Shady property manager - Need advice on what to do

7 Reply

Ashley Hughes

OP

Investor · Houston, TX · Member since 2017 · 28 posts · 2 votes

4y

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Every story has two sides and it's difficult to give a complete answer when only hearing from you. Here's my thoughts:

1. Why are you talking to the Tenant directly? That always muddies the waters. Tenants are very good at playing you against the PM, ensuring the two of you start fighting while ignoring the Tenant. You hired a PM for a reason; let them handle the Tenant communication.

I spoke with the tenant because she emailed me about a maintenance issue that had been going on for more than a week and the property manager hadnt been responding. I also found out about other things that were not getting done. Things I didn't know about it. So it's always good to get feedback when you can't be there.

2. My agreement is like yours: if a repair is estimated to cost the owner more than $200, then I must notify the owner. If I understand you correctly, the PM determined this repair was a Tenant responsibility. There's no need to contact you because you're not the one paying for it. I do this all the time. When a Tenant moves out and I spend $600 from the security deposit for cleaning and repairs, I don't call the owner because (a) it's not coming out of the owner's pocket and (b) an owner will never reject improvements on someone else's dime.

Yes, he determined it was the tenant's responsibility, so keep me out of it. Don't pull money from the rental assistance funds that's supposed be set aside for past due rent.

3. In my agreement, I keep a percentage of "rent income collected" and that applies whether I collect the rent on the day it's due or six months after it's due. Did you expect the PM to work for free for eight months, successfully collect everything owed, and get no compensation for that?

I think you may have misunderstood what I mentioned above. Yes, he was due the past due rental fees from the missed rents and that's his, but do not pay yourself for Jan-Feb 2022 without discussing it.

4. I'm sure your agreement specifically authorizes him to collect rent payments, deduct his fee, and then send the remainder to you. This is the same process whether he's collecting it on the first day of May or eight months later.

Based on what you've shared, the PM did the right thing by holding the Tenant accountable for the plumbing bill. His hands are tied thanks to the b.s. COVID regulations in place the past two years, but he did the right thing and collected every dime you were owed. The only thing he did wrong was to apply the ERAP (Emergency Rental Assistance Program) payment to the $400 plumbing bill. The ERAP payment was supposed to be applied towards rent, utilities, or late fees; he is not authorized to spend it on anything he wants, whether the Tenant owes it or not. He should have continued pushing the Tenant to pay the $400 plumbing bill, especially after the Tenant has saved eight months of rent payments! If the tenant refuses, he could (a) deduct it from the next rent payment made by the Tenant and then evict for any unpaid rent, or (b) hold the charge until the tenant is out and deduct it from the deposit (not my recommendation).

I think your PM is doing a pretty good job based on what you've shared. I see no grounds for termination.

Thanks for your input.

Bjorn AhlbladPro Member

Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes

4y

@Ashley Hughes I guess I missed something along the way. It strikes me your PM is doing what he/she should be doing about the toilet, and the rent subsidy-which is really above and beyond there your PM did great! I think anyway.

I would never have communicated with the tenant under any circumstances as long as there was a PM involved.

All the best!

Ashley Hughes

OP

Investor · Houston, TX · Member since 2017 · 28 posts · 2 votes

4y

I noticed you and the other guy said the same thing about not talking to the tenant. If you're never talking to the tenant, how do you know the property manager is taking care of things?

Steve Maginnis

Property Manager · Charlotte, NC · Member since 2012 · 135 posts · 156 votes

4y

Hello @Ashley Hughes. Another point to consider is that the toilet issue may have been an emergency repair, due to the flooding. Especially if this was the only toilet in the unit. Your PM agreement may provide that the minimum $200 threshold does not apply for emergencies. In addition, if we have a charge such as this where the tenant is responsible, the owner still pays us for the invoice up front, then we collect from the tenant to reimburse the owner. The PM company should not advance repair costs for the benefit of a client's property. So the fact that they covered the cost is a plus. It does sound to me like your PM is acting appropriately. I also commend them for applying for assistance on behalf of the tenant (and you).

