PM moved in tenants without my knowledge and stole money

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PM moved in tenants without my knowledge and stole money

Amber Bennett
Woodbridge, VA · Member since 2016 · 11 posts · 5 votes

I have a day job that requires me to travel a lot and parents that I care for on California. I own 3 properties in Baltimore that were supposed to be renovated to make them ready to lease and pass inspections to obtain rental licenses (which the city requires). The whole while I thought the properties were being renovated, this PM had moved in tenants and had been collecting money and didn't make any of the repairs I paid him to make. 

Once he caught wind that I found out, he immediately called and started backpedaling saying he didn't tell me about the tenants because he didn't want to bother me with the headache and that all the money was in escrow (yeah right...). Anyhow, what recourse do I have at this point? Two of the tenants are cooperative, but one of completely unresponsive at this point. Thoughts?

Thanks!

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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
6y

It's called grand theft.  There are plenty of news stories of property managers who stole rent money from their clients and they all end the same way:  arrest, jail, restitution.  I would call the police and file charges.  Rent money in escrow?  Geez, he is stupid.  I would also decide what to do with the tenants...if you elect to move forward with them, you'll want to screen them and execute contracts as the owner/landlord.  Please consider filing a police report so you're on record that whatever happened up to this point was not at your direction - and let the police interview your tenants so their engagement with him is documented. 

Protect yourself first by involving the police and documenting the theft.  I'm sorry this happened to you - and now is an opportunity to set your reputation in that market as someone who will not be victimized.  Kick butt...

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  • Leah Stuever
    Realtor · Dallas, TX · Member since 2019 · 194 posts · 164 votes
    6y

    Law suit and report them to the realtors association if your state requires them to be be licensed. Obviously cancel their contract and hire an new PM immediately. 

    2Reply
  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    6y

    It's called grand theft.  There are plenty of news stories of property managers who stole rent money from their clients and they all end the same way:  arrest, jail, restitution.  I would call the police and file charges.  Rent money in escrow?  Geez, he is stupid.  I would also decide what to do with the tenants...if you elect to move forward with them, you'll want to screen them and execute contracts as the owner/landlord.  Please consider filing a police report so you're on record that whatever happened up to this point was not at your direction - and let the police interview your tenants so their engagement with him is documented. 

    Protect yourself first by involving the police and documenting the theft.  I'm sorry this happened to you - and now is an opportunity to set your reputation in that market as someone who will not be victimized.  Kick butt...

    6Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y

    Thank God I don’t rely on property managers . Geez you guys doing long distance investing are getting slaughtered on here by the bushel basket 

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    LOL! Dennis, for every Landlord getting ripped off by their PM, there are dozens doing very well. It's always the horror story that makes front-page news.

    Here's what I would do:

    1. Demand payment of all funds and a full, printed accounting within 72 hours.

    2. Demand contact information for the tenants so you can reach out and verify what funds are owed to you.

    3. At the same time, find a replacement/professional property manager.

    4. File a complaint with the state board.

    That's just to start. I would hound this PM to the ends of the earth until I've had every dime owed and their license is revoked.

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    6Reply
  • Janell Saunders
    Bowie, MD · Member since 2019 · 8 posts · 6 votes
    6y

    I'm looking to purchase my first investment property in Baltimore and this is one of my biggest fears.  I'm so sorry that you have to endure this.  Definitely take action and don't let this PM get away with this! 

    0Reply
  • Tyler GibsonBusiness Member
    Real Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes
    6y

    @Dennis M. I agree with Nathan that good PM's don't get any credit it is always the bad ones that get all the attention. I have been fortunate that my first experience with a property manager has been stellar. that being said I interviewed multiple PM's before choosing one and after they took over my property I spoke with them on the phone once a week until we had developed a level of trust and understanding. I trusted her and she knew what I expected of her. I have referred multiple people to her here on BP because of the work she has done and the integrity she has shown to have.

