Selling rental - recent annual PM inspections were not performed

9 Replies

Hi,

We are putting our Southern CA home for sale.  The tenant moved out last Saturday and has been living in our property since 2011.   The tenant did not paint match the white walls so you can see the mismatch in the living room below.  Also our kitchen cabinets are scratched up quite a bit.  Carpet has many stains.  I asked our property management company for copies of the annual inspection reports and the last annual inspection was on Jan 2015.  I asked why none in 2016, 2017, and 2018 and was replied the following from the PM ,

"The interior paint would fall under normal “wear & tear” and the tenant would not be responsible ... There were no annual inspections for 2016 & 2017 due to the tenants would not accommodate our request for interior access. (Property Manager in charge of our house at the time) did schedule annual inspection in 2016, when she arrived at property (the tenant) told her that he was late for court and would contact her to reschedule. On 11-6-2017 when the property had been assigned to myself I contacted tenants to schedule annual inspection, I was told it would need to be done at a later date due to their schedules.

I received call from painting contractor who was reviewed cabinet photos, Silverstar would not bid on sanding & staining cabinets since the dye lot would not match, they are showing normal signs of aging. Will contact handyman to take care of cabinets and reinstall bathroom sink."

My questions

1) Is it true tenant is not responsible for the paint mismatch?

2) Am I SOL on the cabinets too? 

3) My thoughts these past few days have been that an annual PM inspection in Jan 2016, 2017 and 2018 could have remedied the issues above and the response from the PM is pretty weak.  Why could they not reschedule?    The lack of annual inspections these past few years is now clearly documented.  Can I use this in my favor?  If yes, how?

Thank you in advance !

Warren

I expect to repaint after every tenant.  Especially if it has been 7 years

Carpet to me is goin good to last 7 years so personally I would chalk it up to doing business.   BUT I would keep the security deposit to change it

Did you get the security deposit?

Cabinets I’m not sure about. 

For me an owner should be getting reports from the PM a minimum of every 6 months.  

Just because a PM is in place in my opinion doesn’t mean the owner can just let it go.  Just like a manager you assign a task to an underlying but you have to go behind them and follow up to make sure they completed the task 

In this case to me that would have been making sure an inspection was done

Gong forwar I would suggest you find a PM who is willing to change furnace filters every month on a certain day.  They would also do a quick walk through at the same time and email you a quick report 

If you want you could even give them a sheet to check off for thing such as floors in same condition.   Walls in same condition.  Any stains on carpets etc 

If the same tenant occupied for four years, I would probably chalk up the paint to ordinary wear-and-tear because I would freshen it up before putting it on the market anyway.

The cabinets are beyond ordinary wear-and-tear for a four-year period. Unless they're made of really bad material.

As for the PM, they have no excuse for not inspecting and I'm surprised they even tried to pass of such lame excuses. If you feel strongly this is beyond ordinary wear-and-tear, get a bid and charge the PM for the prorated renovation. Make it clear that their failure to perform inspections enabled the problem to worsen and they are therefore liable.

If they refuse to pony up, you can file a complaint with their Broker and then the real estate commission or whatever your governing body is for California. Usually the threat of a complaint with the commission will motivate them to negotiate with you.

Originally posted by @Nathan G. :

If the same tenant occupied for four years, I would probably chalk up the paint to ordinary wear-and-tear because I would freshen it up before putting it on the market anyway.

The cabinets are beyond ordinary wear-and-tear for a four-year period. Unless they're made of really bad material.

As for the PM, they have no excuse for not inspecting and I'm surprised they even tried to pass of such lame excuses. If you feel strongly this is beyond ordinary wear-and-tear, get a bid and charge the PM for the prorated renovation. Make it clear that their failure to perform inspections enabled the problem to worsen and they are therefore liable.

If they refuse to pony up, you can file a complaint with their Broker and then the real estate commission or whatever your governing body is for California. Usually the threat of a complaint with the commission will motivate them to negotiate with you.

 Never having had a PM I didn’t realize the PM would be responsible for wear on the cabinets.  Interesting 

It was 7 years not sure if that make a difference or not.  Cabinets look like very low end possibly even pressboard not can’t tell for sure 

What exactly is your overall goal? If you are selling it you would want to make all of these repairs (and more) anyway to get top dollar. 

If the lease prohibited painting the walls and they did not put it back to the original color you could keep the deposit to repaint the walls they mis-painted. But to me, if they were there since 2011, everything seems pretty normal. Fighting with the PM and a tenant who has already moved out is just going to cause lost time and headache. Fix it up to a sellable condition, deduct the costs on your taxes, and if you have other rentals maybe look into a new PM company that actually does the inspections. 

Warren,

I’m going to be plain in my response. Please take it as the lesson it is. A lesson learned is not a mistake. If you don’t learn from it, that is the mistake.

First off, you should likely keep that security deposit if the damage to the house warrants. Ultimately this will be at your discretion.

Secondly, the PM person/company obviously failed to do their job and what they were being paid to do. You may have legal recourse against them for this. That being said, you have some culpability in the situation as well. You were paying them to manage....but who was managing the manager? Regardless of what you do with the house, moving forward you would do well to learn this lesson. The best person to look after your well being is you. PM’s are no different than any other employee. They require guidance, support, time, discipline, etc., and sometimes, unfortunately, they have to be shown the door.

The house, the tenants and the management company weren’t the issue here. There was an obvious problem that was known that you did not address immediately.

It is my hope that my direct response is taken as what it is meant to be.....helpful for your growth. Best of luck to you!!!

I'm not saying the PM is normally responsible. I'm saying they may be responsible if they were negligent and allowed the damage to happen.

@Peter M.  Yes, I plan to make the repairs .  My thought in creating this thread was had the PM done the annual inspections, the amount needed to make the repairs could have been minimized.  And since it the annual inspections were not performed in recent years, I would have recourse.  That is really the goal of this thread.  Do I have recourse or as you suggested, it'd be an uphill battle?

@Rick Zink   Yes, repairs will come out of the deposit (~19xx) but I am anticipating the necessary repairs will exceed the cost of deposit.  "The house, the tenants and the management company weren’t the issue here." A bit harsh but I understand you mean well.  I naively thought the PM would do their annual inspections and did not verify that they actually did so that is indeed big lesson learned for me.

Ok I understand now. Unless there is a specific provision spelled out in your property management agreement about your rights if they fail to perform the inspections, I would not waste time pursuing it. And honestly, if that is the worst mistake this PM company made you may just be able to explain your expectations moving forward and keep using them rather than firing them from any other rentals you may have. 

Now if you do find major damage when you go to do the repairs that would have been caught during these inspections and you can prove damages for a lot of $, then you may have a case against them. Right now it is simply cosmetic and if you took them to court the lawyers would be the only ones winning.  I would chalk it up to the cost of doing business and a lesson learned.