Haven't received rent/statements from PROPERTY MANAGER in MONTHS!

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Haven't received rent/statements from PROPERTY MANAGER in MONTHS!

Nelson J Castillo
Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes

Good morning all!

I have a bit of a problem regarding the property management for my section 8 duplex in St. Pete, FL. I have had this property for a little over a year and while it does cash flow well for me, I have had issues with my property manager. This being my first property, I decided to keep the previous owner's property manager for the sake of continuity. BIG MISTAKE! She has not been very responsive and although I ended up receiving the rent/statements from her throughout most of the past year, I usually received everything late (not because the tenants were late on rent but because she is incompetent). Well, I have now not received anything from her since April. I obviously decided to change my property management, however my current "property manager" has not been able to schedule a walk through for the new management team. I have been trying to make this change for over a month. I have reached out many times (daily, through email, text, phone call) to her and I rarely get a response (usually a vague response like "i'll send it today" or "i'll be in touch with the new property manager"). 

I now know how important due diligence when selecting a property manager is. I need help figuring out what actions to take at this point. Is there legal action I could take to get the rent that I am owed? Thanks in advance!

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y

PM's are licensed by the state a saber rattling e mail about filing a complaint with the department of real estate for withholding your rent or not turning over your leases etc.. will usually get them off the dime.

be aware changing managers usually cost you money as tenants will now want all sorts of reparis etc etc .

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Time for you to make a onsite owner inspection. This is necessary when turning over PMs if you are serious about your responsibilities regarding managing a PM.

    Set up the inspection yourself and inform your present PM of the timing. Be there to supervise.

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    PM's are licensed by the state a saber rattling e mail about filing a complaint with the department of real estate for withholding your rent or not turning over your leases etc.. will usually get them off the dime.

    be aware changing managers usually cost you money as tenants will now want all sorts of reparis etc etc .

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Deshawn Lewis
    DHS/Investor · Bowie, MD · Member since 2015 · 149 posts · 65 votes
    9y

    As stated above I think you HAVE to do an on-site inspection. Sometimes you have to be physically there to get their attention and best results. It's easy to dodge a call or text but when you are actually there that help the communication a lot. 

    1Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @Thomas S.:

    Time for you to make a onsite owner inspection. This is necessary when turning over PMs if you are serious about your responsibilities regarding managing a PM.

    Set up the inspection yourself and inform your present PM of the timing. Be there to supervise.

    Thank you for the suggestion, Thomas! This is a good option. I will reach out to her, hope she gets the message since responsiveness has been an issue. 

    0Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @Jay Hinrichs:

    PM's are licensed by the state a saber rattling e mail about filing a complaint with the department of real estate for withholding your rent or not turning over your leases etc.. will usually get them off the dime.

    be aware changing managers usually cost you money as tenants will now want all sorts of reparis etc etc .

     Thanks, Jay! I tried putting off changing managers for a while even though I was unhappy with the results. Although it may cost me money in the short term, I will be better off long term (I hope). 

    I have sent her all sorts of emails, but I haven't threatened with filing a complaint with the department of real estate. Think that will be my next step before scheduling an on site inspection.

    0Reply
  • Laticia Braxton
    Real Estate Consultant · Joppa, MD · Member since 2015 · 218 posts · 178 votes
    9y

    Unfortunately, some states don't require a PM to be licensed (MD, where I am, is one of them) so you have anyone with a computer and basic bookkeeping skills assuming they are qualified to manage a property. If you are in a state that does require a license, go directly to the Dept. of Labor & Licensing. 

    If not, I would tell you to start with sending the PM a CERTIFIED letter, advising her that you are hiring an attorney since she has failed to provide you with the information you requested.  Then, contact the BBB in your area to ask if that company is registered and file a complaint. After having received the letter, she should contact you immediately, assuming she has a brain.

    Make sure you get ALL of your records from her and even though it may be costly, I would also suggest re-keying all locks on your units (assuming she had copies of keys). Advise your tenants that you are changing management companies and changing locks as a result, for security purposes. Protect yourself and your tenants as best you can from any future retaliation.  This may sound extreme to some, but you clearly are not dealing with a real professional.

    Best of luck to you!

