Former property management company screws me on the last billing

23 Replies

As some may know, I've been having some issues with the previous property manager who managed my two 30 unit buildings in Connecticut. I just received the last month's billing (10 days late no less), and they put through several under 250.00 "charges" for cleaning supplies, which they stated as usual cleaning supplies, but's it's never been charged in the last 3+ years I've used them.  They also charged just under 250 for landscaping, even though there is no grass to be cut.  So basically, 247.97 for spraying weeds; even though this has never been done or requested before.  In addition, both buildings were slapped with fines due to garbage which the property management company not only failed to clean up, but failed to notify me.  I've since not been reimbursed here.  

In their other charges, they also claimed to replace additional lightbulbs at a cost of $91.62 each bulb.  These are regular 2.00 LED A19 bulbs.

Is there any recourse here?  I'd love to get an audit of the actual charges for the last 3+ years and see if there was any excessive overcharges or such. I am just concerned if there would be any fallout if my current new property management company finds out that I've sued my old one. 

Open to suggestions and ideas. I hate it when I am thought to be played like a fool. Interestingly enough, one of the evictions they did in August mysteriously went back to the original amount charged instead of the inflated charge earlier in the year.

@Mike A. did they provide invoices from the contractors for these expenses? 

If yes the follow it up with the contractors directly. 

These little nibbles and big profit making for PMs. and its hard to control. 

That's why having a "honest" property manager is key. although hard and would impossible to get 100% right unless its in house.

Originally posted by @Hadar Orkibi :

@Mike A. did they provide invoices from the contractors for these expenses? 

If yes the follow it up with the contractors directly. 

These little nibbles and big profit making for PMs. and its hard to control. 

That's why having a "honest" property manager is key. although hard and would impossible to get 100% right unless its in house.

The new PM I hired has an in-house team for turn-overs.  The prior one hired out to one or two different contractors.  Initially, the pricing wasn't bad, but now they were literally raping me to turnover units.  I've requested several times for original bills, they refused to give them.  Crap didn't hit the fan until after the renewal a few months ago and then prices just literally doubled if not tripled.  After receiving notices from the City of fines which they allowed happen, I fired them with 30 days notice.  

Just concerned with the aftermath if I file a legal suit against them. Would it be worth it? Would the new PM be concerned that I sued the previous PM and think they're next? Or, would the previous PM contact my new PM and attempt to ruin the relationship?  Thus, I'd be up a creek.  That's my main concern.

@Mike A. how much money are we talking about?

Ie. what would you try and get out of them if you go to curt?

Also, how much did they charge you to turn these 2 bedrooms units and what was involved in the work?

Originally posted by @Hadar Orkibi :

@Mike A. how much money are we talking about?

Ie. what would you try and get out of them if you go to curt?

Also, how much did they charge you to turn these 2 bedrooms units and what was involved in the work?

I want to audit all their records, at my expense, and see how much premium they charged me over what they've been charging me since 2015. 4k on one, 3.6k on another for paint and cleaning out the stuff and dumping the garbage. Normally, it's around 1.8k, but even that was high. Since I have mortgages on both, I had not choice but to pay. There were five other units that needed to be turned over, and they wanted over 3k for each. I waited until August for the PM switch and the new company did it for significantly less (under a 1k each).

I have no problem for them to charge a bit over for setting things up to turn over the unit. But I would bet you 1000 bucks they were up-charging me at least 40% on each turn over. It just makes my blood boil. After the fine and BS unit turn over fees, I paid their termination fees for each building and left. 

Sadly this is really common. Nickel and diming seems to be a strategy with PM's.   We've had many cases of PM's charging for maintenance work they haven't even done!

Like @Dean Letfus say its common practice for some. 

Units turn should be no more then $2000 if there is no water heater or large item to replace.

I wouldn't take them to curt for them because you juts going to spend more money and it will stress you out. 

