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Can Property Mangement do this???

16 posts by 7 users

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Mark E

Oct 01 '08, 11:41 AM


Okay here's the situation, I hired a property management company to find tenants and sign a one year lease with the management company.. the lease was up in July and from there they go on month to month (correct me if im wrong)... so I emailed the property management company on September 30 to say that I want to cancel my service they're providing and become the landlord for the tenants.. but I get an email back saying that the tenants are going to move out on Oct. 4?!?! Which is 2 days away! I haven't call the property management company yet because I got the email late but I will call in the morning.. My question is do they still have to notify me that the tenants are moving out 30 days before? And they are still collecting a property management fee out of the monthly rent so they are supposed to still work for me and let me know this situation correct? I mean it puts me in a bind because I have to find replacement renters in 2 days???!!


Edited Jun 26 2010, 06:03


Michael Rossi

Real Estate Investor from Ohio

Oct 01 '08, 04:17 PM


Mark,

What the management company can (or is supposed to) do should be covered in your written agreement with them. Does your agreement say that they are to notify you 30 days before the tenants move out? Even if it does, many tenants give little or no notice that they are leaving - they simply break the lease. That is just a normal part of the business.

Regardless of what your agreement with the management companies says, you're firing the management company - so it doesn't really matter. Just take over the management and move on.

Good Luck,

Mike


Edited Jun 26 2010, 06:03


Michel Lautensack

Property Manager from Berwyn, Pennsylvania

Oct 01 '08, 06:08 PM


I am a full time PM and would agre with the other post that you meed to read your agreement carefully - but regardless they should treat you like a valbuale clein and communicate thinhgs early and offen - we work very hard at communications and it is a never ending battle - I would call and see if you can work out or terminate

Mike


Edited Jun 26 2010, 06:03 by Moderator: Revmoed link, use signature


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 01 '08, 06:38 PM


Mike & Mike told you what to do w.r.t. the PM.

You need to find out if the tenants gave proper notice, though, and what your lease says. If they didn't give proper notice, they may still e on the hook. Month-to-month doesn't translate into moving out with not notice.


Edited Jun 26 2010, 06:03


Jon Holdman, Flying Phoenix LLC


Mark E

Oct 02 '08, 10:48 AM


Okay I talked to the property management person and he said that the tenants gave a written notice and that Property Management should of mailed, called, or emailed a letter stating that the tenants are vacating the premises. I told him that I didn't receive any notice (email, calls, or mail) from them and was getting upset because in the past year only 2 small incidents occurred at the property (grass/leaks) which Property Management called my cell and emailed me the issues, however now since the tenants were moving out they failed to contact me about this very important situation. In the lease agreement it states that they need to contact me about the 30 day notice from the tenants. I'm in a bind because the mortgage is due and renters are leaving in 1 day. What can/should I do?


Edited Jun 26 2010, 06:03


Ingrid Nagy Donor

Property Manager from Passaic, New Jersey

Oct 02 '08, 05:19 PM


Are you local? Does your PM handle the collection of rent and disbursement to you as well as the maintenance issues? The tenant is leaving no matter what. I would call them, visit them, assess the condition of the apartment and arrange to get the keys from them. Then'd I'd contact the PM to review the legal notice given by the tenant and when to insure that they did give proper notice. This would eliminate your ability to retain the security. You do probably have some recourse against the PM legally but I'm not sure if it's worth the battle. I would start advertising that place on craigslist, flyers, realtors, etc. and minimize my down time. You can deal with the rest later.


Edited Jun 26 2010, 06:03


Michael Rossi

Real Estate Investor from Ohio

Oct 02 '08, 06:48 PM


You should not be in a bind. Vacancies are a normal part of the rental business. You should try to find new tenants and you should pay all the bills associated with the vacant rental from the money you've saved from the income that is allocated to paying operating expenses.

On another issue, tenants should not be allowed to move out on the 4th without paying that month's rent. That virtually guarantees that you will have a month of vacancy. If the PM allowed that, they screwed up!

Good Luck,

Mike


Edited Jun 26 2010, 06:03


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 02 '08, 07:06 PM


Are these tenants leaving before the lease term is up? If so, they're still on the hook for the rent. I'm with Mike on a couple of points. One is that they should be leaving at the end of the month, not the 4th. So, as far as I'm concerned (and in my lease) they would owe me for October. The other is this shouldn't put you in a bind. Losing a few weeks rent is to be expected when tenants move out, and shouldn't cause you any grief as far as paying the mortgage.

At this point, be sure you understand the terms of your lease for the notice requirements and when they can move out, and what notice was given. I'd be dang sure the PM doesn't give back any deposit until everything is sorted out.


Edited Jun 26 2010, 06:03


Jon Holdman, Flying Phoenix LLC


Mark E

Oct 02 '08, 09:45 PM


Well here's issue, the tenants notified PM about there 30 day notice.. however the PM didn't notify me about them leaving the premises... So is PM held accountable? And since they are leaving on the 4th they just have to pay for the days they stayed for the 4 days correct? Im just upset that I wasn't notified about tenants leaving from PM and I could of already started the process of finding renters.. isn't that a breach of contract?


Edited Jun 26 2010, 06:03 by Mark E


Mark E

Oct 02 '08, 09:50 PM


Originally posted by Jon Holdman:
Are these tenants leaving before the lease term is up? If so, they're still on the hook for the rent. I'm with Mike on a couple of points. One is that they should be leaving at the end of the month, not the 4th. So, as far as I'm concerned (and in my lease) they would owe me for October. The other is this shouldn't put you in a bind. Losing a few weeks rent is to be expected when tenants move out, and shouldn't cause you any grief as far as paying the mortgage.

