Property Manager is threatening illegal actions over lease break

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Property Manager is threatening illegal actions over lease break

Brenna Sullivan
Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote

Help please!

 My mom is renting a home in Madison County, AL. She is in a one-year lease. However, the option to purchase a home was made unexpectedly available to her, and she jumped on it. So now we're dealing with a lease-break situation. The leased home is currently almost completely cleaned out and cleaned. 

There is nothing in her lease about breaking a lease. In the Alabama Uniform Landlord and Tenant Act, the lease break stipulations are that the renter is required to continue payment until the property is re-rented, and the landlord is required to put in a good faith effort to re-rent the property quickly. Her property manager is stating that she is required to give a 60-day notice and that she must pay 2 months additional rent as a lease-break fine. In a spirit of good faith, she agreed to pay the rent through December 12th (60 days), but has not and will not agree to pay the additional two months rent unless the property does not re-rent. We have stated this to her property manager repeatedly in e-mails that he is refusing to reply to, we have mailed him printed copies of those e-mails via certified mail and dropped them off at his office. He is refusing to communicate via anything but phone calls.

We have listed the home for rent on Craigslist, and her PM company has listed it as well. They have both had lots of interest and two filled out applications. However her Property manager is telling people that the home is unavailable until December 23rd (it could be ready in about 2 days from now), and he called my mom today and told her that he has an approved applicant, but if she doesn't pay the two months rent then he will "send them elsewhere" and reject future applicants, forcing her to pay the two month's rent because the home is unrented. 

Obviously, this is illegal, but we have no idea what to do. It's just her word against his, as he will only communicate via phone. She has kept detailed lists of all communication between them, but they're just her own lists of what he said via the phone. Nothing we can prove. 

Any suggestions on how to proceed? My mom has been exceedingly kind, trying to re-rent the home as quickly as possible, cleaning it thoroughly, apologizing for the inconvenience, etc.. The property owner would not be out any money if the Property Manager would just allow these applicants to move in. 

*I can post the e-mails we have sent, if it will help. 

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Dawn BrenengenBusiness Member
Moderator
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
9y

What a piece of work! How are the companies' online reviews?  If they are good, I'd go ahead and write a bad one.  If they are already bad, then they probably don't care.  

I don't ever say this lightly, but I would enlist a lawyer.  It sounds like your Landlord Tenant laws are similar to those in my state, and this would not fly at all.  

Also, if the PM firm is a licensed real estate agency, which they should be, then you can also file a complaint with the real estate commission.  Actually, this is the first thing I would do.  

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    9y

    Simply document everything you can, emails are fine.....then just move on.  If he actually sues you, deal  with it then, which is highly unlikely, since you'd likely prevail.  Some things aren't worth losing sleep over.

    0Reply
  • Dawn BrenengenBusiness Member
    Moderator
    Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
    9y

    What a piece of work! How are the companies' online reviews?  If they are good, I'd go ahead and write a bad one.  If they are already bad, then they probably don't care.  

    I don't ever say this lightly, but I would enlist a lawyer.  It sounds like your Landlord Tenant laws are similar to those in my state, and this would not fly at all.  

    Also, if the PM firm is a licensed real estate agency, which they should be, then you can also file a complaint with the real estate commission.  Actually, this is the first thing I would do.  

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  • Stan Lebo
    Brooklyn, NY · Member since 2016 · 20 posts · 1 vote
    9y
    What is the name of the company. Should let other investors know about them.
    0Reply
  • Chris K.Pro Member
    Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
    9y

    I completely agree with @Wayne Brooks this is not something i'd lose an ounce of sleep over. If you've tried to do the right thing and they are refusing to work with you then I'd just be like "oh well" and wait to figure it out in court. 

    0Reply
  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    There is a very active legal services group in Madison County. I do not know their official  name or contact number, but you can probably find them on Google, or by asking some of the clerks at the court house. Your mother should not wait to be sued, which will hurt her credit. That trickles down to also cause increased auto insurance premiums, homeowners insurance rates, and credit card interest rates.

    That being said, have you read the entire lease very carefully? There might have been an automatic renewal clause unless certain notice was given. Automatic renewal clauses are enforceable in Alabama.  If her lease automatically renewed for another year, then the landlord might be doing her a favor by letting her cancel on 60 days notice, instead of holding her to the entire renewal term.  Or, her original lease term several years ago might have renewed on a month to month basis, with a requirement for 60 days notice to terminate.  It all goes back to the lease.

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    9y

    And, following Denise's advice first, if it then defaults to paying rents until a new tenant can be found in good faith, don't pay anything until you know when that date is. Read the lease carefully!