Many, many tenants with otherwise good relationships with the PM may still bad-mouth them when speaking with the owner. It is very common. Oftentimes the reason they may not like the PM is because they are working to benefit you and protect your property! If you do not trust your PM, you can certainly shop for another one, but it sounds like you will be untrusting of any new company (which is normal). I suggest you keep a close eye on the PM. Review your statements, question any repairs for details, ask for original work order requests from the tenant if possible to prove they are valid. You can also request the PM perform inspections of the property. They may be willing to Facetime you while at the property so you can do a virtual tour. As long as your property is being maintained well and the PM numbers add up, it should be easier to start to trust your PM. Best of luck.

Billy Smith

Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes

4y

This is why I do not have a PM, really, I am small fish under 12 S.F.H in an "A" to "B " area. A toilet getting fixed by a phone book plumber would be a BIG cost.

Almost always the toilet over flooding is a tenant issue they tried to flush too much down or fill in the blank, I let them know what they did wrong.

I always tell them call me ASAP about any issue such as this we can work out how this will play out later, keep a ledger date what happened cost etc.…then hold back the cost with the deposit when the leave.

For me I buzz over there look at it, get a plan to fix it or replace then call my handy man who I help that makes his job so much easier quicker and me a better deal.

Now out of town or a BIG fish not an option of course.

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

4y

$600 toilet replacements are just too rich for my blood, too. I will stick with more economical commodes fit for humbler cheeks.

2 Reply

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

4y

Originally posted by @Ashley Hughes:

I noticed you and the other guy said the same thing about not talking to the tenant. If you're never talking to the tenant, how do you know the property manager is taking care of things?

Your tenant called and complained the PM has been unresponsive "for a week" regarding a maintenance issue. You assumed the Tenant was telling you the complete truth, even though she's failed to pay rent for eight months and is refusing to pay for a repair that was her responsibility? What if she reported it to the PM by leaving a voicemail at 4PM on Friday and then she complained to you on Wednesday at 9am? It could feel like a week but it's actually only been two business days. I manage 400 rentals and this happens to me. All. The. Time. What if the Tenant tried to report the maintenance issue by phone and the PM's policy is to have all maintenance requests in writing? What if the PM has already spoken to her about this issue and determined it was not an issue? What if the PM hasn't responded because the Tenant is verbally abusive? You should always talk to your PM to get their side of the story, then work through the PM to resolve the issue. Do not ever agree with your tenant, make promises to your tenant, or even empathise with them. Collect their complaint, then talk to the PM to resolve the situation. If you discover your PM is causing problems or failing to meet your expectations, then put your complaint in writing and try to correct the PM's behavior. If that doesn't work, fire them and find another PM.

EXAMPLES:

1. Landlord was painting house. Tenant struck up a conversation, which is fine. But during the conversation, the Tenant asked if she could have a dog. It's a pet-friendly home, so the Landlord said she could and went back to painting. Six months later, we inspect the property and discover an adult dog, a puppy, a cat, and a lot of damage. The Landlord should have collected their request and (a) told them to contact us, or (b) told us about the Tenant's request. We would have educated the Tenant on what was allowed, required application/screening/approval for each animal, increased rent and/or deposit, denied the puppy or charged a hefty fee due to the increased risk, and the tenant would have to sign an Animal Addendum outlining rules and potential fines.

2. Landlord fixing a minor plumbing issue. Tenant allegedly asks if they could paint the living room. Current paint was tired so Landlord agreed. Six months later we inspect and discover every wall throughout the rental was painted in six different, ugly colors. Baseboard was broken and missing, paint on ceilings/doors/floors, etc. Tenant said the Landlord gave them permission. The Landlord thought they only wanted to paint one room and "assumed" they would use neutral colors. It cost $6,000 to fix this mistake. If the Landlord had referred them to us, we would have created a written agreement stating specifically what they could paint, what color(s) they could use, and what would happen if the job were done improperly.

