This is a first for me. I hope some of my more seasoned BP friends can shed some light.
My SFR is managed by a property manager. The tenant recently moved out. They had $1,050 on deposit.
The property manager did an inspection and then prepared a letter to the tenant detailing all of the charges to be taken out of their deposit. The charges were more than their deposit so they were sent a bill.
I received a letter from an attorney demanding that the entire amount be returned to the ex-tenant. He threatened a lawsuit.
When I look through the list of charges, I am a little disturbed.
$100 to replace the furnace filters
$200 for gutter cleaning
$150 to change the locks
$50 Move out inspection fee
$200 Cleaning fee
$150 Floor cleaning
The list goes on. One large amount is for an unpaid water bill. I understand the tenant needs to pay for that, but I'm not sure if the tenant should have to pay for all of these other fees.
I understand that if the tenant doesn't pay out of their deposit, then I have to pay these fees.
I have two questions:
1) Is it standard for a property manager to charge all of these fees upon move out? Should I try to negotiate some of these fees with them? If they don't charge the tenant, then I end up paying for them.
2) How should I approach the ex-tenant? I thought I could write them a letter saying that I will split some of the costs with them and give them part of their deposit back. (the attorney stated in his letter that I should reply directly to the tenant and not go through the attorney)
My goal is to avoid a lawsuit, but I don't want to just roll over and pay all of these fees myself.
Any thoughts on this would be much appreciated.
@Don Jackson those charges seem high to me, eg. filter costs $10 each and takes 5 mins to replace and also gutter cleaning should be landlord's responsibility unless specified otherwise in your lease, and you can't charge for changing locks if they're not broken. In CA, you're required to send the tenant the actual receipts justifying the expenses, not just estimates. If you perform the repair personally, you have to be reasonable in charging fair market rate. eg. if it takes 1 hr of your labor for some handyman's work, $20-30/hr is reasonable, even you're probably paid much more in your own line of work.
My suggestion is to first fire the PM who obviously wanted to skim some profit by inflating the repair cost while exposing you to lawsuits (remember you're in CA - a blue state and San Jose - a city with rent control). Second get a handyman/contractor to do the repair and send the actual costs to the tenant. If you can't finish it within 21 days after vacancy, send the tenant an written estimate from the contractor with some padding along with the remaining deposit, and send the rest when the repair is done. More importantly, read the rental guidelines of your city for what you can and can't charge a tenant. Some repairs are considered normal wear and tear, eg. depending the length of the tenancy you might not be able to charge for painting the interior of the house, cleaning (or even replacing) the carpet.
@Don Jackson - the fees you listed seem like a joke. It seems to me the problem is with the PM company and not you, the tenant or tenant's lawyer. The first thing I would do in your shoes is call the PM company and get somebody to explain to you how they justify $200 to replace an air filter.
I've never seen anything this egregious, but this is precisely why I do not use a PM company. Unless they are absolutely amazing in every other regard (seems unlikely) you may want to call around to as many of their competitors in the area as you can and find somebody that doesn't price gouge.
I'd have to agree with the tenant on this one - neither you nor the tenant should get screwed here, but I would say you should give the tenant a reasonable portion of their deposit back and then it's on you to get the PM company to fix their prices.
Many times the fees are spelled out in the lease. Read the lease first. If you still have the PM do not contact the tenant directly. Work through your PM. If you start saying one thing and the PM is saying something else it could get worse. Some of it seems high but it depends on how dirty it was. Does the PM have a documented move out inspection with photos to back up the charges? Just because they sent a letter from an attorney does not mean they are filing suit. Could be their best friend helping them out. Typically you can settle with them for a lesser amount to avoid the trouble but make sure you are on the same page with the PM.
SO do you see these charges/ prior to the PM sending out the final for security deposit disposition.. if not something is lacking..
The charges by the PM for turns seems unruly and high.. a inspection charge.. what the ??? that's not fee a tenant should NOT have to cover.. it's required,, Lock change no fee unless they failed to turn in the keys,, did PM take any photo's of before condition,, and photo's of move out condition..