Lesson learned, juts try to have your new PM on board and make an agreement with them to see all inv for all expenses. 

In saying that some have in house maintenance and they show you invoice of their own maintenance arm, you have an INV but its internal and you can vet it.

I think that once you have a large portfolio, with say 25 units or more you can create your own website with maintenance request sections.

Then you can track the requests and at least know that they are real straight from the tenants.

Originally posted by @Hadar Orkibi :

Like @Dean Letfus say its common practice for some. 

Units turn should be no more then $2000 if there is no water heater or large item to replace.

I wouldn't take them to curt for them because you juts going to spend more money and it will stress you out. 

Lesson learned, juts try to have your new PM on board and make an agreement with them to see all inv for all expenses. 

In saying that some have in house maintenance and they show you invoice of their own maintenance arm, you have an INV but its internal and you can vet it.

I think that once you have a large portfolio, with say 25 units or more you can create your own website with maintenance request sections.

Then you can track the requests and at least know that they are real straight from the tenants.

Agreed. Total of 60 units in both buildings. I was going to buy another complex near Yale, and then hire my own team of one or two just to manage all four+ properties. I figured over 100 units I'd be able to afford it. Under their leadership, I have a negative return rate (before depreciation) of around 68k after rents and expenses over 3 years, so I backed off.  Our buildings in Hartford and Bridgeport are all positive.  This is the only complex which is losing money. One of the reasons why I feel they were cooking the books and inflating costs. It's also the reason why I want to bury them in legal fees. My lawyer will do it on contingency. For me, it's not about the money, it's about principle. If these crooks are doing it to me, can you imagine who else they are doing it to? I detest bullies.

The only thing that is stopping me is the fallout. If we was big enough in New Haven county to have our own employees on the ground, I'd smack them with a lawsuit and so many Interrogatories it would make anyone's head spin.

What percentage were they managing for? If it was low then that could explain them nickel and diming. Property management is almost a money loser to have as a business model. Owners tend to always think fees are too high for services offered.

Maybe the management company was too big,too small, too far away for the type of tenant base and rents per door,etc. Good management is VERY HARD to find. You have to treat them like gold once you do find them to keep them.   

Originally posted by @Joel Owens :

What percentage were they managing for? If it was low then that could explain them nickel and diming. Property management is almost a money loser to have as a business model. Owners tend to always think fees are too high for services offered.

Maybe the management company was too big,too small, too far away for the type of tenant base and rents per door,etc. Good management is VERY HARD to find. You have to treat them like gold once you do find them to keep them.   

Hardly. Their office was in the same town, a few blocks away. Maybe a 10 minute drive during heavy traffic. All they needed to do was answer support requests, turn overs and collect rent. That is all. Our team handled everything else. 10% gross.  Around 4k a month in basic management fees. 

Funny, when we put it out to bid, a 60 unit complex, we had more than enough companies willing to take it over.

If your concern is what your current PM will think, then maybe you should consider having the conversation with them. Tell them what your last PM did and ask them what recourse you should take. If they say you should consider suing them then act surprised (Gasp "Oh my, do you really think I should sue them?") then sue them for everything but their grandma's kitchen sink!!! I'm with you on this one. I hate bullies too. Make them pay. 

Does your cost to sue outweigh what you may get in return? If so, I'd give them awful reviews and tell all other investors you know to steer clear. 

What size are the units you're turning in New Haven? I own a condo by Quinnipiac River and use to be a property manager there for 3 years.

Originally posted by @Cameron Norfleet :

If your concern is what your current PM will think, then maybe you should consider having the conversation with them. Tell them what your last PM did and ask them what recourse you should take. If they say you should consider suing them then act surprised (Gasp "Oh my, do you really think I should sue them?") then sue them for everything but their grandma's kitchen sink!!! I'm with you on this one. I hate bullies too. Make them pay. 

