Paid 2K commission to realtor for tenant stayed less than 3 month

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Paid 2K commission to realtor for tenant stayed less than 3 month

Jason Koehl
Miami, FL · Member since 2009 · 8 posts · 1 vote

My friend who is an agent listed my MI home for rent on the MLS. Another agent brought me a tenant and their tenant signed a lease. This tenant lasted less than 3 months and then eventually moved out after giving an eviction notice due to him not paying. The realtor that brought the tenant still received over 2k commission for a tenant that couldn't afford the rent. When I reviewed the application from the tenant provided by the realtor the information such as his income wasn't accurate.

My main question is do you think I should receive my money back from the realtor since she presented a tenant that couldn't pay and lied on the application?

Should I just request it back or should I involve an attorney right away?

thanks for the advice and any techniques to get some of the money back

Appreciate insight, time and opinion

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  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    9y

    How do you know they lied or the info was incorrect? Also what did your lease say about this, I'd like to think that this agreement was spelled out if you're just handing over 2k.

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  • Ariel Smith
    Rental Property Investor · San Diego, CA · Member since 2016 · 306 posts · 205 votes
    9y

    @Jason Koehl it is ultimately your job (or property manager's if you have one) to approve and deny the tenant. The realtor just brings you a candidate and that's what they are paid for. It is similar to recruiting. I have similar questions to @Matt K. in that I'd need more details to provide an opinion on what to do moving forward. 

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    9y

    @Jason Koehl - Realtors bringing potential tenants usually have them fill out a rental application. The renter's agent isn't going to check all the information as they will rely on the landlord or the landlord's agent to do the tenant verification. What was the credit score? You aren't going to get money back. As @Ariel Smith said, when a landlord accepts a tenant and signs the lease, they have made a choice to accept everything in the application and it is inferred that due diligence was done.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    Your agent may give you a break and bring a new tenant. I know some leasing agents that offer a new tenant if the original one doesn't fulfill the lease. 

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Bottom line in contracts is the language regarding requirements, commitments and guarantees. Who approved the tenant and what does your contract with the agent spell out regarding guarantees.

    Unless the contract indicates a guarantee as to a minimum amount of time a tenant will stay the responsibility falls on whom ever approved the tenant. Since the tenant was evicted as opposed to breaking their lease it is likely your loss.  

    Lesson learned is to not use agents to find tenants, find your own tenants and thoroughly screen yourself with high standards.

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  • Jason Koehl
    OP
    Miami, FL · Member since 2009 · 8 posts · 1 vote
    9y

    Thanks for everyone's comments and opinions. The contract in the lease regarding commission only stated "Landlord agrees to pay broker a commission of 1/2 rent for lease"

    Originally the tenant's realtor tried to get a full month in addition: "Tenant would receive a 10% credit towards closing costs for each month of rent paid should they decide to purchase the home at market value at any during the lease and have first right of refusal at the commencement of the lease" Also the tenant realtor wanted 6% commission if tenant wants at any time to purchase the property at market value. Of course I didn't agree to this and said I'll give half a month of rent which I thought was standard.

    This is a large high end house that was my primary residence and in an area that doesn't have any luxury rentals. Looking at a different industry some employee recruiters will sometimes get paid on a monthly basis or at milestones. I could in future possibly consider including milestone payments in the contract to avoid this risk again. I'm not sure if realtor would agree but sounds fair to me and if there client has no other houses as options I could possibly dictate this.

    This was definitely a learning experience for me and appreciate everyone's insight and opinions.

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