I closed on a property at the end of April and the tenants had not paid rent for the month.
The property has now changed ownership and the PM shrugged his shoulders and said 'nothing we can do'.
It's $1500, so quite a lot of money. Is my PM accurate that there are no options for me to recover the rent owed?
You need to fire your PM for drooping a ball big time and talk to the tenant yourself, keep things polite and civil, explain the situation and sign a new lease ASAP with New Deposit.
Since the last owner split with the deposit money you may have to play it like they lived last month on that deposit. Now start fresh with you getting new inspection, deposit and rent.
If they don't agree, give them a 5 day notice and prepare for eviction. Start new.
http://dnaumowicz.kw.com/ | IL Agent # 475.170710
Sorry for not clarifying..... I am the SELLER
I bet @Steve Rozenberg would know. He is super strong with property management and has likely experienced collecting rents while transitioning between owners.
Marcia Maynard, Fischer Properties | Podcast Guest on Show #83
@Nat Chan normally the rents are adjusted at closing with an entry on the HUD. Was that not done? Forget the PM and call the new owner. Was this discussed at all before you sold it? There isnt much you can do but hope the buyer does the right thing. Is it worth a lawsuit?
I would assume that the same PM company that you had is the one managing the for the new owner?
My first question is if the tenant did not pay the rent by the lease terms why was the eviction not started? I would take a stab and guess that if the buyer found out that the tenant was getting evicted it would kill the deal, but what happened was the new owner now has a problem because they assumed they were getting a good paying tenant and now they have a problem from day one, a delinquent tenant.
If it is the same PM company then when the tenant does pay rent that money goes to you not the new owner. Even if they paid it in a different month that is still money owed to you.
I would tell the PM company that you are going to file a complaint with the state regulation if they do not get you your money and you find out the new owner received your funds as this is an accounting and potential IRS issue.
But I agree with an earlier post that you should have received this on the HUD along with the security deposit to transfer to the new owner. Did that not happen?
You are definitely in a bad position if you no longer own the property and now the new owner has a deadbeat tenant in there.
Sounds like the PM dropped the ball and I would threaten licensing action on them if it were me.
Originally posted by @Rob Beland :
@Nat Channormally the rents are adjusted at closing with an entry on the HUD. Was that not done? Forget the PM and call the new owner. Was this discussed at all before you sold it? There isnt much you can do but hope the buyer does the right thing. Is it worth a lawsuit?
Thanks Rob, I'll try to get the new owners number to call them. I tend to think they will just fob me off. Unfortunately this amount isn't worth a lawsuit.
I am not sure I understand why this is the new owner's issue...except they may have a bad tenant. Please explain.
You can sue whoever owes you money. If the tenant owed you money while you still owned it, they still owe you money.
If the PM was supposed to collect if for you, you can sue them for not doing so, under breach of contract.
So, file a small claims court action against both of them.
You could also use a landlord collection agency to get the money owed to you from the tenant. Just Google "landlord collection agency" and a few will pop up.
I'd sue them both for the money owed. A judge might not require the PM to pay it, but you can at least get the PMs attention with a small claims court action. If they want to fight it, offer to "settle" with them for the amount of the rent they didn't collect.
I'd do it just to make a point that they can't get away with just dropping the ball like that without a consequence. In fact, did you have to pay the PM any kind of termination fee? Sue them for that, too.
In small claims court, you don't have to know what you're doing. You're not expected to know the law. Worst case scenario, the judge doesn't rule in your favor. But, it can be a very handy way to get someone's attention and get them to settle. I've done this myself. I once had a previous landlord served on Christmas Eve via Federal Express. I did not win that lawsuit, but I was able to at least give them a consequence in that their Christmas was surely affected by a $5,000 lawsuit, when they couldn't call their lawyer or the court for several days.
Yep, I'm not above a little revenge when it's warranted :-)
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