Is my property management company doing something illegal?
Here's the situation: I bought a 16-unit complex in Fresno in May. It's in a bad neighborhood and I knew it would take a lot of work so I hired a property management company. Normally I manage my own properties, but I'm really busy with some recent purchases and work so I decided to pay out the money so that I wouldn't have to worry about it. The problem is that they've been negligent, ineffective and possibly criminal. Without too much drama or embellishing, I will try to give you the bullet points.
- They're running their repairs through their own maintenance company. This was disclosed to me at the beginning, but they are billing me extremely high for some very basic stuff. They're also not putting unit numbers on some of the bills so I have no idea what unit it was for.
- They have four vacancies and when I scoured the web looking for listings of the vacant apartment, I could only find postings on Trulia and Zillow, none of the auxiliary sites.
- They recently informed me that one tenant was withholding her rent because she had been advised to not pay until repairs were taken care of. They tried to make it seem like she was being unreasonable, but they couldn't even tell me what the repairs were that she was asking for.
- They send me statements at different days of the month and they skip the last few days of the month. It's not 6/27-7/26; it's 7/1-7/26 and 8/1-8/26. So they're just sending out statements and not waiting for the end of the month. They also forgot to send me a statement in July and got an attitude when I asked why it hadn't been sent.
- I just found out that the "lawyer" that they're charging me $900 for evictions is actually the office manager of the company who does nothing more than serve papers. This was NOT disclosed to me. She took three weeks to file the most recent unlawful detainer of a tenant who had gotten into a fight and was two months behind on his rent. I don't mean three weeks to decide to do it; I mean I told her to evict him and it took her 23 days to file the paperwork with the courts. She claimed to be trying to get ahold of him but when I asked her how many times she had been out to the property, she admitted it was three times in as many weeks. So she cost me almost a month's rent with her laziness. I also went through the charges on her invoice and they add up to $880, but the total is $900. I went back to my last eviction and it was the same. They also get a flat fee every month for management, not a percentage of rent collected, so they make more money if they put bad tenants in my property, which strikes me as a huge conflict of interest. And the more that the tenants trash the place, the more repairs they can charge me for.
- One of our tenants moved out in July. There's a $100 bill for cleaning his unit that was charged to me on 7/16 and a statement saying that his apartment was in the same condition that it was when he moved in so they gave him back his full deposit: dated 7/17. They took the $100 out of my owner draw, instead of out of his security deposit. So either they didn't do a walk through, or forgot to charge him or something, but either way, they decided to try to skate it past me and hoped I wouldn't notice.
- Since before the purchase was complete, I told them that I wanted a section of the roof repaired since there have been problems with leaks and tenants have even reported it to the city (under the previous owner). It's been over three months and they haven't even gotten me a bid.
- There were bed bugs when I bought the property. I told them that I wanted the entire complex heat treated. It took them two months to schedule this.
- The statements, the invoices and the owner draws never match up. I am getting ready to print out everything they've ever sent me and enter it all in myself to see what the heck is going on.
Do you want to know the really twisted part? I am a property manager! I own a property management company in the San Jose area, but since business has grown so much, I decided that I didn't want to deal with an out of town property in a bad area. I assumed that they would handle things the way that I handle things for my clients. Since I've never screwed up this badly, I don't know where the line is between lazy and breech of contract. They've lost me money and instead of making my life easier, they've made it harder because I have to try to figure out what they're doing. This is not an exhaustive list, there's a lot more. My concern is that when I purchase the building, the bank required me to sign a one year property management agreement as part of the deal if I wasn't going to manage it myself. It's only been three months and they've already done a lot of damage. I've never tried to hold a client who wasn't happy with my services, but I'm worried that they're lazy enough to keep the contract and continue billing me $85 for 2 lightbulbs and 3 outlet replacements on every unit. They're taking home more money than I am from this property each month.
Do I have any options other than trying to be a big enough pain that they let me go as a client? I'm genuinely concerned that things are only going to get worse from here.