From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1519 topics, 14414 posts — Last Post 04/20/14, 02:59AM

BiggerPockets Exclusive PRO Area

117 topics, 839 posts — Last Post 04/18/14, 05:47AM

New Member Introductions

10896 topics, 85721 posts — Last Post 04/20/14, 06:21AM

Real Estate Success Stories

396 topics, 6161 posts — Last Post 04/19/14, 05:20PM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5943 topics, 46834 posts — Last Post 04/20/14, 06:16AM

Renters

643 topics, 5817 posts — Last Post 04/19/14, 09:29AM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

657 topics, 6278 posts — Last Post 04/20/14, 05:52AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3683 topics, 29533 posts — Last Post 04/20/14, 06:16AM

Real Estate Guru, Book & Course Reviews and Discussions

1133 topics, 11562 posts — Last Post 04/19/14, 12:17PM

Ask About A Real Estate Company

741 topics, 7323 posts — Last Post 04/19/14, 10:36PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5606 topics, 43758 posts — Last Post 04/20/14, 05:18AM

Rehabbing and House Flipping

3334 topics, 31005 posts — Last Post 04/20/14, 06:08AM

Real Estate Development & New Home Construction

553 topics, 4685 posts — Last Post 04/19/14, 06:13PM

Innovative Strategies

703 topics, 6027 posts — Last Post 04/18/14, 08:48AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6678 posts — Last Post 04/19/14, 06:06AM

Rent to Own a.k.a. Lease Purchase, Lease Options

693 topics, 4902 posts — Last Post 04/19/14, 04:53PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1687 topics, 11292 posts — Last Post 04/20/14, 12:14AM

HUD, VA, and Tax Sales

415 topics, 3097 posts — Last Post 04/19/14, 10:19PM

REOs

1214 topics, 10578 posts — Last Post 04/20/14, 12:34AM

Short Sales

1534 topics, 13120 posts — Last Post 04/17/14, 04:44PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7207 topics, 70780 posts — Last Post 04/20/14, 06:00AM

Mobile Homes & Mobile Home Park Investing

638 topics, 5141 posts — Last Post 04/19/14, 09:49AM

Investor Basics

Starting Out

7706 topics, 60502 posts — Last Post 04/20/14, 05:08AM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4718 topics, 37215 posts — Last Post 04/20/14, 04:23AM

Real Estate Investor Marketing

1731 topics, 14094 posts — Last Post 04/19/14, 06:39AM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8994 posts — Last Post 04/19/14, 04:34PM

Multi-Family and Apartment Investing

1109 topics, 9239 posts — Last Post 04/19/14, 07:12PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

641 topics, 4896 posts — Last Post 04/20/14, 04:48AM

Business Basics

Goals, Business Plans & Entities

831 topics, 7562 posts — Last Post 04/18/14, 04:25PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2788 topics, 20023 posts — Last Post 04/20/14, 01:26AM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2732 posts — Last Post 04/19/14, 06:57PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2835 topics, 19704 posts — Last Post 04/20/14, 06:05AM

Creative Real Estate Financing

1210 topics, 8771 posts — Last Post 04/19/14, 08:28PM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1211 topics, 7995 posts — Last Post 04/19/14, 08:09PM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1924 posts — Last Post 04/19/14, 07:27PM

Contractors

269 topics, 1681 posts — Last Post 04/20/14, 04:59AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1990 topics, 11614 posts — Last Post 04/19/14, 07:40PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 428 posts — Last Post 04/18/14, 04:22AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15021 topics, 53962 posts — Last Post 04/20/14, 05:42AM

Real Estate Events and Happenings

164 topics, 2515 posts — Last Post 04/19/14, 07:29PM

Off-Topic

Off Topic

Off-Topic

2905 topics, 32411 posts — Last Post 04/19/14, 08:03AM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Landlord & Rental Property Questions » Please HELP!! Property Management Nightmare

Please HELP!! Property Management Nightmare

12 posts by 7 users

Signup


Happy New Year eveyone...I hope that someone can help me with a nightmare I'm dealing with. I have a Property Management co for a rental that I have in Arizona. The tenant skipped in Sept with 3 mos left on the lease and the place in a horrible mess. It has sat vacent since, but I've been sent receipts from the PM claiming the place has been reconditioned, but during a surprise visit, I am learning that NOTHING has been done. It's a pigsty. I've inquired with vendors and there are major discrepencies both on price quotes and that any work was even actually done by them on my property.

Here are my questions:

Is a property management company required to charge the property owner only what a hired vendor charged for the work completed, or can the PM create their own invoice for what was hired out?

If a PM fabricates, adjusts or fakes a vendors receipt to show that work was completed when it was not, or changes the price, what legal ramifications could they be facing?

Can the PM lose their RE Brokers license if it is proven these allegations are true?

What other resources should I seek as a recourse for being screwed?



SFR Investor · Wheat Ridge, Colorado


Sounds like you need a good lawyer.


Jon Holdman, Flying Phoenix LLC



Originally posted by Jon Holdman:
Sounds like you need a good lawyer.

Since a lawyer may cost more than I am out, I am hoping they have seriously broken the law and can be charged. I'm still investigating, but it appears that my evidence is solid and compelling.