PM sounds like a jerk.. and your stuck defending someone you hired to do the best job possible for you.. they dropped the ball and you need to further monitor what they are up do and doing by physically taking action and checking what's up. Large amount of unpaid utilities,, why wasn't a eviction actions started for that..
I'd get a corrected disposition done and make it realistic and send out an amended form to the tenant..
OH sorry,, I see your out of state, an absentee landlord.. so you've got little to go on..
You'll end up paying the tenant back in full..more than likely
Thanks for all of your input.
Here's what I'm getting so far:
1) The fees seem rather high. I should contact the PM and get justification for each one.
2) Either the PM reduces some fees, or I step up and pay some of them myself, but the tenant shouldn't have to pay all of these egregious fees.
3) I should not contact the tenant directly. I should go through the PM
4) I should consider firing this PM.
Am I missing anything?
Does the PM have actually receipts to prove expenses paid for repairs/ to cleaners, you may need those.
Does PM have before and after photo's and did they take new ones prior to new tenant moving in .. you want that if possible..
Copy of all paperwork for this tenant, lease, notices, move-outs,, service records for maintenance issues.
Copy of what you agreed to with the PM for how they do work for turns and costs related to getting back to rent-able condition.
good luck. No splitting fee's with tenant either correct billing or not.
Unless its specified otherwise in the lease:
$100 to replace the furnace filters - This should be a preventative maintenance item charged to you to protect your furnace. The tenant shouldn't be charged this, and you certainly shouldn't be charged $200. Maybe $10. No labor because they can change it out in 10 seconds while there doing other work.
$200 for gutter cleaning - I doubt this is the tenant's responsibility...leaves in the gutter is definitely not their 'fault'.
$150 to change the locks - If keys were returned, this should be charged to you.
$50 Move out inspection fee - Shouldn't be tenant's responsibility.
$200 Cleaning fee - Depends on if the unit was left in "broom clean" condition, which is likely how your lease puts it.
$150 Floor cleaning - See above
The other "it depends" is how long these tenants have been there. Wear and tear on the floor for a 1 year tenant is much different than a 10 year tenant. Also, its my opinion that if the tenant isn't responsible for the charges but you are, you should still have a problem with these, they all appear extremely bloated except for maybe the $50 inspection.
Great advice above. Even if all of these things are in your PM agreement or tenant lease, still sounds like a bad PM to me.
I always do a pre-move out walk-through with the tenants. This gives them an idea of what to expect and also a chance to cure anything before move out. Then if/when I do have to have some things done that are chargeable to the tenant they are not shocked.
Wow....this charges are ridiculous..... when I see that type of stuff I truly think the PM is "fishing" and hoping that the tenant will just concede since some may think they have no rights and wont put out the effort to fight the charges.
I had a landlord do the same to me when I was a renter..... I cleaned the place top to bottom...he inspected with me present, found a few things that I cleaned some more.....and then tried to keep my entire deposit. Had charges for gutter cleaning, chimney cleaning....and the kicker.... light bulbs!!! When I did the math on the charges, he was charging me $7/bulb assuming he changed EVERY light bulb in the house....every single one.... so you can figure what I was expected to pay for the 2-3 he probably replaced....
Took him to court...judge laughed....I got ALL my $$ back.....
This is a PM issue.... those charges are out of line
Thanks for all your feedback. I'm currently trying to reach my PM. They have gone dark.
I have emailed them asking them to explain each item and why they are so high. I've left voice mails.
I'll update this thread after I get more information. You guys are all very helpful with your comments.
Just had a long talk with my PM. We went through each item on the bill. Some items were reduced to reasonable levels. Some items were taken out completely, and other we agreed were my responsibility and not the tenant.
This may not sound like a win, when we agree that I would pay an item rather than the tenant, but it just makes sense.
For example: The change lock fee. I've paid for this in other properties and I understand I should pay it here.
Same goes for the gutter cleaning (at much less than the $200 originally quoted). This should be considered normal wear and tear on a property.
Thank you all for your excellent comments and suggestions. I feel like this has been a great learning experience.