Nightmare property management company - need advice!

23 Replies

Hello members,

I'm a landlord, dealing with a property management company that can only be considered a 'nightmare'.

In order to cut my story short (unless someone is interesting in hearing me out :) ), I'm now in a situation where they signed a 12-month lease with a tenant with terms that I did not agree to. More specifically, I had asked them to either have the client assume responsibility for water  and sewer (or) increase the rent by $x per month. They did neither and now casually claim that even though it was a mistake on their front, they cannot do anything about it since the lease is a binding contract for its period. This error on their side is going to cost me at least $2k over the course of the year.

I have a trail of everything in email conversations (including a complete list of my troubles with this unprofessional company). Can someone tell me what my options are with respect to the lease, going forward?

1) Is it true that we cannot have the tenant resign the lease with the adjustments? 

2) How do I make the company pay for their mistake, and more importantly for my losses?

Thanks,

Shiv

Shiv,

My advice is seek an attorney before going any further discussing with the management co. they will be able to tell you what you may be able to do. if he agrees with you that you can do something, the next letter to the property management co should come from the attorney. that said, if you have an Email trail that you specifically told them that then you may be able to scare them into reimbursing you the difference with a letter from an Attorney. they should have Error and Omissions Insurance that covers them for just such mistakes. i do not think that you can get it from your tenant because they represent you in a binding contract, so it would be the property management co. you would have to seek that from. that's my opinion but i am not an Attorney.

Sounds like lease is signed , its a legal contract , so its probably no on the lease .

You can always sue the management company .

You can't change the existing lease unless all parties agree.

I would contact an attorney and seek compensation from the property manager. Once an attorney is involved, the manager will likely find a way to compensate you through insurance or personally.

If they are decent and ethical people, they would pay for their mistake and compensate you the $2000

thanks a for your responses everyone. I really appreciate your time. Does anyone have a good lawyer's contact that I can use for this case?

I'm very inclined to reveal the management company's name and the emails that show their pathetic service. I would hate for someone else to fall prey to them. I'll probably wait to consult a lawyer before I do it.

Appreciate your help.

@Sivakumar Ganapathy

I work for a property management company and unfortunately mistakes do happen sometimes. However, it sounds like this is not the first time. Can I ask why you continued to work with them if you had  a long list of troubles with them? 

Once the lease is signed by all parties it is binding. Did the company sign the lease yet? If not, they can reach out to the tenant to do a new lease. If they already signed, I would recommend at least reaching out to the tenants and explain the mistake and hopefully they would do a new lease. If that doesn't work out try to get an agreeable compensation from them (easiest would be to have them assume the water bill for the year) and look into legal means if necessary.

Also, just curious, is $2k in water/sewer for the year normal in your area?

@Adam Ramsey

My troubles started when I purchased the home in November last year and signed an agreement with them. Only after I signed the agreement did I realize their callous attitude and their sheer lack of responses to my  emails or phone calls. In fact, their attitude is probably what led to them to completely ignore my emails regarding my lease requirements.

And yes, I expect the water and sewer to cost about $160 per month. That's the bill I got during the last month at least. so, I just extrapolated that. This is my first home in this area and hence I'm surprised too.

@Adam Ramsey

One more question: Do you know if reaching out to the tenant directly will create any other issues? I do notice that the previous lease that they had makes them pay for water and sewer. 

@Sivakumar Ganapathy an attorney will probably cost you at least $2K as well so... I would accept the lease and then send the property management company a certified letter notifying them of your intention to file a small claims action. You can provide the email trail if you wish. You can give them your specific request: reduce your expenses by $2k this year. If they are not responsive then file the claim. In my area it costs about $100. 

@Sivakumar Ganapathy if you pay $2,000/year for water/sewer then you should be worrying about the utility screwing you more than the PM company! That being said hiring a lawyer is a waste of more time and $$ unless you are going all the way to court and for $2,000 thats a loser I can tell you. Contact the PM company, demand actual remuneration for the actual expense and my guess is they will make it right. If they don't then ask for their E&O insurance info and you just file a claim directly with the carrier, no attorney needed. Then the PM will be forced to deal with it and your problem should solve itself.