Tenants are out for themselves. They will often lie to you. Or maybe they think they are honest, but they're giving you bad information because they misunderstood what the PM said. Tenants will try to play you against the PM in the same way a child will play mom against dad.

You can take that to the bank.

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3 Reply

Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

4y

Originally posted by @Billy Smith:

This is why I do not have a PM, really, I am small fish under 12 S.F.H in an "A" to "B " area. A toilet getting fixed by a phone book plumber would be a BIG cost.

Almost always the toilet over flooding is a tenant issue they tried to flush too much down or fill in the blank, I let them know what they did wrong.

I always tell them call me ASAP about any issue such as this we can work out how this will play out later, keep a ledger date what happened cost etc.…then hold back the cost with the deposit when the leave.

For me I buzz over there look at it, get a plan to fix it or replace then call my handy man who I help that makes his job so much easier quicker and me a better deal.

Now out of town or a BIG fish not an option of course.

It's a broken toilet and flooding. When sewage floods, it typically requires a professional to mitigate. I'm sure you could save money, but the toilet would still cost you $125, cleaning the water could cost you another $200 (if you even have the proper equipment), and I suspect your time is worth $30 an hour so that's another $100. So you saved $150 - $200 but you may have done the job improperly and you missed an evening with your kids.

I can't tell you how many times I've had to hire a professional to fix the problem that was already "fixed" by a Landlord, or the number of Tenants that left because the Landlord was slow to respond, refused to fix things, or fixed things improperly and caused more problems.

I'm not accusing you of this, but it's far more common than you probably imagine.

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Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

4y

Originally posted by @Ashley Hughes:

I own a duplex and I have a property manager because I live out of state. Last January I had a call with my tenant to ask her some questions about her unit. We chatted about that and then she goes on to tell me that my property manager had been harassing her about paying for a broken toilet. She showed me a letter where the property manager was demanding that she pay a remaining balance of $400. She had already paid $200 according to the letter. At this point I was confused because I wasn't aware that the toilet had been broken. In my contract with the property manager, any repair requests over $200 needed landlord approval or if it's an emergency, the property manager must let the landlord know within a reasonable amount of time. This particular letter that the tenant showed me, had me CCed as a recipient, but I never received a notification from the property manager that this incident took place. This conversation with my tenant took place in January 2021 and the property manager had sent the letter to the tenant in December 2020. I found out the actual incident (broken toilet and flooding) happened in June 2020 and that it costed $600 for the toilet replacement and whatever flooding happened. I told the property manager that since he made an agreement with the tenant--to pay--without notifying me about the incident that was over $200, it was up to them to work that out and none of the rental payments would go towards the money he put up front to pay for the incident. I told the property manager that the tenant sent me picture of the letter. I asked him why he didn't tell me about the incident and CC'ed me in the letter without my knowledge. His reply was "I wanted to scare her (the tenant) into paying and I knew if I put the landlord (my name) on the letter, she would do it." After some back and forth of discussing the wrong of this situation, the property manager said he would eat the cost. Fast forward to December 2021. The same tenant stopped paying her rent from May - December, so the property manager took upon himself to do a rental assistance application and we were able to get her missed payment and additional payment to February 2022. The check came directly to his property management company. Not only did he deduct the $400 the tenant owed him, but he also deducted his property management fees from December until February 2022 out of the rental assistance funds.

I want to cut ties with him immediately. Is this incident a true breach in the contract with grounds to fire him and terminate the contract?

See excerpt from contract around repairs.

Let me know how you think I could or should handle this.

So do you expect the Property Manager to work for free?

[email protected]248-209-6824

Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

4y

@Ashley Hughes

We agree with all the responses here.

The PMC did make a mistake, in our opinion, by not updating the owner about the toilet issue - even if they were going after the tenant to pay it. It didn't require the owner's specific approval since not having a toilet is an emergency.

Regarding your comment, "Yes, he was due the past due rental fees from the missed rents and that's his, but do not pay yourself for Jan-Feb 2022 without discussing it."

-What is there to discuss? The management contract states what happens!

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