Property Management Scenario - Unauthorized Repair - WWYD?

Question

Wanted to run a scenario that just occurred between my investor friend and my property manager.

Problem: Hot water heater developed an internal leak that caused the breaker to keep flipping. No external leaks.

PM emailed my friend (to his old email) mentioning what the problem was, that they had a plumber come look at it, the plumber recommended replacement and the replacement cost would be $1300 and asked him how he would like to proceed (this was about 2pm in the afternoon). This is interesting since the property statements go to his newer email that he told them to use. This is where the breakdown begins.

My friend responded to the property manager (by text) the following morning at 6:47am saying he was going to DIY repair due to the high estimate (replacement hot water heater delivered was $500). Property manager responds saying ok, he will get with the plumber and keep my friend updated. The plumber is not currently at the house (approx 7am).

I drive by the house around 8:15 and the plumber is there. I drive back by at 10:30 and the plumber is gone. I let my friend know - hey you may want to call the PM and see what the deal is. Friend calls the PM - PM tells her he didn't hear anything back by the end of the previous day so he gave the plumber the ok.

Reasons the PM gave for doing the replacement:

- It was emergency repair (seems to me, if that was the case, the PM should have texted, called and then flipped the breaker and unplugged the machine). Since when can real emergencies wait until the next day? Really should have been a call/text if it's an emergency (in my opinion).

- How they upgraded from a 40gal to 50gal and it's just a "couple hundred bucks more". This again - since when are replacements upgraded at the property managers discretion? I don't think the overall install price was bad but I don't think it was necessary either. This is a small 1000sqft 2bed/3bath house, 40gal is the standard. No reason for the upgrade.

- Not following the authorization clause that all repairs over $150 have to be approved by the landlord UNLESS it's an emergency. I am not understanding how this constituted an emergency. An active leak is an emergency. A hot water heater that you can shut the valve off to/flip the breaker/unplug cannot be an emergency. Not having hot water for one night at the most is not a necessity/emergency for the tenant. The reason that clause exists in the contract is literally to prevent that exact situation.

The spread between the DIY (it's literally 3 connections) and the plumber install is what gets me as well. That's almost $800 peed away for a couple hours work at the most.

It made me a little salty though. I was imagining myself in that scenario. I personally would not accept the current outcome. Best compromise I could come up with was splitting with the property manager - why? The DIY repair would've come in at slightly under $500. Rules weren't followed by the PM. I personally believe the PM lied about what he told the plumber about not doing the work - since the plumber arrived AFTER the "stop work" texting conversation took place. It's far from an "emergency". My friend is a female as well - I hate to think that had anything to do with it, but that PM has never treated me that way either (I am a very large and heavy male lol). I am really considering making a call at this point because I just don't like the principle. I would be prepared to self manage or switch property managers if needed - there are plenty in the area.

Thoughts? What would you do?

Drew Sygit · Answer

Not enough info to "Vote"!

What does the management contract state about this?How does it define an emergency?Who defines what an emergency is?

What is state/local requirements for lack of water?- Could water supply to the tank be shutoff w/o affecting water supply for the rest of the house? Most tanks are NOT plumbed for bypass.

What are the local municipality permit requirements for tank replacement?

If required, was a permit pulled and inspection passed?

Appears the cost was $1300, tank $500, so you are assuming labor $800.- Did it include a permit and what was that cost?

In Metro Detroit, $1300 with permit would be a fair price.

How many other quotes have you obtained from licensed plumbers?

Clare Pitcher · Answer

Hey Jeremy,

The property manager ABSOLUTELY should have called. If this as deemed as an emergency and is above the maintenance limit, a phone call, text, and email should have been sent immediately. I am not sure what the PM's policy is on owners doing their own work, but if they allow this, then the owner should have been able to do their own replacement. Our specific company does not allow owners to do their work, but we would get a second opinion, another estimate at a minimum.

With you not being the owner of the property, I do not think it makes sense for you to reach out. If your friend is bothered or upset by the situation it is her responsibility to reach out and get the situation resolved. The PM has no obligation to speak to you on someone else's property/ maintenance situation.

Ultimately, it's up to her to decide if this is enough to change management, argue the payment, etc.

Jeremy Horton · Answer

@Drew Sygit Had to do some formatting, now it won't let me tag you

Drew Sygit · Answer

"No permit/inspection pulled for this. I wouldn't want the time/hassle/extra expense involved in pulling a permit. That is for a plumber. Homeowners can do their own repairs without pulling a permit."