    Another point, some leases incorporate a landlord policy, this can be adopted, changed and modify a lease in cases where notice of changes might be made, adopted if not contested, if that is the case ask to see all policies and changes during the term of her lease, request it in writing. 

    Search for your legal aid office, a local attorney is your best bet. :)

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  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    9y

    Did I understand your comment correctly?  Your mom vacating the property, leaving it in good shape, and  is paying through December 23 (60 day notice).  But if she does not pay an extra two months (after Dec 23 as a fine) the property manager will refuse to allow a qualified tenant to possess the property on or about December 24?   If so, I would document that conversation carefully.  Sounds like the Property Manager is delving into a totally different area of law.  They have an obligation to mitigate loss when a lease is terminated early. And it also doesn't make sense that a PM would turn down good money from a qualified tenant if the property is available. That is a disservice to the property owner.

    But I would agree with Denise and others.  It all comes down to language in your lease. And it sounds like that may eventually be a decision for a court.  If possible it might be better to pay the extra two months, and then attempt to recover that later.  I would assume if the property is re let to a new tenant, your mom should get a partial refund.  If you have evidence they refused to lease to a qualified new tenant, then a court might also make a ruling in her favor.  This is one of those cases where you pick your fights carefully.

    1Reply
  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    @Dawn Brenengen They actually have no online reviews at all, on google or yelp anyway. That might be something to change :) And based I think will have my mother contact legal services, thank you for the recommendation. 

    @Denise Evans Thank you for the information about the Madison County legal services group. I'll look them up. And it's very good to know about the downstream consequences of being sued. 

       I have read her lease in it's entirety and there is not an automatic renewal, and the term of her first/original lease is not yet up. There is nothing at all in the lease regarding a lease break. 

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  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    @Brad Sanford you are understanding correctly, except that her 60-day notice is up on December 12th, and the house is nearly ready to re-lease now, and she has told the PM that she would be happy to allow him to re-lease the property prior to December 12th, while still paying through December 12th, in order to mitigate the loss to the property owner. I have no idea why he stated it would not be ready until December 23rd.

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  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    @Brenna Sullivan, just because someone makes their living as a property manager does not mean they know they law. Don't be intimidated and think that he perhaps knows something you do not know.  I recently attended a seminar by a property manager (because I like to check out my seminar competition) with over 30 years of experience, whose brother is an attorney and gave him advice on property management, and a LOT of what he was telling people was absolutely wrong from a legal standpoint. I was appalled.  

    I agree with @Brad Sanford that, if possible, your mom should pay the money in order to protect her credit. She should accompany the check with a letter saying that payment is with full reservation of rights and not an accord and satisfaction.

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  • Phil Earley
    Property Manager · Cumming, GA · Member since 2015 · 261 posts · 199 votes
    9y

    Jumping on a deal for personal gain is great but not at the expense of someone else.  Not working out the details of the termination prior to the purchase is where this went wrong.   Communication is key to every relationship.    

    1Reply
  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    @Phil Earley I understand the sentiment, however, she knew that this location would rent extremely quickly, has left the place in better condition that she rented it in, and the PM refused to answer phone calls or e-mails that she sent prior to purchasing the home, in which she attempted to open a dialogue about this. And as I stated, he has continued to refuse to answer e-mails since she sent him her notice, he has not returned phone calls, and has only called her once, yesterday, when he illegally threatened her.

    She was able to purchase the home due to an extremely large down-payment gift that was offered by family that, due to their health, would not be guaranteed by the time her lease was ended, so she could not wait. Further, she has listed the home herself, held showings, and has provided the PM at least one applicant in the one-week that it has been listed so far.

    Beyond that, she has gone over and above what is required by Alabama law. In Alabama (unless otherwise specified by the lease) you are not required to give any notice of vacating the property, you are simply required to pay the lease until the property is re-rented. She is paying a 60-day notice, which is almost 30 days beyond the amount of time she is occupying the property, while being perfectly happy to have them go ahead and move renters in. She has done everything she can to make this transition easy and to negate any financial hardship on the property owners and manager. Literally all they have to do is let the new people sign the lease. 

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  • Christy Harris
    Investor · Huntsville, AL · Member since 2014 · 108 posts · 50 votes
    9y

    Is there any language in the lease prohibiting a sub-lease?  If she has already found a tenant, that could be a win-win option for all?

    1Reply
  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    @Christy Harris I cannot remember- I will check and get back to you.

    0Reply
  • Michael Gravois
    Investor · Daphne, AL · Member since 2014 · 5 posts · 2 votes
    9y

    Property managers acting like this get my blood boiling.

