

3112 Cobb Street, Little Rock, Arkansas – Betty Krenz & Associates

On or about June 20, 2013, prior to Respondent McElwee becoming Principal Broker, Complainant Zikri, for Mayroz Management LLC, signed a Property Management Agreement for the property located at 3112 Cobb Street, Little Rock, Arkansas, with Betty Krenz & Associates.  The Agreement was signed by Salesperson Debbie Hagan.  

On October 2, 2013, check # 21839 in the amount of $585 payable to Mayroz Management cleared the Betty Krenz & Associates Rent Escrow Account.  The memo line on the check noted "July Rent."  On October 4, 2013, check # 21847 in the amount of $1,170 payable to Mayroz Management cleared the Betty Krenz & Associates Rent Escrow Account.  The memo line on the check noted "August & September."  The total amount distributed to Mayroz Management for July through September 2013 rent was $1,755.  The records of Betty Krenz & Associates did not reflect that the property located at 3112 Cobb Street was leased, nor was there a record of rent deposits reflected in the bank accounts of Betty Krenz & Associates.

On or about November 1, 2013, after Respondent McElwee became Principal Broker, Tenants Castor and West entered into a Residential Lease Agreement with Betty Krenz & Associates for the property located at 3112 Cobb Street, for the period from November 1, 2013 through October 31, 2014.  The Lease Agreement noted monthly rent of $650 and receipt of a Security Deposit in the amount of $650 to be held by Betty Krenz & Associates.  No signatures were on the Lease Agreement.  Other Addenda were signed by Tenants Castor and West and Salesperson Debbie Hagan.

On or about November 4, 2013, receipt # 8005 was issued to Tenant West for November 2013 rent in the amount of $650 paid with cash.  A receipt was not located for the Security Deposit of $650 and a deposit in that amount from Tenants Castor and West was not found.

On November 5, 2013, Salesperson Debbie Hagan transferred her license to Mike Berg Co. 

On or about December 4, 2013, receipt # 8066 was issued to Tenant Castor for $650 cash paid for December 2013 rent.

On or about December 4, 2013, check # 22003 was issued to Mayroz Management in the amount of $585 for November 2013 rent.  On or about December 5, 2013, check # 22005 was issued to Mayroz Management in the amount of $585 for December 2013 rent.  The owner statement for Mayroz Management for the period from January 2013 through December 2013, reflected an overpayment of rent from Betty Krenz & Associates to Complainant Zikri (Mayroz Management) in the amount of $1,755.  A written note on the owner statement read "Paying as if negative was covered by rent (Debbie pd w/no record of rents rec’d)."  A second note read "paid owner per Bill."

On or before August 27, 2014, Complainant Zikri provided a copy of a Quitclaim Deed, recorded in the Pulaski County Circuit Court, for the subject property at 3112 Cobb Street.  The Grantee was Daniel Solomon Sade.  Subsequent owner distribution checks for September and October 2014 were issued to New Owner Sade.  Respondent McElwee as Principal Broker for Betty Krenz & Associates did not obtain a written Property Management Agreement with New Owner Sade.

On October 31, 2014, Tenants Castor and West vacated the subject property.  Respondent McElwee provided a monthly owner statement to Complainant Zikri which reflected payment of $580 to New Owner Sade for October 2014 rent disbursement.  Respondent McElwee did not provide any trust account record to indicate that the Security Deposit in the amount of $650, indicated as held by Betty Krenz & Associates per the signed lease agreement, was disbursed to Complainant Zikri, Tenants Castor and West, New Owner Sade or otherwise.

3112 Cobb Street, Little Rock, Arkansas – Guardian Realty

On or about October 30, 2014, while Respondent McElwee was still licensed as Principal Broker for Betty Krenz & Associates, Complainant Zikri signed a Property Management Agreement on behalf New Owner Sade, for the property located at 3112 Cobb, Little Rock, Arkansas, with Guardian Realty, Bill McElwee.  Paragraph 6(e) stated, "…Managing agent agrees to secure the prior approval of Owner on all expenditures in excess of $350 for any one item except monthly or recurring operating charges and emergency repairs in excess of the maximum, if in the opinion of Managing Agent such repairs are necessary service to the Property and/or Tenant."  Prior to this date on October 21, 2014, Complainant Zikri on behalf of New Owner Sade signed an Addendum to the contract for disclosure of a pecuniary interest in McElwee Maintenance and an eviction protection plan.  Respondent McElwee was licensed as Principal Broker with Betty Krenz & Associates when the Guardian Realty Property Management Agreement was executed.

On or about February 23, 2015, Respondent McElwee, as Principal Broker for Guardian Realty, prepared an owner’s report for Complainant Zikri on behalf of New Owner Sade, for 3112 Cobb Street.  A hand written note stated, "Renter moved out & trashed the house.  We are in the process of cleaning it and restoring it.  Hopefully, we will have a renter by the 1st of March."

On April 1, 2015, Tenants King and Moore signed a Residential Lease/Rental Agreement for the property located at 3112 Cobb Street, for the period from April 1, 2015 through March 31, 2016.  The monthly rent was $650 and the Agreement noted a Security Deposit in the amount of $650 as receipted and held by Guardian Realty.  

On or about April 1, 2015, Respondent Principal Broker McElwee prepared an owners report for the month of March 2015, for 2113 Cobb Street.  The report reflected $650 rent was collected and expenses of $650 were incurred for a net distribution of zero dollars to New Owner Sade.  A hand written note stated, "I will send you a complete breakdown of all charges less tenant’s deposit in a couple of days….Also this rent is for April."  Respondent Principal Broker McElwee did not provide Complainant Zikri on behalf of New Owner Sade an accounting of Tenants Castor and West’s security deposit.

