Property Management common practice procedures in Cleveland Ohio

9 Replies

My wife and I own several SFR rentals in California that are being managed by a third party property management company. In California, our tenants pay all of their own utilities that are placed in their own names at the time of their placement.

This past year we have became out of state investors as well and have purchased six SFR's in Cleveland Ohio suburbs of Maple Heights, Garfield Heights and Euclid and are currently in escrow with three more set to close this month. All of these homes were purchased with the assistance an outstanding, professional Agent that we would highly recommend to anyone. If needed, send me a PM.

Our primary concerns and questions that we have, as an out of state investor is with the property management company that we are using. With this company, all utilities must remain in the property owners name even while tenants are living there and the owners remain responsible for all payments. In addition to their monthly rent, tenants are responsible for also paying all of their utility bills each month through the property management company to reimburse the property owners. 

With regard to utilities, the property company uses a procedure in that if the tenants do not pay their utilities, they call, text, email and post collection notices for any tenant with an accumulation utility balance over $300 to try to push them to pay. Emails are also sent with any balance for utilities balance over $100; but they do not strictly enforce anything until the utility balance is over $500 to prevent any unnecessary evictions or eviction filings. (that is confusing, but is verbatem from an email that i received from the property management company). 

So far this year, we already had one fully completed eviction from one of the Cleveland rentals for not only not paying any rent for a couple of months but also never paying any of their utility bills, that we as owners had to pay in addition to leasing fees, eviction fees and property clean up fees amounting to a loss of several thousands of dollars.  Recently we reviewed our rental portal and we have another rental home being managed at the same company, following in the same path of not paying rent on time and they have also not payed any of their utilities for their first couple of months. 

We are asking if this is a common Property Management practice for collecting payment due for utilities with tenants in the Cleveland area?  

Originally posted by @Mark Dreher :

My wife and I own several SFR rentals in California that are being managed by a third party property management company. In California, our tenants pay all of their own utilities that are placed in their own names at the time of their placement.

This past year we have became out of state investors as well and have purchased six SFR's in Cleveland Ohio suburbs of Maple Heights, Garfield Heights and Euclid and are currently in escrow with three more set to close this month. All of these homes were purchased with the assistance an outstanding, professional Agent that we would highly recommend to anyone. If needed, send me a PM.

Our primary concerns and questions that we have, as an out of state investor is with the property management company that we are using. With this company, all utilities must remain in the property owners name even while tenants are living there and the owners remain responsible for all payments. In addition to their monthly rent, tenants are responsible for also paying all of their utility bills each month through the property management company to reimburse the property owners. 

With regard to utilities, the property company uses a procedure in that if the tenants do not pay their utilities, they call, text, email and post collection notices for any tenant with an accumulation utility balance over $300 to try to push them to pay. Emails are also sent with any balance for utilities balance over $100; but they do not strictly enforce anything until the utility balance is over $500 to prevent any unnecessary evictions or eviction filings. (that is confusing, but is verbatem from an email that i received from the property management company). 

So far this year, we already had one fully completed eviction from one of the Cleveland rentals for not only not paying any rent for a couple of months but also never paying any of their utility bills, that we as owners had to pay in addition to leasing fees, eviction fees and property clean up fees amounting to a loss of several thousands of dollars.  Recently we reviewed our rental portal and we have another rental home being managed at the same company, following in the same path of not paying rent on time and they have also not payed any of their utilities for their first couple of months. 

We are asking if this is a common Property Management practice for collecting payment due for utilities with tenants in the Cleveland area?  

I can't speak for other companies, or what other's experience in Cleveland, but that sounds odd. Especially for SFRs. In MRFs it is a bit more complicated and a lot more falls on the owner's, but in SFRs everything should be on the tenant. It sounds like they are making it more complicated because they want to have control over it. Again, I do not know if this is common practice for others, but I have never heard of it.

That is strange. Around here it seems like most SFR's have tenants pay all utilities, gas and electric are put in the tenant's name and the landlord is not responsible . In the city of akron and many others around here, the water/sewer/trash bill is the responsibility of the property owner regardless of who pays the bill. However the owner can request that the send a paper bill to the property address and an ebill to the owner by request or the owner can sign a form allowing the city to ebill the tenant. You should be able to call or check the website for each city where you own property to determine the water billing requirements.

