Property Manager Not Disbursing Funds/Continuing to Collect Rent

Property Manager Not Disbursing Funds/Continuing to Collect Rent

Sunitha RaoPro Member
Rental Property Investor · Indianapolis, IN · Member since 2017 · 21 posts · 18 votes

Hey everyone,

Would love to get some insight/guidance regarding a current issue.

I chose to not renew a contract with one of my property managers and notified him in late March, with the contract effectively ending at the end of April. When speaking with him in April, he agreed to send over the security deposits and cash reserves he was holding, as well as the tenant leases and contact info. Our last conversation was close to a month ago, and I have yet to receive anything and he also has not been responsive, despite multiple emails and phone calls. On top of this - one of my tenants was out of town and without her contact information, my new property manager was unable to inform her that management of the property had transferred, so the tenant paid my old property manager for May. 

Trying to understand what my options are in order to collect - I know that I can file a complaint with the AG but I’m currently more focused on collecting what is owed to me, as it is to the tune of a few thousand.

If it matters (for small claims court, etc) - my property is in Noblesville, Indiana while the PM seems to be incorporated in Indianapolis.

Thanks everyone!

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Managing Broker / Investor · Indianapolis, IN · Member since 2015 · 350 posts · 362 votes
7y

@Sunitha Rao

Sorry you're having to deal with this. Here are a couple of other suggestions to bring pressure to encourage payment. The threat of these may help bring resolution. 

Since they are managing for 3rd party individuals or companies they are required to be licensed in the state of Indiana. Hopefully, this will be resolved without too much more trouble but if it is not, assuming they are a properly licensed Broker, you can file a complaint with the Indiana Professional Licensing Agency. Here is a link to check their licensing. If they are licensed there is also a high probability they are members of MIBOR (Metropolitan Indianapolis Board of REALTORS). If they are members you can also file an Ethics Complaint against them. Here is the link to search for MIBOR members. 

If they are not licensed, it is illegal for them to manage 3rd party properties and they should immediately be reported to the Indiana Attorney General.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    Can your tenant recall her payment and pay it to you?  Send the PM a registered letter stating he has until XXX date to close out your account and return the agreed upon security deposits and rents (being specific as to which months).  If he doesn't reply by a set date outlined in the letter, tell him he will hear from your lawyer. 

    Also try calling from a different phone, so the caller id doesn't show your name.

  • Sunitha RaoPro Member
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2017 · 21 posts · 18 votes
    7y

    @Theresa Harris

    Thanks for your input!  This tenant pays early and is generally a very good tenant so I can't recall and would prefer to take care of matters myself so as not to disturb her further. I haven't progressed to a registered letter, but will do so if I don't hear from him shortly.  Also - great idea regarding calling from a different phone - thanks so much!

  • Real Estate Coach · Hampstead, NC · Member since 2016 · 93 posts · 39 votes
    7y

    I would get yourself an attorney.  You might be surprised what a phone call from that attorney to your old PM might accomplish.  It may cost you a couple of hundred bucks, but if it gets your cash back, then it's worth it.  I have a real estate attorney I can recommend.  PM me if you're interested.

  • Managing Broker / Investor · Indianapolis, IN · Member since 2015 · 350 posts · 362 votes
    7y

    @Sunitha Rao

    Sorry you're having to deal with this. Here are a couple of other suggestions to bring pressure to encourage payment. The threat of these may help bring resolution. 

    Since they are managing for 3rd party individuals or companies they are required to be licensed in the state of Indiana. Hopefully, this will be resolved without too much more trouble but if it is not, assuming they are a properly licensed Broker, you can file a complaint with the Indiana Professional Licensing Agency. Here is a link to check their licensing. If they are licensed there is also a high probability they are members of MIBOR (Metropolitan Indianapolis Board of REALTORS). If they are members you can also file an Ethics Complaint against them. Here is the link to search for MIBOR members. 

    If they are not licensed, it is illegal for them to manage 3rd party properties and they should immediately be reported to the Indiana Attorney General.

  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    7y

    @Sunitha Rao

    I’d say it’s unlikely they are trying to steal your money. It wouldn’t be in their best interest, to ruin their reputation over peanuts. Probably just waiting for until final bills to come in. We usually have a 30 days closing period as we don’t want stuck with bills (water, etc). Just send them emails stating what you want and get a firm date to close accounting.

    Good luck and sorry it’s stressing you out. But probably more of a misunderstanding than theft.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    @Sunitha Rao As Todd mentions, your first step should be to contact the Broker of this company. If the Property Manager is the Broker, contact the state REALTOR board and file a complaint. They will put pressure on the Property Manager and fix this issue lickety split 90% of the time.

    The DIY Landlord Book4.7247 Reviews
  • Sunitha RaoPro Member
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2017 · 21 posts · 18 votes
    7y

    @Darren Finney @Todd Burton @Josh C. @Nathan Gesner

    Thanks for the insight, all!  Currently - on hold for a few days.  I sent out an email, requesting disbursement within a week, which I felt was reasonable, given the length of time that had already passed. Also referenced escalating the situation (MIBOR)  if I didn't receive confirmation.  I did get that confirmation with a few hours, so sitting tight until the disbursement is initiated.

    Thanks so much for the assistance and reassurance - very much appreciated and will let you know how the situation evolves! :)

  • Managing Broker / Investor · Indianapolis, IN · Member since 2015 · 350 posts · 362 votes
    7y

    @Sunitha Rao

    Any update on this? Hope you have resolution by now.

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