General Landlording & Rental Properties

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Joel Santana
  • Rental Property Investor
  • San Diego, CA
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Advise needed- Tenant is paying Property management but....

Joel Santana
  • Rental Property Investor
  • San Diego, CA
Posted Sep 21 2022, 12:46

I live in California and have a SFR in Moline Illinois.

As caption stated, my tenant is paying my property management on time, but my property management is not disbursing the payment to my account on the agreed date. They have fallen one payment behind and keep blaming "accounting issues" as the reason. This has occurred for 3 consecutive months now.

Easy street Property Management is absolute garbage. I blame myself for not doing enough research into this company. After doing some digging, they are notorious for this exact thing, and have had dealings with fraud in the past. 

I have already reached out to another property manager and will work on leaving easy street.

Should I contact my tenant directly and tell them to stop paying property management? 

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John Warren
  • Real Estate Broker
  • Chicago
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John Warren
  • Real Estate Broker
  • Chicago
Replied Sep 22 2022, 03:55

@Joel Santana the first thing I would do is find a competent, local real estate attorney to help you out on this one. The second thing I would do since this is in Illinois, is reach out to IDFPR and file a complaint. All property managers have to be licensed brokers and there is a managing broker that is in charge of the brokerage. This will put a lot of pressure on them. 

In regards to your tenants, this is going to be confusing and messy. I would imagine a better PM company can help with this, but this is a hands-on situation. The tenants will be confused and likely won't trust what's going on for a bit. You might consider immediately firing the bad PM company and booking a flight to get the place in hand before you pass it off to a new company. 

  • Real Estate Agent IL (#475.166619)

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Sep 22 2022, 06:01
Quote from @Joel Santana:

You should read your PM Agreement to see what it says about the termination process. They may have a penalty. 

I recommend giving them written notice of 30 days or whatever your agreement requires. Be very clear that they've violated the terms by failing to pay on time, so there should be no penalty for termination. Also be very clear about what they are to transfer to you or the new PM (lease agreements, payment history of tenants, spare keys, etc.)

  • Property Manager Wyoming (#12599)

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Drew Sygit#1 Classifieds Contributor
  • Property Manager
  • Birmingham, MI
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Drew Sygit#1 Classifieds Contributor
  • Property Manager
  • Birmingham, MI
Replied Sep 26 2022, 07:16

@Joel Santana we tell clients transistioning to us, to copy us on the termination email and to let previous PMC know we are taking over.

Then we keep the owner copied on all corrrespondence with the previous PMC, so they can see if they are stailling or playing other games.

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Replied Sep 26 2022, 07:33

I'd ask them how they can be having accounting issues that last 3 months and how in that time, they can't get things sorted and do a 'double' payment to get you caught up.

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Simon W.
  • Accountant
  • Lehigh Valley PA & New York City
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Simon W.
  • Accountant
  • Lehigh Valley PA & New York City
Replied Sep 26 2022, 12:51

Sounds like they are using your funds to fund themselves or something bad. They love to blame the accounting department for everything because it is easier than saying "I don't have your money."

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Melanie Thomas
  • Real Estate Broker
  • San Antonio
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Melanie Thomas
  • Real Estate Broker
  • San Antonio
Replied Sep 26 2022, 13:05

Hello,

Sorry you are having to deal with this. I would read the termination clause in your PMA and make sure you understand your obligations and the PM. Formally give your notice to your PM and do not contact your current tenants. Let the PM update the tenants as needed. Once the new PM is identified, they will also reach out. Let the PM's take the stress of dealing with the tenants. You have enough on your plate. Happy Investing, good luck! :)