At this point, be sure you understand the terms of your lease for the notice requirements and when they can move out, and what notice was given. I'd be dang sure the PM doesn't give back any deposit until everything is sorted out.


Well the 1 year lease is up and now they are current going on month to month..


Edited Jun 26 2010, 06:03


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 02 '08, 10:09 PM


Again, what does your lease say? Mine does convert to month-to-month after the lease term is up. And, it required 30 days notice. However it also says you can only move out at the end of the month. So, with my lease, you could not move out on the 4th and only pay four days, even if you gave notice on the 4th of Sept. You would have to pay the full October rent.

If he had given notice on 9/4, I would have started advertising it right away. You really have to plan for some turnover time. Unless its spotless, its hard to get a new tenant in with zero work. So, if I had found someone who would move in on, say, 10/15, the old tenant would have only had to pay until until that date. If they didn't pay, it would come out of the security deposit. If the security deposit didn't cover the rent that wasn't paid, and any damages, it would go do small claims court (assuming the damage isn't too bad.) If I didn't get a check for a full months rent by the October due date, an eviction gets filed.

But, this all comes back to your lease. If it just says 30 days notice is sufficient, then they did the right thing, and you have no claim against the tenant. The PM should have taken care of getting a new tenant. You would still be out at least part of a month's rent. That's just part of this business, and you have to expect that. Further, if you PM is like many, they have a leaseup fee from a half to a full months rent. Just have to account for all these costs in your planning.


Edited Jun 26 2010, 06:03


Jon Holdman, Flying Phoenix LLC


Mark E

Oct 02 '08, 10:22 PM


Originally posted by Jon Holdman:
Again, what does your lease say? Mine does convert to month-to-month after the lease term is up. And, it required 30 days notice. However it also says you can only move out at the end of the month. So, with my lease, you could not move out on the 4th and only pay four days, even if you gave notice on the 4th of Sept. You would have to pay the full October rent.

If he had given notice on 9/4, I would have started advertising it right away. You really have to plan for some turnover time. Unless its spotless, its hard to get a new tenant in with zero work. So, if I had found someone who would move in on, say, 10/15, the old tenant would have only had to pay until until that date. If they didn't pay, it would come out of the security deposit. If the security deposit didn't cover the rent that wasn't paid, and any damages, it would go do small claims court (assuming the damage isn't too bad.) If I didn't get a check for a full months rent by the October due date, an eviction gets filed.

But, this all comes back to your lease. If it just says 30 days notice is sufficient, then they did the right thing, and you have no claim against the tenant. The PM should have taken care of getting a new tenant. You would still be out at least part of a month's rent. That's just part of this business, and you have to expect that. Further, if you PM is like many, they have a leaseup fee from a half to a full months rent. Just have to account for all these costs in your planning.


Hi Jon again thanks for you input and help, the lease does say that a 30 day notice must be given and it does convert to a month-to-month after the lease term is up which also requires a 30 day notice.. but my concern is the PM not the tenants the tenants aren't at fault (from what I believe) other than paying for the extra days for this month. I mean not notifying me about the tenants 30 day notice isn't right correct? Its hard for me to let it go because this is like a curve ball coming at me and it sounds like its my loss and should just except it? Im going to meet with the PM tomorrow any advice what to say? I had a conversion the other day asking them to push to find tenants ASAP... should I just find another property management company? Because currently im putting ads myself etc.. Thanks again everyone for your help!


Edited Jun 26 2010, 06:03


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 03 '08, 11:39 AM


OK, so there's something to change in your lease. 30 days notice before the end of the month they're moving out. Moveouts at the end of the month, not the beginning.

What does the agreement with the PM say? Are you supposed to be notified? I would think you should be, since that means a loss of income and a rent-up fee. If they didn't notify up in accordance with the agreement, you may have cause for action against them. I would have expected them to start trying to get a new tenant as soon as the notice was given. If they didn't, and your agreement indicates they should have, you at least have cause for complaint.

It all comes down to the agreement with the PM.

Have you put up a yard sign? If not, that would be the very first thing I did Saturday morning. Have you had a look to see how much work's going to be needed?


Edited Jun 26 2010, 06:03


Jon Holdman, Flying Phoenix LLC


Michael Rossi

Real Estate Investor from Ohio

Oct 03 '08, 06:03 PM


To be honest, I don't know why you would want to be notified just because a unit is turning over (tenant leaving). What's the point in having a management company if you're going to micromanage the operation or be bothered by noticed from the PM about normal operations. It seems to me that they knew the tenant was leaving and they would be looking for the next tenant.

You keep asking if the PM is accountable. Accountable for what? How did their failure to notify you change anything in this case? Assuming that they didn't know that you were firing them in advance, then they would simply have filled the vacancy. In other words, everything is normal.

Mike


Edited Jun 26 2010, 06:04


This post has been removed.

Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Oct 03 '08, 07:47 PM


I may have missed this part, but has the PM been advertising the property as vacant since the 30 day notice? That's the real failure, if it wasn't happening. You're paying them to keep the property occupied. Like Mike said, their job is to handle that - no need to micro-manage.

Like the others have said, part of the business is having vacancies. If you don't have the capital to factor these in, you should not be buying rental property . . . sorry to be harsh, but this is one of the fundamental failures of new landlords. It may not be the case, but I'm writing this so everyone can learn from the experience.


Edited Jun 26 2010, 06:04


Medium_bp-squareJoshua Dorkin, BiggerPockets
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