Hi bp, I'm in the process of replacing our PM for our 30 Units Apartment complex. Our current PM is making the Transition very difficult by holding the money in their account. There are 2 issues I'm hoping to resolve after we switch to the new PM:
1) Having full control over the money being deposited by our Tenants
2) Avoid any data manipulation in the PM software so we always know exactly how much was deposited by the tenant.
In order to achieve that I have to ask the New PM to connect their appfolio software to our account vs opening up a new account (which we won't have direct access to). I want to first make sure it's possible before asking them to do that. Our current PM opened a new account with their name, had all money be deposited to that account and after paying themselves and the bills they disturbed the rest of the Money to us. This became a big problem, 1) we found out that during an audit that the money reported in their software doesn't match what was deposited by the tenants, so they were manipulating the data before we saw it in the software. 2) Now that we are switching to a new PM it has been struggle to get our Money out of their account. Any suggestion would greatly be appreciated. We are still finalizing the negotiation with the new PM, so once we agreed on the logistic I want to ask them to not open a new account and connect their app-folio to our account so we would have control over the money.
@Keivan Darius I hate to hear that. There are a lot of laws around holding deposits.
As a member of the National Association of Property Managers (NARPM), there is a Code of Ethics which we have to abide by. https://www.narpm.org/code-of-ethics/
There definitely shouldn't be any irregularity between what the tenants paid and what's in the account.
I would report them to your real estate body.
Thank you @Cameron Tope , However do you know if it’s possible for the PM to use the investors account vs their own account and then distribute the money to the investor once a month ?
A lot of property managers around me use software like Buildium, Appfolio, Tenant Cloud, etc. To manage the properties. But, sense they're using the same account to manage as me, I can go into my Appfolio account, which is the software many PM use, and see what's going on.
When looking for a PM, make sure that they have good software that you can access anytime.
Hi @Caleb L.
Thanks for the feedback. The main issue I have at the moment is that I don’t have access to my money. Now that I’m replacing the PM. I’m at their Mercy to give me our money. I can check the software any time to see what’s in there but I still don’t have control over the money. For the new manager I want to see if anyone have worked into the agreement they the PM uses the owner account vs creating a new account they only PM had direct access to
I don't know if there is a way for them to link the account so that you would have full control over the money but you should be able to log into your owner's portal and see how much each tenant has paid. Then just compare that to what their monthly rent is per the lease and everything should balance out.
If their rent is $1000 a month and it is showing that they paid $900 then there is your red flag to see if the tenant did not pay in full or if there may be some sort of manipulation.
Originally posted by @Keivan Darius :
Thank you @Cameron Tope, However do you know if it’s possible for the PM to use the investors account vs their own account and then distribute the money to the investor once a month ?
Good question! You as the owner are not supposed to have access to the account. It should be in a trust account held by the broker. This prevents owners from unjustly taking security deposits.
Hope that makes sense.