The March 2015, owner’s report reflected a charge in the amount of $628 for "contract labor."  Attached to the owner report was invoice # 1031 issued from McElwee Maintenance in the amount of $1,500 for "Repaint entire house wall and trim. Includes materials. (sic)"  Respondent McElwee reflected the $628 deducted from March 2015 rent for contract labor as payment applied to the invoice.  A balance due of $872 remained as unpaid.  Respondent Principal Broker McElwee did not provide proof that Complainant Zikri or New Owner Sade had approved the painting expense which was in excess of $350 as required in the Property Management Agreement.  

On or about May 22, 2015, Respondent McElwee prepared the monthly owner report for May 2015.  The report reflected a deduction for $950 paid to McElwee Maintenance to replace the heating unit blower.  The invoice noted "Ok’d by Ben."  Complainant Zikri stated he did not approve this expense.  Complainant Zikri requested the documents for the heating unit blower be provided to him so he would have them for warranty work if necessary.  Respondent McElwee did not provide the documents.  

On or about June 9, 2015, Respondent McElwee served a notice to vacate to Tenants Moore and King for failure to pay June 2015 rent.  On the June 2015 monthly owner report, Respondent McElwee applied $650 security deposit for Tenants Moore and King to June 2015 rent.

On June 9, 2015, Complainant Zikri on behalf of New Owner Sade provided written notice to cancel the Property Management Agreement for 3112 Cobb Street, Little Rock, Arkansas.

2900 W. 27th, Little Rock, Arkansas – Betty Krenz & Associates

On or about September 6, 2013, Betty Krenz & Associates entered into a Property Management Agreement with Complainant Zikri (Mayroz Management LLC) for 2900 W. 27th, Little Rock, Arkansas, for the period from September 6, 2013 through September 30, 2016.  The agreement was signed by Salesperson Debbie Hagan.  

On or about November 1, 2013, Tenants Henderson signed a Residential Lease/Rental Agreement for 2900 W. 27th Street, Little Rock, Arkansas.  A Security Deposit of $650 was noted as received and held by management.  A hand written note at the top of the lease reflected receipt of $50 collected toward the security deposit and tenant would pay $50 on the 10th and 26th of each month until paid in full.

On or about December 3, 2013, Respondent Principal Broker McElwee prepared a monthly owner statement for 2900 W. 27th which reflected expenditures exceeded income on the subject property in the amount of $348.91.  Complainant Property Owner Zikri did not remit the negative balance for the property.

On or about December 5, 2013, Respondent Principal Broker McElwee prepared a monthly owner statement for 2900 W. 27th which reflected zero rent was collected and had a balance due from Complainant Zikri in the amount of $348.91.  A handwritten note stated, "Dec 2013 rent forgiven as no heat for 3 weeks – per Bill."  No further rent was collected from Tenants Henderson. No further owner statements were provided to Complainant Zikri.  Respondent McElwee did not provide any trust account record to indicate that the Security Deposit in the amount of $50, indicated as held by Betty Krenz & Associate per the signed lease agreement, was disbursed to Complainant Zikri, Tenants Henderson, New Owner Sade or otherwise.

2900 W. 27th, Little Rock, Arkansas – Guardian Realty

On October 31, 2014, Respondent McElwee became Principal Broker for Guardian Realty.  Respondent McElwee did not have a signed Property Management Agreement for the property located at 2900 W. 27th, Little Rock, Arkansas.

On or about May 1, 2015, Tenant Baird entered into a Residential Lease/Rental Agreement with Guardian Realty for the subject property.  Rent was $700 per month. The Agreement noted Tenant Baird paid $650 and would pay the $50 balance by May 8, 2015.   The Agreement noted a security deposit collected in the amount of $200.  On or about May 8, 2015, Tenant Baird remitted $50 to Respondent Principal Broker McElwee which was recorded as security deposit.   On or about June 1, 2015, Tenant Baird paid $650 toward June rent.  On June 8, 2015, Tenant Baird remitted $20 to Respondent Principal Broker McElwee which was recorded as security deposit.  

June 9, 2015, Complainant Property Owner Zikri provided written notice to Respondent McElwee to terminate the property management agreement.

On or about July 31, 2015, Respondent McElwee issued check # 20004 to "Daniel Solomon Sade" in the amount of $270 for the balance of Security Deposit held for Tenant Baird.  Daniel Solomon Sade did not own the subject property located at 2900 W. 27th Street, Little Rock, Arkansas.  Mayroz Management LLC was the property owner of Record.

AREC

On or about June 17, 2014, Respondent McElwee Issued check # 1173 from the Simmons Bank Security Deposit Trust Account for the balance of funds in the account in the amount of $18,125.03.  The check was deposited to the Simmons Bank Rent Escrow Account. 

Betty Krenz & Associates records reflected the last bank reconciliation completed by Respondent McElwee for the Simmons Bank Rent Escrow Account was for the period ending August 29, 2014. The bank reconciliation reflected several outstanding checks dated August 2014 and prior, which had not cleared the bank which resulted in a negative check register balance of ($4,096.79). Subsequent bank statements for the Simmons Bank Rent Escrow Account through December 31, 2014 reflected the final transactions that cleared the account resulted in an overdraft balance of ($438.49).