I'd be amazed that any PM would go against another PM. I'd rather not tell them what we went through. I just told them we were not happy with their work, so we parted ways. I've already left a bad review on them through online media and my partner will sometime this week. It's just not right and they shouldn't be able to rip people off and get away with it.

Originally posted by @Jacqueline Carrington :

Does your cost to sue outweigh what you may get in return? If so, I'd give them awful reviews and tell all other investors you know to steer clear. 

What size are the units you're turning in New Haven? I own a condo by Quinnipiac River and use to be a property manager there for 3 years.

Not sure yet. The sizes range from around 700 to 1100 sq ft per unit. They are not very big. All of their past turn overs were around 1500 - 1800 which the sec. deposits covered. Yet, the most recent ones were more than double and it was a pure profit grab. Again, I have no problems with a PM charging a 10% - 20% fee on top of what the workers charge; everyone has to eat. However, there is no way on earth that they didn't up charge us on the last two or three turn overs at least double; if not more. We were talking about cleaning the unit out, some paint, replacing light bulbs and light patch work. Ironically, we were going through an eviction and the court actually ordered a real invoice. For paint and patching a 740 sq. ft. one bedroom apt., they charged 1650 plus tax. The Judge questioned the repair bill. 

@Mike A. If your new property management company in New Haven is worth anything, them finding out you are suing the old company shouldn't worry them.

If anything it should keep them on their toes to perform and prove their value. 

Originally posted by @David Wolber :

Where are these properties?  Are you still looking for a PM?  I'm very small, but have several properties and a team I use in place.  :)

Thanks!

Dave

MOXIE Management

Thank you for the offer, but we were able to find a management company to replace these tools in July. I will keep in in mind for our next purchase if you work within Fairfield or New Haven Counties. Please confirm. Always looking to form new partnerships with companies in the area. 

Originally posted by @Steven Hu :

Like  @Dean Letfus said, this is very common. Think the other way is, lawyers may not take your case either because they can't get much from your case. 

Legal counsel already on board, partner is more concerned about the fallout. That's where the hesitation lies.

Originally posted by @Craig Bellot :

@Mike A. If your new property management company in New Haven is worth anything, them finding out you are suing the old company shouldn't worry them.

If anything it should keep them on their toes to perform and prove their value. 

Perhaps, never thought of it in that way.  Thank you for the insight.

Originally posted by @Mike A. :
Originally posted by @David Wolber:

Where are these properties?  Are you still looking for a PM?  I'm very small, but have several properties and a team I use in place.  :)

Thanks!

Dave

MOXIE Management

Thank you for the offer, but we were able to find a management company to replace these tools in July. I will keep in in mind for our next purchase if you work within Fairfield or New Haven Counties. Please confirm. Always looking to form new partnerships with companies in the area. 

Good to hear you're all set. We are located in New London county with properties mainly in Groton/New London/Norwich. If you ever move up the coast, keep us in mind!

Thanks!

If you can believe, we're STILL dealing with an illegal tenant.  What the previous PM company did is rent the unit out to a section 8 tenant. He lost his eligibility and was evicted. The problem is, prior to eviction, he allow three other mates to move in to the apt. So, he left, they stayed. We had to file now a second eviction and go through the process all over again. Now, with the eviction granted because they never showed up to court, they refuse to leave. The CT Marshal now has to physically remove them from the building. They are backed up so much with evictions, this will not happen until the 31st of January. We've not received rent for this until since June.

A true nightmare. I just do not understand how people can move into a unit without a lease, so they are not tenants and they can just stay there rent free. They're even paying the apt's utilities. An absolute nightmare. I'd love to be legally able to go there with a bat and get them out. I've never heard of this.

The atty didn't add Jane/Joe Doe to the eviction since we were told by the PM that only the DSS tenant was there. She left after the eviction was granted by the court, but the other people stayed since they weren't named so we can to go through another eviction. The marshal is coming to physically evict them at the EOM. They are not even tenants. They are only there because they were staying with the original tenant.