@Robert Gilstrap Thanks for your tip. I was literally asked to leave by the PM company's head when I asked them to correct their error. As you said, I believe it will be a waste of my time to take them to court, although I do wish to teach them a lesson and not to mess with other clients. I will see if I can talk to the E&O Insurance, but I doubt if they will give me that information. They don't seem to want to talk to me (out of guilt, I believe).

In any case, my combined water + sewer bill was around $165 for the last month. Are you saying that it is very expensive? Or are you saying that something could be wrong with the metering?

My personal house is over 10,000 sq. feet and my water bill is around $65/mo. so $165/mo sounds insanely high to me. If the broker for the PM company won't address the issue file a complaint with whoever the governing body for real estate is in your state. You can go the small claims court route but if you are distant from the property then that becomes cost prohibitive. In any case if they fail to address the issue at all then fire them and move on to someone else. Next time look for a PM who is NARPM affiliated and preferably an MPM (master property manager), ask for a copy of their E&O and General liability insurance up front as well.

@Sivakumar Ganapathy are you absolutely positive that you are billed on a monthly basis? Where I am I get my water bills every three months and they average about $240 each time. Possibly you’re billed the same and haven’t realized since this is the first property you’ve owned in this jurisdiction?

Either way I’m sorry you even had such a poor experience with this PM company. 

really depends on what state your in.. but the run to a lawyer camp always cracks me up on these small dollar deals.. you will blow money for nothing.. other than a saber rattler letter..  a threat to file a complaint with the real estate division usually gets a PM attention if they were negligent..  they are licensed correct.

were is this property ???

Originally posted by @Jay Hinrichs :

really depends on what state your in.. but the run to a lawyer camp always cracks me up on these small dollar deals.. you will blow money for nothing.. other than a saber rattler letter..  a threat to file a complaint with the real estate division usually gets a PM attention if they were negligent..  they are licensed correct.

were is this property ???

Right, this case is an easy $5k-$10k retainer for any attorney who is worth it...throwing good money to be right but have a lower bank account balance in the end. 

If their E&O insurance is the lowest, most basic level, it probably has a $2.5k deductible, or $1k deductible if its the best. Totally not worth it for the increased rates to have this $2k issue passed through insurance on their end w/ the increased premiums. Lay that out to the PM company and see if they respond more positively. And if they don't, expect to be shut down by the insurance company and their $500/hr attorneys until you have a sharp attorney of your own.

In the future (I know this doesn't help you now), get insurance certificates from your PMs and contractors BEFORE work commences.

@Matthew Olszak   our E and O has a 5k deductible.. I think people may confuse a closing attorney in a closing attorney state with a litigation by the hour attorney..  closing attornies work like escrow companies do out our way with a set fee to close.. not an hourly rate.. apples and oranges what your paying for.

First thing I'd do is check the terms of your contract with the PM. Usually there is a clause in there that you can sever the contract with a bit of notice for any reason. If they are refusing to own (and pay for) their mistake after you've had civil conversations with their management, I'd do a couple things. I'd sever the contract and take them to small claims. If you have documentation that you both agreed to terms and they just didn't follow through, it's likely that you'd have some level of success in small claims and you certainly don't need an attorney for that. Finally, once this is all settled, if you still feel that they didn't handle the situation ethically, I'd leave them some honest, well written and professional reviews on various websites.

Best of luck.

I can definitely empathize with your situation. I have my own PM nightmare stories. Recently the PM sent me a electricity bill of $250 on a vacant home (an out of state property). I wonder if they let the AC on and lights on for a month. no telling. I did not even bother questioning them.   this is just one of the many failures/indiscretions on their part and they always came up with answers to justify their actions. 

