Flipper/Rehabber · Queens, NY · Member since 2018 · 43 posts · 8 votes
Hello everyone I am currently in the process of closing and their is tenants that moved in on November 9th placed by the property management company. I am asking the property management for proof of verification of income and occupation as I do not want to go through an eviction or have anyone in the property that can not afford the rent. Is this true? If so how can I go about this ? Thank you for your help!!
@James Wise Yes the property management is also handling the sale.
Alright good to know as this means we have one simple line of communication. We don't need to worry about discussing information with 3 separate parties (Seller, Realtor & Property Manager)
As I write this it's important for you to know my background as when you are on internet forums like this what you'll get is a lot of people jumping in and giving out opinions on the situation. Many of the people that do this tend to look at things in a vacuum. They only see things from their perspective and on this website that perspective is often that of a newer Real Estate Investor who at most has a handful of rental properties & very limited real world experience in the rental industry. Myself I have transacted over $100M in investment real estate sales & run a Property Management company with a $50M+ rental property portfolio. Having sold countless rental properties & screened 1,000's of tenants I am well versed on this topic from every angle.
When a Property Management business handles tenant screening they are held to strict standards as to how they handle the sensitive information that they have access to when running tenants credit & background information. They are subject to site visits to ensure compliance before they are even allowed to pull these reports. As such that information must be appropriately guarded at all times. Just arbitrarily handing it out to unauthorized parties such as yourself is a no go.
Some on this thread have alluded to the fact that the Property Manager works directly for the seller so the seller will need to give the Property Manager the authorization to give this information to you. That is also a no go. The seller has nothing to do with the Property Management Company's duties to safeguard this information as required by the Consumer Reporting Agencies & the Fair Credit Reporting Act.
What you should do instead of trying to get that specific information is get the Property Management Company's screening criteria. From there the Property Management Company should be able to verify for you that the tenants the property did in fact meet the Property Management Company's screening requirements before they were placed in the property.
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
7y
Ask the seller to provide the information to you. You have no standing with the property management company as you don't own the property yet or have a contract with them. The property management company works for the seller until the property is sold.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y
@Jeremy Cardenales I would go through the seller for this info. They must have received some sort of summary of the tenants from the property management company before they made a decision on whether to rent to them or not.
Hello everyone I am currently in the process of closing and their is tenants that moved in on November 9th placed by the property management company. I am asking the property management for proof of verification of income and occupation as I do not want to go through an eviction or have anyone in the property that can not afford the rent. Is this true? If so how can I go about this ? Thank you for your help!!
Is the Property Management company also handling the sale? Or is the sale being handled directly by the seller or another Realtor?
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
7y
You should ask the property management company why they will not disclose tenant information. My guess is the seller has not authorized it and they cannot disclose someone's confidential information without authorization.
Check your purchase docs to see what information is required to be turned over about the tenant. Required information is an obligation on the seller. Sharing additional information that might be helpful to you could be a liability for the seller or property manager if the tenant can sue them for breach of confidentiality.
@James Wise Yes the property management is also handling the sale.
Alright good to know as this means we have one simple line of communication. We don't need to worry about discussing information with 3 separate parties (Seller, Realtor & Property Manager)
As I write this it's important for you to know my background as when you are on internet forums like this what you'll get is a lot of people jumping in and giving out opinions on the situation. Many of the people that do this tend to look at things in a vacuum. They only see things from their perspective and on this website that perspective is often that of a newer Real Estate Investor who at most has a handful of rental properties & very limited real world experience in the rental industry. Myself I have transacted over $100M in investment real estate sales & run a Property Management company with a $50M+ rental property portfolio. Having sold countless rental properties & screened 1,000's of tenants I am well versed on this topic from every angle.
When a Property Management business handles tenant screening they are held to strict standards as to how they handle the sensitive information that they have access to when running tenants credit & background information. They are subject to site visits to ensure compliance before they are even allowed to pull these reports. As such that information must be appropriately guarded at all times. Just arbitrarily handing it out to unauthorized parties such as yourself is a no go.
Some on this thread have alluded to the fact that the Property Manager works directly for the seller so the seller will need to give the Property Manager the authorization to give this information to you. That is also a no go. The seller has nothing to do with the Property Management Company's duties to safeguard this information as required by the Consumer Reporting Agencies & the Fair Credit Reporting Act.
What you should do instead of trying to get that specific information is get the Property Management Company's screening criteria. From there the Property Management Company should be able to verify for you that the tenants the property did in fact meet the Property Management Company's screening requirements before they were placed in the property.