    It seems like you have researched the law and several people have told you about Alabama law.  Whether you and the other people are right or not, is irrelevant.  You need to talk to an attorney and listen to their advice even though it will probably be pretty much what you and others have said.  This will help them prepare a case.

    There are some excellent attorneys in Huntsville.  They may want a small fee to write a letter but hopefully you can get someone to take it on a contingency basis.

    Before retaining an attorney, you may want to ask them about filing a complaint with the Alabama Real Estate Commission and any other regulatory agency that might regulate the landlord.  Some attorneys don't like to or allow you to file administrative complaints.

    Also, ask them about deposits.  Alabama law can be a bit draconian about deposits but there are strict provisions to follow.

    Alabama is a one party consent state as to recording telephone calls.  However, you should ask the attorney about this because there can sometimes be issues about recording calls without consent of both parties.

    Good luck.

    0Reply
  • Dale Walker
    Investor · Rigby, ID · Member since 2016 · 52 posts · 45 votes
    9y

    I would consult an attorney and have them send the management company a certified letter. That letter would detail that I had moved out (on a specific date ) and the keys are on the counter. Second, that I would be responsible for any loss until the end of the lease until a new renter can be found. I would detail that approved applicants have been found on a specific date.  If two months penalty is not in the lease, then you have no obligation to pay it. Your obligation is to pay the rent each month by a certain date. If the PM company wants a re-rent fee, they should put it in the lease as a cost of breach. 

    Third, I would document that any claim toward my credit would be a cause of action against their company as it is their responsibility to mitigate their losses and they chose not to act promptly.  

    If they sue you, you will have this documentation and representation. If they claim against your credit, you may have cause to get damages from them. 

    I suspect a letter from a lawyer which outlines these issues, will prevent them from a foolish action of attacking your credit or suing you.  It may motivate them into getting it re-rented ASAP. Read your lease carefully though. You will be responsible for their losses as long as they are trying to get their apartment re-rented in a reasonable amount of time.

    0Reply
  • Karl B.
    Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    You've received good answers. Tell the PM you'll leave negative reviews. Also, document everything (mentioned by others) including detailed photos and video of the property when you vacate. DETAILED. 

    The fact the PM refuses to correspond VIA e-mail is shady.

    Also, hiring a lawyer is an option as he/she will advise you and will show the PM you're not messing around. And mention to the PM they can pay your lawyer fees when they lose the lawsuit as well.

    Also, if there's any oversite in your area for the PM contact them. And the BBB. The more you show this PM bully you're not messing around the more seriously they will take you. From the sound of it you and your mom are nice people and the PMs are likely trying to milk extra money out of you. 

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  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    What the rent amount? what's an attorney fee gonna cost?

    If she did a lease buyout / lease break and the cost was equal to 2 months rent, then that's a penalty fee break lease fee and she could vacate the day she hands in the keys and has paid the 2 months fee to do that.  

    YOU don't get any compensation back for rent in a lease break fee. If they rent the apartment again within a day or anytime in the next 60 days, It's a penalty for not living up to the terms of the contract. 

    Check your state tenant laws you stated : 
    Alabama laws are,, 

    "the lease break stipulations are that the renter is required to continue payment until the property is re-rented, and the landlord is required to put in a good faith effort to re-rent the property quickly."

    Quickly is vague,, your mom could be liable for the rent till the end of the lease if PM doesn't get qualified tenants, and who gauges how quick is quick?? 

    Pay the 2 months fee. get out and get it over. YOUR mom bailed and now is unhappy with the consequences. the property manager is doing what is expected.  

    1Reply
  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    I'm sorry, I misunderstood. I thought the lease expired at the end of December. When does the lease expire, according to the normal term stated in the lease?

    0Reply
  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    So follow up:

      Today the PM called me (I am not on the account, he should not have been speaking to me about my mother's accounts, but he did). 

      He *literally* said that he is not responding to e-mails because he "cannot put in writing things he is not supposed to be doing". Literally, not kidding. 0_0  I asked what it was he is not supposed to be doing, and he informed me (in a conspiratorial manner) that he is trying to move mom out (and requiring the 60 day notice and 2 additional month's payment), and a new tenant in, WITHOUT TELLING THE PROPERTY OWNERS, in order to "keep your mother out of trouble". Which means he intends to keep that "lease break fine". 

      He confirmed that he does have an approved renter, but that he doesn't want to let them move in until mom has "paid in full". 