@Mark Dreher I would find a new PM, especially if this PM firm charges their owners bill collection/bill payment fees.

There's no reason, in the Cleveland area, in SF homes, for gas and electric to be in the owner's name. It's common, and recommended, for owners to keep water & sewer in their names and add a fixed amount to the monthly rent, but gas & electric should always be in the tenant's name unless you're in MF and have a boiler heating the building.

Wow! We thank everyone for their response and find it very interesting. Yes the PM also charges us a five dollar fee for each utility payment that they make and a ten dollar fee if it's for a city rental registration. Does anyone have any PM recommendations that we might consider in the Euclid, Garfield Heights and Maple Heights areas in case we decide to change when our contract is up?

Originally posted by @Mark Dreher :

My wife and I own several SFR rentals in California that are being managed by a third party property management company. In California, our tenants pay all of their own utilities that are placed in their own names at the time of their placement.

This past year we have became out of state investors as well and have purchased six SFR's in Cleveland Ohio suburbs of Maple Heights, Garfield Heights and Euclid and are currently in escrow with three more set to close this month. All of these homes were purchased with the assistance an outstanding, professional Agent that we would highly recommend to anyone. If needed, send me a PM.

Our primary concerns and questions that we have, as an out of state investor is with the property management company that we are using. With this company, all utilities must remain in the property owners name even while tenants are living there and the owners remain responsible for all payments. In addition to their monthly rent, tenants are responsible for also paying all of their utility bills each month through the property management company to reimburse the property owners. 

With regard to utilities, the property company uses a procedure in that if the tenants do not pay their utilities, they call, text, email and post collection notices for any tenant with an accumulation utility balance over $300 to try to push them to pay. Emails are also sent with any balance for utilities balance over $100; but they do not strictly enforce anything until the utility balance is over $500 to prevent any unnecessary evictions or eviction filings. (that is confusing, but is verbatem from an email that i received from the property management company). 

So far this year, we already had one fully completed eviction from one of the Cleveland rentals for not only not paying any rent for a couple of months but also never paying any of their utility bills, that we as owners had to pay in addition to leasing fees, eviction fees and property clean up fees amounting to a loss of several thousands of dollars.  Recently we reviewed our rental portal and we have another rental home being managed at the same company, following in the same path of not paying rent on time and they have also not payed any of their utilities for their first couple of months. 

We are asking if this is a common Property Management practice for collecting payment due for utilities with tenants in the Cleveland area?  

 I feel like I need to take notes to understand what you said. If it takes notes or more likely in this case a pie graph to explain the policy it's a bad policy.

Works best when it's simple. Tenants pay gas & electric. Owner just pays water & sewer as that runs with the land & must remain in the owners name. Simple.

We have a rental in Garfield Heights.  Tenant has electric and gas in their name.  Water and Sewer is in our name, but bills through the PM.  What you described sounds overly complicated and bizarre.

Just to clarify-we do have the sewer/water/trash only in our name which goes through the property manager's office (not electric, gas etc.).  The major issue is the lack of repercussions if the tenants don't pay the sewer/water/trash bills.  They can basically get away with not paying until the bills reach a total of $500.  Once the $500 threshold is met, the bill comes out of their rent.  Now the PM can take action by means of eviction process.    

Originally posted by @Mark Dreher :

Just to clarify-we do have the sewer/water/trash only in our name which goes through the property manager's office (not electric, gas etc.).  The major issue is the lack of repercussions if the tenants don't pay the sewer/water/trash bills.  They can basically get away with not paying until the bills reach a total of $500.  Once the $500 threshold is met, the bill comes out of their rent.  Now the PM can take action by means of eviction process.    

 This is why PM's shouldn't collect water & sewer from the tenant. There is no real recourse.

If tenant is paying $800 in "rent" then paying the PM an average of $100 for H20 you simply charge the tenant $900 in "rent" & owner pays H20. Some months H20 Will be high, some low. So not a perfect system but it's the best available given what we have to work with using Cleveland division of water & adhering to the ORC.

If a tenant comes in to the office & only has $800 you have the staff decline any partial payments & instruct the tenant to pay rent in full or be evicted. None of this outstanding utility balance junk....Simple.

I know in Akron that it is very common for tenants to pay at least electric and gas. Sometimes even paying water, sewer, and trash.  No reason for electric and gas to be in owners name.

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