@James Wise in on the right track. It all boils down to who is the "end-user" In most cases, the property management company is the end user, not the owner/Landlord. I second to check the PM's screening criteria, and if they can confirm that the tenants met that criteria, that should be good enough.
However, I would insist that you have all the necessary tenant information required to file eviction if you need to down the road. In North Carolina, we have to submit a Service Member Affidavit, and swear under oath that the tenant(s) are not active duty military. We need either their SSN and/or their drivers license number to perform the national database search. I imagine this is necessary in all states now. I had a situation recently where the tenant was brought on for us to manage by the owner, who neglected to get this information. We had a nearly impossible time trying to evict. I went out to the property many times to try and see the tenant in person so I could testify she was not active duty military. I even hired a process server to try and get it done.
My suggestion is put the pressure back on the seller. If it is in your sale contract that they will provide you with all necessary documentation, make it clear you will not close until they provide you the information you need to file eviction. The tenant can offer this up voluntarily if the PM company does not cooperate. I hope this helps.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Jeremy Cardenales are you keeping the management company or planning on managing yourself? @James Wise how would a scenario work if he were taking over management of the property?
@Jeremy Cardenales are you keeping the management company or planning on managing yourself? @James Wise how would a scenario work if he were taking over management of the property?
In any situation I would not release the tenant's credit information to another party. When the tenant signs their rental property application they grant my company & my company only the right to pull their information. If another party wanted the tenants information they would need to get that permission directly from the tenant post sale or post takeover of management.
Also worth noting that if we were the middle of the sale like the OP above, as a Broker I would not entertain nor would I advise my selling clients to entertain an offer from a buyer who would want some type of contract contingency requiring the tenants to grant them permission to pull their credit. Anyone who's been in the biz long enough knows that a buyer who would need to do something like this before committing to closing the sale isn't a buyer who's going to end up closing the sale. As a seller the correct move is to do exactly what the seller / seller's Broker are doing to the buyer right now, stone wall. The move is to stone wall the buyer and move on immediately if the buyer doesn't agree to move past this.
@James Wise in on the right track. It all boils down to who is the "end-user" In most cases, the property management company is the end user, not the owner/Landlord. I second to check the PM's screening criteria, and if they can confirm that the tenants met that criteria, that should be good enough.
However, I would insist that you have all the necessary tenant information required to file eviction if you need to down the road. In North Carolina, we have to submit a Service Member Affidavit, and swear under oath that the tenant(s) are not active duty military. We need either their SSN and/or their drivers license number to perform the national database search. I imagine this is necessary in all states now. I had a situation recently where the tenant was brought on for us to manage by the owner, who neglected to get this information. We had a nearly impossible time trying to evict. I went out to the property many times to try and see the tenant in person so I could testify she was not active duty military. I even hired a process server to try and get it done.
My suggestion is put the pressure back on the seller. If it is in your sale contract that they will provide you with all necessary documentation, make it clear you will not close until they provide you the information you need to file eviction. The tenant can offer this up voluntarily if the PM company does not cooperate. I hope this helps.
This will be a state by state thing. For example in Ohio we don't even need to know the tenant's name to evict them. I've evicted many John Doe's in my career.
Rental Property Investor · Beachwood, NJ · Member since 2015 · 132 posts · 50 votes
7y
My take on this would be that you have to trust that the property management company did their due diligence in getting a tenant who was a good fit for the property. Buying the property, you cannot evict the tenant if you want to since purchasing the property does not void the lease unless this was put into the lease that the tenant signed. Even then you're most likely stuck with the tenant.
I would just see if you can get any information on the property management company. As @James Wise stated, the property management company should have strict guidelines on getting a tenant.
I would be a lot more into finding out about the PM company, rather than the tenant.
Rental Property Investor · San Diego, CA · Member since 2018 · 44 posts · 36 votes
7y
@Jeremy Cardenales
Do you have a RE attorney in your team that can serve as a resource? I think this issue is involves what you can and cannot do in terms of laws and contracts. Take my cents with a grain of salt, and good luck to you!
Thank you for your service!
-Jeremiah
@Jeremy Cardenales
Don't know why if you are new owner why they won't provide tenant infirmation to you. When we used a property management company they provided us with the info.
@Jeremy Cardenales
You can fire the property management company then by law they would have to turn over all leases and security deposits to you or the new property manager.