SFR Investor · Wheat Ridge, Colorado


Your only real shot would be with the real estate licensing board. Those don't tend to be too tough on their own members.

Its almost certainly not a criminal matter, so the police will blow you off.

Seriously, if you want any real action, you're going to have to hire a lawyer and file suit against this guy.


Jon Holdman, Flying Phoenix LLC



Originally posted by Mark Douglas:
Here are my questions:

Is a property management company required to charge the property owner only what a hired vendor charged for the work completed, or can the PM create their own invoice for what was hired out?
It depends on what is in the contract you signed with the PM. I would never sign a contract allowing a PM to markup contracted work, but that type of clause is used by some lower quality PMs.

If a PM fabricates, adjusts or fakes a vendors receipt to show that work was completed when it was not, or changes the price, what legal ramifications could they be facing?
That is fraud but your remedy is most likely civil, not criminal charges. It is possible you might get a prosecutor interested in some form of theft charges but unless it is widespread I suspect you are going to referred to the clerk to file a civil lawsuit.

Can the PM lose their RE Brokers license if it is proven these allegations are true?
Yes, talk to the state licensing board and file a complaint with the supporting evidence.

What other resources should I seek as a recourse for being screwed?
You really need to sit down with a lawyer. Many times fraud allows you to seek multipliers of the actual damages you suffer, it is usually treble, meaning 3x. So, if they fraudulently billed you for say, $10k you might be able to seek $30k in compensatory damages. Depending on the statutes you might also be able to get punitive damages. Bottom line, get a good lawyer.



Real Estate Investor · Ohio


I hate to ask the obvious, but have you fired the management company? That should be your first step.

Mike



Contractor · Philadelphia, Pennsylvania


Can someone tell me why so many small business owners are reluctant to hire professionals like lawyers and CPA's?

You want these people in place BEFORE you need them.

Hire a lawyer.

Diane




These are all excellent comments and suggestions. I really appreciate the input.

I've heard that these sort of issues are common with PMs, but we shouldn't stand for it. What has happened to me is really a small matter overall. If I'm not reimbursed, I will be out about $2,400 when all is said and done, but it's the principle that this mom and pop company is blatently ripping off owners of the 135 houses and apartment buildings they manage. They handled three houses for me and in addition to this reconditioning situation, I've noticed that in the last several months I've been nickeled and dimed for leaky toilets, cielings, mailbox repairs, etc. Now I am investigating to find out if the repairs are legit.

So far, on the move out issue, I have two vendors who have confirmed that at the least, I've been overcharged. They are to confirm with me today that they were never actually hired to work on my property to begin with.

The contract with the PM does not mention anything regarding thier right to create vendor invoices or change prices. Only that they have the authorization to hire, supervise and discharge services and independent contractors for repairs/maintenance necessary.

I'm relatively new to rental ownership (3 years) so I suppose this goes with the learning curve. In the end, I will be talking to a lawyer, but instead of passing it off to someone who will charge me up the wazoo to investigate, I'm doing as much legwork myself so that in addition to saving money, I may also learn some ideas that will prevent me from getting ripped off in the future.

Thanks again. Any other ideas or comments are welcome, especially if they involve statutes or laws regarding fraud.



BiggerPockets Founder · Denver, Colorado


Mark -
I've been there before. In addition to contacting your attorney, I'd make efforts to get in touch with other landlords whose properties are being managed by this company (I was lucky enough to be included in a mass email to all owners when I was in a similar situation and emailed them all). This will prove to be helpful in uncovering if this company is acting improperly across the board.

I'd IMMEDIATELY find a new company, get an attorney, and then start contacting every agency that might be involved. If you really want to make a stink, contact the local press and put the pressure on them.

Here's a thread regarding the company I was dealing with. Perhaps you could start one here at BP and find others in your situation. Our posts tend to rank well in the search engines.


Small_bp-squareJoshua Dorkin, BiggerPockets
E-Mail: [email protected]
Telephone: 877-831-4704
Website: http://www.biggerpockets.com
Check us out on Twitter: @BiggerPockets



Thanks Joshua,

Some very good ideas. It was just confirmed by the carpet cleaning company that they have never done any work on my property. My next step....I have the PM's vacency list and will track down the property owners to see if they have gotten bogus bills as well.



BiggerPockets Founder · Denver, Colorado


There you go. The more research and evidence you can gather, the stronger your case is going to be here.

Good luck!

BTW - Get the carpet cleaning company to put in writing that they never worked on your property.

You could probably use that alone to get all your money back . . . I'd still talk to an atty for legal advice in this situation.


Small_bp-squareJoshua Dorkin, BiggerPockets
E-Mail: [email protected]
Telephone: 877-831-4704
Website: http://www.biggerpockets.com
Check us out on Twitter: @BiggerPockets


Rehabber · Santa Clarita, California


The advice to get a lwyer is sound and you should follow it. You should have had that in place prior, but as they say, water under the bridge now.

Secondly, learn from this mistake. I have said time and again that contracts are one of the single most important aspects of this business, including purchase, PM, contractors, etc. You must have an adequate knowledge of what you shoudl and should not have in contracts. Before hiring anyone else, make sure you have an iron clad contract in place that protects YOU.


Small_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com




Sign up