    4Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @Laticia Braxton:

    Unfortunately, some states don't require a PM to be licensed (MD, where I am, is one of them) so you have anyone with a computer and basic bookkeeping skills assuming they are qualified to manage a property. If you are in a state that does require a license, go directly to the Dept. of Labor & Licensing. 

    If not, I would tell you to start with sending the PM a CERTIFIED letter, advising her that you are hiring an attorney since she has failed to provide you with the information you requested.  Then, contact the BBB in your area to ask if that company is registered and file a complaint. After having received the letter, she should contact you immediately, assuming she has a brain.

    Make sure you get ALL of your records from her and even though it may be costly, I would also suggest re-keying all locks on your units (assuming she had copies of keys). Advise your tenants that you are changing management companies and changing locks as a result, for security purposes. Protect yourself and your tenants as best you can from any future retaliation.  This may sound extreme to some, but you clearly are not dealing with a real professional.

    Best of luck to you!

     Thank you for the advice, Laticia!

    0Reply
  • Laticia Braxton
    Real Estate Consultant · Joppa, MD · Member since 2015 · 218 posts · 178 votes
    9y

    Anytime @Nelson J Castillo!

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Nelson J Castillo:
    Originally posted by @Laticia Braxton:

    Unfortunately, some states don't require a PM to be licensed (MD, where I am, is one of them) so you have anyone with a computer and basic bookkeeping skills assuming they are qualified to manage a property. If you are in a state that does require a license, go directly to the Dept. of Labor & Licensing. 

    If not, I would tell you to start with sending the PM a CERTIFIED letter, advising her that you are hiring an attorney since she has failed to provide you with the information you requested.  Then, contact the BBB in your area to ask if that company is registered and file a complaint. After having received the letter, she should contact you immediately, assuming she has a brain.

    Make sure you get ALL of your records from her and even though it may be costly, I would also suggest re-keying all locks on your units (assuming she had copies of keys). Advise your tenants that you are changing management companies and changing locks as a result, for security purposes. Protect yourself and your tenants as best you can from any future retaliation.  This may sound extreme to some, but you clearly are not dealing with a real professional.

    Best of luck to you!

     Thank you for the advice, Laticia!

     Just be prepared to follow through with any threat you make. You have let her get away with being unresponsive for months, so she is probably thinking you are a push over. I would try other communication methods such as phone and text. Block your number or try calling from a different phone number. 

    This problem is your own doing by not properly managing the PM. Going forward you must make sure the PM is depositing your money within the contracted time. Let them know up front even one day late and you will find a new PM. 

    1Reply
  • Victor Gutierrez
    Rental Property Investor · Pawtucket, RI · Member since 2017 · 47 posts · 37 votes
    9y
    Nelson J Castillo how far are you from the property, could you try to self manage, until you can take fully control of the situation. A good property manager is really hard to get but next time that you're going to hire one make sure that you ask them for reference and proof of the portafolio they manage.
    0Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @Victor Gutierrez:

    Nelson J Castillo how far are you from the property, could you try to self manage, until you can take fully control of the situation. A good property manager is really hard to get but next time that you're going to hire one make sure that you ask them for reference and proof of the portafolio they manage.

     I currently live 30+ miles away and I already have a new property manager lined up which I properly vetted. It's just a matter of transferring the management and receiving funds owed.

    0Reply
  • Adam M.
    Lawrence, KS · Member since 2017 · 175 posts · 51 votes
    9y

    @Nelson J Castillo What does the cancellation clause in your contract say? You may have to provide written notice of cancellation. Make you do all the steps properly and have an attorney help you. They might come back w/ a break of contract suit if done incorrectly.

    0Reply
  • David Faulkner
    Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    9y

    Yep ... time to send them a statement. A demand letter for rental income owed + a 30 day notice that you will be terminating the management agreement and transitioning to new management. Every single time I've made threats in an attempt to give a PM another chance I have come to regret it. Fire them and move on ... think back on your screening process to see if there were any red flags you could've picked up on ahead of time and apply them to your next PM. Always have a back up PM identified BEFORE you need them, for this very reason. Good luck.

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Nelson J Castillo If you have someone new lined up, I'd next-day FedEx a letter demanding your keys back within 48 hrs and providing notification that your (hopefully) written agreement is terminated due to _______. You might have to give her notice of your intent to terminate, so check your contract, but I'd imagine her actions will allow you to terminate immediately as she has essential abandoned her responsibilities. You don't need her for a walk-through, you just need your asset back in your control. Your new PM should have a letter you can sign to inform the tenants of the new manager.

