Inherited tenants and "Property Manager"

3 Replies

Offer accepted on my first deal (triplex) and inspection pending (WA State).

During my initial walk-through, I met a couple who seemed to be more than knowledgeable about the property, possessed keys to storage areas (possibly other units too), had special parking spaces, and stated that they take care of the things around the place including the large yard in exchange for lower rent. I asked if they were the property managers and they were quick to say no, they just "help out" since the owner is out of state. Upon seeing leases for all three units, their names were signed on the "Property Manager" line. Feels like there's a soft agreement between this couple and the owner.

I spoke with all other tenants privately and they seem to be very happy with the current non-property-manager.

I like the idea of resident lawn care, but am concerned about legality of a resident property manager (I'm new to this and not ready for employees on a small triplex). Any pointers here? A few thoughts in the back of my mind:

  • Estoppel agreement - need this anyway, but in this case I could clarify any special handshake deals with the last owner and this resident manager.
  • Relieve couple of any management duties like leases, walk-throughs, etc. as I can handle that now.
  • At lease-renewal, make lawn care specifically part of this tenant's lease (and mark rent appropriately lower).

Please let me know if I'm close to the mark or far off :)

You should not have tenants directly responsible for maintenance with a reduced rent. For liability reasons you should keep their rent at market and pay them for their services. You do not want to be held responsible for a tennat injuring themselves on your property doing work. As paid contractors they would need their own insurance coverage.

Thank you, this is good advice. If I set up such an arrangement, I would still be at risk unless he was insured correct? Sounds like I'd better hire a professional lawn care service or get out and mow some lawn myself.

I'm not sure I've ever seen this type of "on-site manager" arrangement in a small multi become a salvageable relationship once the new sheriff (you) is in town. It just never works out. 

They will not like no longer being able to run the show and my experience tells me they will go to great lengths to undermine whatever new rules you put in place. It can create a toxic environment for the other tenants in the building as well. I'd be gearing up to move them out and find new tenants or at the very least keep them on an extremely short leash....although I'd be happy if you reported back in 6 months and told me I'm wrong.

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