       Further, when I told him that her lease says absolutely nothing about a 60-day notice or a two month's rent fine, and that under Alabama Law she is not required to pay it, he became very agitated. He told me to call the Alabama Real Estate Commission and speak to "one of the state's attorney's and listen to what they tell you. If you won't take *my* word for it, maybe you'll take a top attorney's word!" So I did. I called AREC and I actually *did* speak to one of the attorneys there, and she told me she wouldn't pay a dime of that lease-break fine, and that he has no case in court as there in nothing in the lease about it, and that my mom has done far more than is required by law, AND that she advises contacting the property owners and advising them of what is taking place. 

    ***   So that is where we currently stand. However, I do have one more question for you all: I cannot find record of this business being licensed in any of the three states he claims to be registered in. A search of the business name and his name on the Secretary of State's websites for all three states turns up nothing. What are the ramifications of this? Can I report him? Am I missing a way to search for business entities? ***

    Thank you all very very much for your help and encouragement. To respond directly to a few of you: @Christy Harris, the lease does prohibit subletting. @Dale Walker, @Karl B., thank you both for the advice. I am having a paralegal (and dear friend) draft a legally formatted letter and I've passed along your advise. After speaking with the AREC attorney today, I feel like the ball will be in his court as far as legal action goes. As soon as the keys are handed over, we will be reporting to every agency we can find, and further if it turns out that he is not registered with the states that he is working in. @Denise Evans her lease expires in June. 

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  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    9y

    It sounds like you have done the proper research.  If the guy is acting like a property manager, and representing the he was hired to work for the property owner as a paid agent, he might need to have a state license, or at least some type of certification, to do that.  From my experience, Alabama law is sometimes ambiguous as to exactly who can be a property manager (for pay).  It may be that anything this PM does is as an agent of the property owner, so that could end up being a bad situation for the owner.  

    Since I own rental property in Madison County, and I am considering hiring a property manager, I don't see any reason why you couldn't refer this upstanding individual to all your friends at bigger pockets and other investor sites.  I am sure this guy would appreciate your recommendation to other property owners  as to how he try's very hard to keep "tenants out of trouble" while not bothering to inform the property owners of situations that could possible end with both of them in a courtroom.   *Of course, sometimes you have to see a little humor in things to make the ordinary challenges of the rental business a little less frustrating.

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  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    9y

    Sounds to me that this PM doesn't like the owner to know how he works. 

    I would find out who the owner is and write a letter to both, returned receipt, stating all of the things that your mother has done to make up for her breaking the lease, as well as legal remedies etc. 

    How often do we hear turnkey investors talk about shady PMs that did stuff behind their back and they didn't find out until it was too late. Wouldn't you want to know, if your PM is doing things that are shady? Maybe that 'lease breaking fee' wouldn't go to the owner, but into the PM's pockets?

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  • Brenna Sullivan
    OP
    Investor · Huntsville , AL · Member since 2015 · 17 posts · 1 vote
    9y

    Ugh, this ridiculousness never ends. Apparently the PM was not telling the truth about not telling the owner. 

     Her rent is paid through the end of November. The house was almost completely cleaned out, only her cleaning supplies and vaccuum cleaner left inside, and some personal belongings and trash items in the garage. We were there on Wednesday, and went back to clean the garage and get the few remaining items yesterday. 

    Apparently they had someone come in and clean (without giving mom notice or asking permission), and they took almost all of the remaining items out of the garage. It was swept clean, but the personal belongings were taken. We finished cleaning the last bit of the home (replacing stove burner pans, etc), left the heat on and water dripping, as it is supposed to get very cold.      

      She actually received an email from the owner last night saying that they went to the house yesterday (apparently before we got there, again without notice or permission), and the garage door was left open (which would have been from their cleaning person) and the house was mostly empty aside from the garage. The owner stated that as such, they "took possession of the abandoned home and changed the locks, etc." HER RENT IS PAID THROUGH NOVEMBER. She hadn't abandoned the property, she's been there every day except for Thursday, and has only been sleeping at the new place for 8 days! You just can't do this crap! I'm so beyond frustrated. 

      If anyone would like to know the name of the Property Management company, please private message me. @Brad Sanford , since you asked I will go ahead and pm you. 

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  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    9y

    Is the power still on in your moms name as of today??

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  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    If her lease expires in June, then the landlord is giving her the ability to buy out of her lease for less than the full rent for the remaining term. If she buys out of the lease, then the landlord can re-rent it the next day and keep the money. Or it can stay vacant for 6 months, and it does not affect her.  Under the circumstances, I think it is a good thing to pay the 2 months rent and buy out of the lease. She is getting the certainty of being off the hook. The landlord is taking the risk of re-renting it within the two months or maybe not.  This is a good deal for everybody.

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