    Once that new manager is control, send a letter demanding the rent be immediately deposited or you'll file suit. Then actually do so, you've got a good case, and if she has assets you can collect against I'd hire an attorney. Irregardless of how any of this plays out, file a complaint with the real estate board. If your state has an indemnity fund you might be able to get paid out of that if she refuses to transfer the rent to you. And even if you don't, its my opinion that you file the complaint anyway to flush out folks like this.

    0Reply
  • Robert GilstrapPro Member
    Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
    9y

    @Nelson J Castillo you're causing part of your own problem here by not jumping on things when they appear out of whack. The millisecond you don't get money/statements from someone who's main job is to pay you money and provide you with statements you get them on the phone and/or drive to their office if need be and find out whats going on. No response within a reasonable amount of time? Then you terminate their agency and notify them of their breach of the agreement. 

    No resolution within the time period described in your mgmt agreement = filing with Florida Division of Real Estate and a suit in local court. Do what you threaten to do and stop sitting back thinking things will just get better on their own (because they won't).  

    You didn't mention this but are you dealing with an agent who is managing your property or the broker? If an agent who is unresponsive all you need do is pick up the phone and contact the broker he/she works for and I assure you that action will occur in short order since the broker is on the hook for the agents actions.

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    0Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @Robert Gilstrap:

    @Nelson J Castillo you're causing part of your own problem here by not jumping on things when they appear out of whack. The millisecond you don't get money/statements from someone who's main job is to pay you money and provide you with statements you get them on the phone and/or drive to their office if need be and find out whats going on. No response within a reasonable amount of time? Then you terminate their agency and notify them of their breach of the agreement. 

    No resolution within the time period described in your mgmt agreement = filing with Florida Division of Real Estate and a suit in local court. Do what you threaten to do and stop sitting back thinking things will just get better on their own (because they won't).  

    You didn't mention this but are you dealing with an agent who is managing your property or the broker? If an agent who is unresponsive all you need do is pick up the phone and contact the broker he/she works for and I assure you that action will occur in short order since the broker is on the hook for the agents actions.

     Robert, you are absolutely correct. This issue is self inflicted and could have been avoided altogether. Lesson defintely learned.

    I am dealing with the broker. I am filing a complaint with the Florida Division of Business and Professional Regulation this morning and will contact an attorney about this matter.

    Thanks for the advice!

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    http://www.myfloridalicense.com/dbpr/re/documents/re-2200-1.pdf

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Nelson J Castillo , does the current PM have an office? If so, I would march right down there and demand that she come with you to the property, do a walk through and turn over every single document she has. Does she hav e a boss? If so, raise holy h*** with the boss.

    This is unacceptable. I won't jump on and give you more blame, you already know you need to make the change. Dedicate a day to getting your things back from her. If she has a real estate license, make the formal complaint anyway. It does nobody any good to not file a complaint against her. If you have documentation, you should send it with the complaint.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    @Mindy Jensen

    The link I provided is to file a complaint with DBPR. This is unacceptable for any licensee to operate this way. If the allegations are true, the licensee could face fines, suspension, and even revocation of license. 

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    @Nelson J Castillo

    Do they answer their phone? Are you sure they didn't skip with your funds. It happens.

    0Reply
  • Nelson J Castillo
    OP
    Investor · Valrico, FL · Member since 2015 · 23 posts · 4 votes
    9y
    Originally posted by @John Thedford:

    @Nelson J Castillo

    Do they answer their phone? Are you sure they didn't skip with your funds. It happens.

     They do not answer the phone. Last message I received from her was on 6/29. She said "I will finalize your account and give all keys to (new PM) and write funds to you".

    I have her license number and have filled out the complaint form and gathered all necessary documentation to submit to DBPR. I have also contacted an attorney about the matter. Attorney will give me a call back on Monday since he was out of office today.

    @Mindy Jensen I have her address as well and will be passing by her office. Unfortunately, she is the head of the company.

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    @Nelson J Castillo

    Forget the attorney. DBPR has them for your benefit:)

    0Reply
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