Susan Dupre talks with painter Regno Moreira at her new home on Brighton Street, Providence. Below left, she talks with carpenter Robert Atwood, and at right she checks out some plans.

The Providence Journal / Frieda Squires

PROVIDENCE — With painters and a carpenter working on the exterior of her three-family house on Brighton Street near Broadway, Susan Dupre has a lot of money going out, and not much money coming in.

Dupre bought the house for $200,000 in April, in a wildly contentious short-sale transaction.

In August, she had to have a sheriff evict the former owner from the first-floor apartment.

After the eviction, Dupre said, she found that a chandelier, a fireplace mantel and even a towel bar from a bathroom had been stripped from the apartment.

The former owner’s former real-estate agent had her state license suspended as a result of events surrounding the sale. The agent has contested the suspension, and her case is still under review by the Rhode Island Department of Business Regulation.

In the meantime, Dupre has renovated the second-floor apartment, and she now has tenants there. She’s living on the top floor, and she plans to move to the first floor after rehabilitation work is done there.

But Dupre says she may have to camp out on the first floor earlier than she wanted to, while renovations are still ongoing, to increase her cash flow by renting out the top-floor unit. She has a blog about her renovation project: http://divinevonipcreed. blogspot.com

It would help if Dupre could get her hands on the $10,000 deposit she made on the house back in October of 2008, money that is now in the custody of the Rhode Island general treasurer.

Until releases are signed by the other parties involved, or Dupre gets a court order to release the money, her money remains in legal limbo.

State regulations for real estate brokers and salespeople require deposits to be forwarded to the state if the money is in dispute for longer than 180 days.

However, Dupre’s situation is unique because she has actually purchased the house involved.

In most disputed deposit cases, buyers are trying to get their money returned after backing out of a sale.

But Dupre’s case involves a commission that may be owed by one or both of the former owners, Kathryn M. Taleriko and Khaled Aziz, to their former real-estate agent, Christine Adams. Adams has said she was unfairly cut out of the deal after trying to sell the house for two years.

Dupre said her $10,000 deposit was supposed to go toward her purchase of the house, not used in part to pay a sales commission, which is supposed to be paid by the seller. Sellers typically pay sales commissions from their proceeds at the closing table.

Although this situation “has nothing to do with me,” Dupre said, her $10,000 has been used as a bargaining chip in the dispute.

“There is no basis whatsoever for her deposit being held,” said Dupre’s brother, B.J. Dupre, one of the founders of the Armory Revival Co., a West Side real estate development company. “….Right now, you have to hire an attorney to solve it, which is really unfortunate.”

Dupre found the house for his sister, who recently returned to Rhode Island after a long residence in California. The house is located around the corner from his office, which is two doors down from the Seven Stars Bakery on Broadway.

Dupre, who has been in the real estate business for 30 years, says he is shocked that state officials have not returned his sister’s $10,000 to her, now that it is in their possession. He said it is “blatantly obvious” that the money is hers.

“I had this really misplaced confidence” in the system, he said.

According to Tim Gray, spokesman for the Rhode Island general treasurer’s office, there are 126 disputed real-estate deposits being held by the office — a total of $691,500 — in a noninterest-bearing account. Gray said some of the money lingers with the treasurer “for years” before issues are resolved. Currently, the oldest case, involving $13,000, dates from 2002, he said.

A much larger amount of money, $697,795, was paid in total deposits and fees by just one of the plaintiffs in three complaints made in October in U.S. District Court against the Carnegie Tower Development Company. The lawsuits involve buyers seeking to get out of contracts to purchase luxury condos at the new 22-story tower in Portsmouth, and have their sizable deposits returned.

Some real-estate deposits are held by lawyers, but according to Warwick real-estate attorney James J. Caruolo, most attorneys are not eager to get into the deposit-dispute resolution business.

Caruolo said that when he is asked to hold a deposit in escrow as a courtesy to a client, he requires both sides to sign documents that allow him to send any disputed money to the care of a court for resolution.

Two of the largest fines imposed on real-estate brokers by the DBR this year involved another disputed deposit.

Two brokers with a Providence commercial real estate company, Olympus Group Real Estate, were fined in connection with a contract to sell two apartment buildings at 777-787 Admiral St., in Providence.

Richard J. Amato and Gregory E. Micaleff, were fined $3,000 and $2,500, respectively for failing to transfer in a timely manner a $40,000 deposit made in the soured deal to the Rhode Island general treasurer.

Both brokers also had their licenses suspended for a 30-day period.

cdunn@projo.com