    @Amber Bennett multiple people have said it but report them to the state and file a police report. Do Not Let it Slide. Learn the valuable lesson that rental investing is not really passive. Even with a PM you have to stay on top of it. A PM works for you so you have to trust but verify. Ask for updates, Ask for receipts, Drive by if you can or send someone to check to see that what they are telling you is the truth until you have developed that relationship where you know they are really truly looking out for you and your property. Sorry to hear that this is happening. 

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  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y
    Originally posted by @Nathan Gesner:

    LOL! Dennis, for every Landlord getting ripped off by their PM, there are dozens doing very well. It's always the horror story that makes front-page news.

    Here's what I would do:

    1. Demand payment of all funds and a full, printed accounting within 72 hours.

    2. Demand contact information for the tenants so you can reach out and verify what funds are owed to you.

    3. At the same time, find a replacement/professional property manager.

    4. File a complaint with the state board.

    That's just to start. I would hound this PM to the ends of the earth until I've had every dime owed and their license is revoked.

    Apparently most of them aren’t as good as you Nathan !  Yeah man I’d hate to invest out of state  these days . Seems like Every time I see these stories on here it’s a negligent pm ripping off some left coast person that bought in the Midwest for cash flow 

    2Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    6y

    Report them to the state regulators and fire the PM

    1Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    PLEASE REPORT THIS TO THE POLICE.  There are too many scam artists in Baltimore taking advantage of both local and out of state investors and unless they are reported nothing will happen.

    2Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    Also consider hiring a licensed PM next time.  While a Real Estate Salesperson license is not required to act as a property manager (at least in Maryland), it does show that the individual has some professionalism and they also have a lot more to loose if they mess up.

    0Reply
  • Justin Lanciault
    Realtor · Washington, DC · Member since 2018 · 166 posts · 88 votes
    6y

    Property managers in Maryland aren’t licensed. DM if you want a few good Baltimore ones. 

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    People have similar complaints about tenants trashing their rentals. Does that mean we shouldn't rent to Tenants? Of course not! What we need to do is learn how to screen applicants and choose the right tenant. Then we have policies and procedures to handle the few bad apples that still sneak in (or that turn bad after moving in). I lose money on about 1% of my tenants. 

    Property managers are the same. Most Landlords choose the first one in the phone book or on a Google search. Or they choose the one with the lowest fees. Or they base the decision on a personal recommendation without ever investigating.

    If you educate yourself on what a good PM looks like, and then screen several, you should be able to find a good one. It takes work, just like screening a tenant, but it's well worth it in the long run. 

    If you don't screen them, you're more likely to run into problems.

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    1Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y

    @Amber Bennett Hey Amber, so sorry to hear this story!

    Look, you need to act quickly and fire this PM asap. 

    As a side note, if you are unable to get the funds in escrow from the PM, which I'm guessing is a ONE-MAN band, you want to tread lightly with suing because you may end up spending more money to pursue funds you might not get back. 

    Please keep this thread updated and let me know if I can help you in any way!

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    6y

    @Dennis M. I liquidated all my out of state stuff as it just wasn’t scaleable. I never got ripped off by the PM but the costs of stuff was just insane.

    1Reply
  • Gil A.
    Rental Property Investor · Baltimore · Member since 2019 · 7 posts · 2 votes
    6y

    Is it Mark Fry from Property Management Pros? PropertyManagementPros.com   ???

    This is a typical story in Baltimore. I am an out of state owner of 3 properties and exchange information with several investors. It is a lawless city. My former property management company Property Management Pros owes me $10k+ and will not answer communications from me and my lawyer. There are so many complains on the internet about the Director/ owner? Mark Fry it is not even funny. Why you don't name the PM company so others will avoid them?

    0Reply
  • Dena Puliatti
    Property Manager · Huntsville, AL · Member since 2017 · 302 posts · 246 votes
    6y

    These types of "managers" give investors plenty of room to worry.  You should be getting detailed owner statements monthly that show exactly what came in and what went out.  Make sure when you chose a new manager that you chose someone that answers your calls or returns them ASAP.  I manage multiple properties for investors that are out of state.  They buy, sell, renovate, and rent the units with pictures from me.  Communication is key.  If you aren't comfortable with the contact you are getting from your manager, it's time for a change.

    0Reply
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