Property Manager I fired today did repairs without an approval. Am I liable?
Hi All,
Here's a situation.
I bought a rental property from a turnkey provider based in Indianapolis last November with a tenant in place. This provider rehabs, sells and manages a property so they've managed a property from day 1. However, the tenant was late on rents most of months (10-20 days late) and finally refused any kinds of communications so on July 25th the property manager started the eviction process (we should have started earlier). I wasn't happy with the property manager because of their lack of communications even after I raised concerns to the manager and the owner few times. I always found out about tenants missing rents when I received no distribution and saw statements with no rent. I had to follow up constantly and escalated to the owner few times but it did not improve (I should have left earlier).
A month went by after they started the eviction process, I followed up with the property manager and instead the owner responded saying they took the possession of the property and they have several prospects for the property. 3 weeks went by and I didn't hear anything so I called their office and found out the property manager left the company. By this time, I was already charged $125 for rekeys and deadbolts/doorhandles so I assumed the turnover repairs were minimal. I asked the owner the progress of tenant search and said the tenant trashed the house badly so they are still doing repairs and it's not ready for showing yet. He said it's going to be around $2000 and they will complete repairs in 2 days. I asked to provide a list of repairs and before/after pictures few days later. I expressed serious concern that I wasn't aware of these repairs and their lack of communication. In an effort to keep my business and considering how badly the investment they sold performed (negative return due to 3 lost rents, attorney, repairs) compared to their projected of 16%, he offered he will cover the repair cost of $2000. I told him that I have three requests with specific due dates over next 7days while I re-consider the relationship and he agreed he will fulfill my requests. Fast forward 7 days, he failed to communicate in timely manner so today I told him I'd like to terminate the agreement but would like him to consider covering portion of expenses and of course he said no and he will send out a statement with outstanding balance shortly. He actually holds a security deposit of $1225 for the evicted tenant.
My question is this. In our property management agreement, it says below but I was never asked for an approval for repairs done after the eviction which is about $2000 (more than the limit that requires an approval). Am I legally liable for this expense and what would you do?
'Single maintenance or repair items up to $200 will be performed at Agent's discretion and in accordance with the Lease Agreement. without prior Owner approval. Agent will obtain Owner's approval for any maintenance and or repairs that may exceed $200. If an emergency or extraordinary situation occurs, or if Owner cannot be reached, agent will proceed with the needed repair/maintenance.'