Another company came up with creative ways to rip me off such as lawn mowing fees, crack in the wall repairs. It's really a challenge to find an ethical and responsible PM company esp out of state. 

most of them care only care automating their business (with least number of staff) and maximizing their gains. don't like emails, phone calls and hate being questioned about maintenance expenses. Out of state landlords are especially vulnerable to being ripped off and they know this and take advantage of this. it's a shame! 

Originally posted by @Jaya Y. :

I can definitely empathize with your situation. I have my own PM nightmare stories. Recently the PM sent me a electricity bill of $250 on a vacant home (an out of state property). I wonder if they let the AC on and lights on for a month. no telling. I did not even bother questioning them.   this is just one of the many failures/indiscretions on their part and they always came up with answers to justify their actions. 

Another company came up with creative ways to rip me off such as lawn mowing fees, crack in the wall repairs. It's really a challenge to find an ethical and responsible PM company esp out of state. 

most of them care only care automating their business (with least number of staff) and maximizing their gains. don't like emails, phone calls and hate being questioned about maintenance expenses. Out of state landlords are especially vulnerable to being ripped off and they know this and take advantage of this. it's a shame! 

were was your property in many parts of the country you need to keep the heat air going other wise you have way worse issues than 250 bill.. if you cant handle 250 you should exit the game..  

@Jaya Y

Same thing happened to us - crazy electric bills on a vacant house. Once we were back in the area and got into the house ourselves we discovered on our own that the HVAC filters hadn't been changed in a year and the AC was broken, running continuously trying to heat & cool the house. Something to look into. (And yeah, all the PMs we've ever had are happy to sit back and collect their fees while making excuses and ignoring our attempts to make them actually MANAGE our properties.) Good info here about E&O insurance etc... I'm definitely taking notes!

Originally posted by @Jay Hinrichs :
Originally posted by @Jaya Y.:

I can definitely empathize with your situation. I have my own PM nightmare stories. Recently the PM sent me a electricity bill of $250 on a vacant home (an out of state property). I wonder if they let the AC on and lights on for a month. no telling. I did not even bother questioning them.   this is just one of the many failures/indiscretions on their part and they always came up with answers to justify their actions. 

Another company came up with creative ways to rip me off such as lawn mowing fees, crack in the wall repairs. It's really a challenge to find an ethical and responsible PM company esp out of state. 

most of them care only care automating their business (with least number of staff) and maximizing their gains. don't like emails, phone calls and hate being questioned about maintenance expenses. Out of state landlords are especially vulnerable to being ripped off and they know this and take advantage of this. it's a shame! 

were was your property in many parts of the country you need to keep the heat air going other wise you have way worse issues than 250 bill.. if you cant handle 250 you should exit the game..  

Originally posted by @Jaya Y.:
Originally posted by @Jay Hinrichs:
Originally posted by @Jaya Y.:

I can definitely empathize with your situation. I have my own PM nightmare stories. Recently the PM sent me a electricity bill of $250 on a vacant home (an out of state property). I wonder if they let the AC on and lights on for a month. no telling. I did not even bother questioning them.   this is just one of the many failures/indiscretions on their part and they always came up with answers to justify their actions. 

Another company came up with creative ways to rip me off such as lawn mowing fees, crack in the wall repairs. It's really a challenge to find an ethical and responsible PM company esp out of state. 

most of them care only care automating their business (with least number of staff) and maximizing their gains. don't like emails, phone calls and hate being questioned about maintenance expenses. Out of state landlords are especially vulnerable to being ripped off and they know this and take advantage of this. it's a shame! 

were was your property in many parts of the country you need to keep the heat air going other wise you have way worse issues than 250 bill.. if you cant handle 250 you should exit the game..  

@Jay Hinrichs: Are you saying that I should turn a blind eye to grossly odd  glaring-in-your face $250 electric bill on a vacant property?! Several small fees of $250 over months will add up and drain thousands of dollars in shady prop management fees.  I have endured many a NY winters in the past with heater blowing all winter long in 2000 sq feet home and still have not seen $250/month electric bill ever! 

I have empathy for both you and your tenant. Asking them to sign a new lease would seem like bait-n-switch at this point. I would take the fight to the property manager. 

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