***Please check on this.

In every city in Metro Detroit (132 cities) a homeowner can ONLY pull their own permit on their primary residence - NOT on a rental property they own.

Yes, you could hire a handyman to do it, or do it yourself, but most PMCs would avoid doing this.

Here's a similar situation nightmare:
Owner hires neighborhood kid to cut their lawn. There's a ditch that the kid slips on while operating the mower, and their foot goes under the mower leading to amputation.
OWNER PROBLEM and their insurance may deny the claim, exposing homeowner directly to the eventual lawsuit. Owner loses lawsuit, has to seek bankruptcy protection.

Now, what happens if a PMC hires the kid instead of a properly insured contractor - just to save a few dollars?- Pretty sure the owner will sue their PMC.

Owners should think their way through some of the reasons PMCs have to do thing differently than the owner would handle it themselves.

Jeremy Horton · Answer

What does the management contract state about this?

How does it define an emergency? Unfortunately not defined - common sense would be something that has to be immediately addressed - an arcing breaker box, a smoking outlet, a leaking pipe. Something that would create further damage if not addressed immediately. Or something that effects the health/safety of the tenant.

Who defines what an emergency is? (see above)

What is state/local requirements for lack of water? Local law is that it has to be fixed in a reasonable amount of time after written notice given by the tenant.

- Could water supply to the tank be shutoff w/o affecting water supply for the rest of the house? Most tanks are NOT plumbed for bypass. There's no bypass but there is a valve directly in front of the hw heater on the supply side. So you could simply close that valve and leave water on for the rest of the house.

What are the local municipality permit requirements for tank replacement? No permit/inspection pulled for this. I wouldn't want the time/hassle/extra expense involved in pulling a permit. That is for a plumber. Homeowners can do their own repairs without pulling a permit.

If required, was a permit pulled and inspection passed? Technically required. No permit pulled and thus no inspection.

Appears the cost was $1300, tank $500, so you are assuming labor $800.
- Did it include a permit and what was that cost? Correct on the estimates. I'm assuming it took maybe 3 hours total - @150/hr comes to $450. They upgraded the tank from a 40 gal to a 50 gal (no reason why) and I'm sure charged 30% or so more than what the tank actually costs.

In Metro Detroit, $1300 with permit would be a fair price. I would agree that the price is fair for our area as well. Plumbing has skyrocketed the past several years. I think the argument is more the upgrading of the tank for no reason, then the lack of text/call etc for an "amergency". Then completing a repair essentially after being told not to.

How many other quotes have you obtained from licensed plumbers? Zero. I don't think the plumbing price is personally bad - it's the slew of other stuff. I know the PM wouldn't do this to me. I would absolutely blow a gasket and not accept the excuse of it being an "emergency" and the lack of text/call, then deciding to randomly upgrade the hw tank to a more expensive one (that's part of what bugs me too). I would not pay a penny of that bill (I would ask to be comped the difference between my DIY install and what the plumber charged ~$800). I personally think he'd comp it. He's lose A LOT more than that in a month if I swapped my properties to someone else (and I would be more than happy to if this couldn't be resolved).

Jeremy Horton · Answer

I agree. This Property Manager does allow you do to do your repairs (or choose who you want to do repairs) - especially when it comes to appliances. For example - let's say a refrigerator goes out. I can have Costco deliver, install and haul away the old one. Now we have one water line to connect - this is a handyman activity (in other words a $40/hr activity, not $140/hr plumber activity). I personally think a hot water heater falls in this category - this is a DIY/homeowner activity for somewhat handy people. Home Depot will deliver a hw heater for $500 w/ the install kit/pan etc. Old one goes to the road with a dolly (easy handman activity). 3 water connections are made up (another easy handman activity). Turn water on. Plug in and flip breaker back on. Good to go.

In my case, I've done several rehabs/flips etc and I have certain people that I like to use for certain things. My PM actually started using a few of my contacts regularly.

Part of my philosophy there came from the last PM company I used. They started using their own "in house" companies to do repairs. I felt like I was overcharged on a few things so I had to put a stop to that. I eventually did swap PMs due to other issues down the road.

Thanks for your thoughts!

Jeremy Horton · Answer

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Jeremy Horton · Answer

Jeez are the forums really this dead?

Jeremy Horton · Answer

Any votes for not pay? Any votes for pay and move on?

Property Management Scenario - Unauthorized Repair - WWYD?

Property Management Scenario - Unauthorized Repair - WWYD?

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