Clients seek restitution in wake of Tahoe rental scam

By Jenny Goldsmith

Nevada Appeal News Service

Truckee property owners and ski lease tenants lost a combined $100,000 when a Truckee-based vacation rental firm unexpectedly closed its doors last spring and was later charged with 46 felony counts of grand theft.

Now dozens of homeowners and tenants who have suffered losses of $1,000-$10,000 are wondering if they will ever see their money.

"You put your faith in people when you cut them a large check for a deposit," said San Francisco resident Bob Dearborn, who entered a ski lease through Vacation Property Management for the 2006-07 season.

After making several attempts to contact the rental company and collect his deposit of $2,300, Dearborn finally learned of the company's alleged fraudulent business practices.

"My money was stolen, and I hope (VPM owners) get penalized to the full extent of the law for what they've done," he said.

Another client of the company, licensed real estate agent Henry Gannett from Orinda, Calif., sued the rental firm's owner - Dean A. Clark - in a small claims court for the $7,500 he said he lost after entrusting the vacation rental firm to rent out his Tahoe Donner residence.

Gannett said he recently received a letter from a real estate restitution fund notifying him his claim was approved. He said because he filed the claim before October, when Clark's real estate license expired, his request was honored.

Gannett also said he put a lien on Clark's Washington residence to recover additional losses, as he suffered approximately $3,000 in court fees and other associated costs.

"You have to trust people on some level, and that's the tough part," he said. "If I were to rent again - which I'm not sure I ever will - I would show up at the office every season to check and see how business was going."

Sylvia Hill, board director and former president of the National Association of Residential Property Managers, also suggested ways customers could verify the credibility of real estate agents.

"When something like this happens, it puts a black spot on the rest of us," Hill said. "That's why there are these associations to enforce strict rules on how people handle your money."

Hill said Clark did not belong to the national association, and Deputy District Attorney Bill Cornell said he did not know whether Clark was a member of any other real estate association.

Cornell said while restitution is possible, the amount would be "pennies to dollars" compared with the losses. He also said he doesn't know where the money has gone, or where it will come from, but he hopes some will resurface after Clark's arraignment later this month.

Other local property management agencies, such as Truckee Getaway Vacation Homes, have received a number of Vacation Property Management's clients since the case unfolded.

However, owner Mike Donahue said while business has slightly increased, former clients of the firm seem very suspicious, and have made unusual demands.

For example, Donahue said one homeowner wanted to be paid at the time his property was reserved - an unlikely request.

"It doesn't shine light on us too well when other companies are ripping people off," he said. "With most VPM customers I've handled, it seems once bitten, twice shy."

Tips to avoid property management fraud

• Check to see if a management company belongs to a national association.

• If they belong to an association, find out if an agency is in good standing

• Make sure a Realtor has a current license through the Department of Real Estate.

• Ask for references and check with other clients to see about their experiences with a particular firm.

• Monitor statements, which should be delivered on a monthly basis. If a company is not being responsive with phone calls or monthly reports, look for another real estate agency.

• Go in personally and meet the property manager.

• Request a manual outlining company policies and procedures.

• If a company seems suspicious, talk to other area property managers about business ethics.

- Sylvia Hill, board director and former president of the National Association of Residential Property Managers