Property manager pocketing late fees
Hi BP,
I have used my property manager for about 9 months now, so far i've been happy with what they have been doing. I signed a contract with them back then, and every property which I have acquired and managed has been added onto this first contract i signed back from 9 months ago.
Yesterday, out of blue, they have changed their policy and reverted to having contracts signed for each property. That in itself was not too surprising to me, because i thought that's how it should be in the first place. However, what DID really get to me is that they have actually increased fees, added new fees, extended period which you can cancel the contract them without paying fees. This was NOT COMMUNICATED in anyways to the investors, and they simply say I now need to sign contract for each one. Within the list of property which I got notice for was one property which they have been "managing" already from more than month ago (it's just that they haven't found a tenant for it yet), as well. There are many things wrong and unprofessional about this, but what caught my eyes the most is there was a line saying that any late fees collected from late payment of the rents will be kept by the property manager. This does not make any sense to me. As an investor, I am liable for all expenses. If the tenant does not pay on time, 1) I am still paying all the expenses so I am the one that's hurting, and 2) the reason we have a tenant that doesn't pay on time is the managers fault to begin with (although i do get no matter how much diligence you do you will always have few bad ones). I wanted to ask to the BP community if it is a common practice for PMs to keep late fees on rents? If there are increases in fees or changes in agreements, do your PM property communicate to you BEFORE you sign a new contract? Thank you for your feedback in advance!