Tenant damaged property, PM says deal with tenant directly?

Question

Question for the forum. I have a tenant that caused damage to the property, he has admitted fault in writing and said he would pay what is owed. I told my PM to send the bill directly to the tenant and have him pay since he already admitted fault.

The bill came to about $2,300 worth of damage.

The PM sent me the bill anyway, saying that I need to pay the bill to the PM's contractor, and then I am responsible for collecting the reimbursement directly from the tenant.

Does this sound right?

Also, I do not want the tenant knowing who I am as the owner, that's why I have a as a point of contact, not me.

Secondly, now the tenant is trying to back off and say, "he took care of his part" and he appears to be trying to get out of paying for the damages that he admitted to being his fault. As an FYI, this is a duplex with a tenant in one unit upstairs and another tenant in a downstairs unit. The upstairs tenant was apparently not paying attention to what was going on in the bathroom and he let his son overflow the bathtub. In writing the tenant said

"I have water damage to the carpet my son over flowed the bath tub I dried the water as fast as I could but I
understand water can cause mold so Ima willing to pay what I would owe to make sure the carpet doesn’t get
molded because of the amount of water that covered the floor"
Tenant marked as urgent

This was ten days ago. Today my PM sent me an estimate of about $2,300 because

Work Order Description:UPDATE 8/21: Downstairs Tenant stated that there is a hole in her wall and the wall is buckling and it has water damage.-5164 CEILING LEAKS: Downstairs Tenant stated that the ceiling is leaking in her bathroom, bedroom, hallway, and kitchen. She stated that the ceiling has collapsed and she is unable to contain the leak. Damage has been caused. She stated that there is a unit above her and she stated that the neighbor stated that his son overflowed the issue. -5162 -5162

In short the damage from the upstairs has caused caused this damage to the downstairs tenant.

To make things more interesting the upstairs tenant has now told the contractor, "I did my part, and is indicating he is not inclined to pay for the damages now."

Both tenants have Section 8 Vouchers so certainly most of the rental income is gauranteed. I have a feeling that if the tenant refuses to pay then I will most likely need to get CMHA involved in this as it happened in Cleveland.

What are your thoughts on this?

Patti Robertson · Answer

I am sure your PM meant you will be billed to pay the contractor and then the tenant will be billed to reimburse you. That’s the way the accounting software works. A tenant - esp a SEC 8 tenant - will not have $2300 in disposable income to pay this. Have the tenants contact their insurance companies. In the meantime, pay the contractor who protected your home from more damage.

Ned Carey · Answer

@Brian Garlington yes @Patti Robertson got it right. The property management company can not be expected to pay for damages. It is reasonable for them to try to collect the amount the tenant owes you..

If the property management company will not make an effort to collect the money from the tenant then you need to decide if that is a big enough issue to change Property Management companies.

As Account Closed I would check tentant landlord laws to see what you are legally able to bill the tenant.

Account Closed · Answer

First I would consult your state tenant-landlord laws to make sure your decisions and actions fall within the law.

Typically, all repair expenses, in respect to the property management company and the contractors, are the liability of the property owner. If it is discovered the damages are the caused by the direct actions of the tenant, or the tenant's occupants or guests, the repair expense belongs to the tenant and is added to their account for payment, in addition to the rent, and should be outlined as such in the lease. If it is outlined in the lease and the tenant is occupying the premises, doesn't pay the repair expense, then you may consider eviction for violating that portion of the lease.

If the tenant has vacated and doesn't pay the repair expenses, it can be taken out of their security deposit. If the security deposit does not cover all remaining expenses, then the property owner will have to take action in court against the tenant. The property management company, if capable, may be able to assist but it's probably prudent to use your attorney.

You mentioned the tenant is Section 8. I would also check with the state department and see what assistance, if any, the state provides to the landlord for damages caused by the tenant.

Harry Darmawan · Answer

Sounds like you have a bad PM in this case. Take care of the damages and change the PM.

Anna Sagatelova · Answer

@Brian Garlington the amount, if billable to the tenant, is not billable as additional rent. When you have a CMHA contract, it's very important not to categorize damages/repairs the tenant is responsible for as rent.

Your PM should not have an issue adding those charges to the tenant's ledger, however enforcing those payments is another issue altogether when you are working with a section 8 tenant. I speak from experience with CMHA specifically.

Andrea O. · Answer

hi @Brian Garlington, I am curious to know how this ended up. Did the PM agree to add an amount to the tenant monthly rent?

Adam Martin · Answer

I think it is only fair you pay the contractor up front, they are not going to be willing to try to collect from the tenant as they ware working for you not the tenant. This also sounds like something renters insurance would cover, do you require it and have you looked into a claim. If someone is on section 8 I would be concerned that they would have enough to cover such a large bill up front or how much they could reasonably afford to pay each month. Also curious has he paid anything yet or what does he consider his part.

Brian Garlington · Answer

@Theresa Harris @Ned Carey @Patti Robertson @Tony Edington Thank you so much. Yes, I am already having the work done as we speak. The main thing is to take care of the damage and the tenants.

Both tenants are definitely still in the property. Once the work is done I will let my PM know that I expect them to add an additional amount to the tenant's monthly rent to cover this. If my PM balks at this, then I will have a decision to make about them. If the tenant himself continues to challenge the aspect of repaying the damage that was done then I will reach out to the Section 8 office to see if they can be of assistance. Again, Thank you so much for your feedback in all of this everyone.

Theresa Harris · Answer

Patti is right. You pay the contractor and then the PM (not you as this is why you pay a PM) sends a bill to the tenant. The tenant pays the PM and the money is transferred to you by the PM. The tenant has no reason to know who you are.

I don't know how section 8 works, but contact their case worker if needed.

Tenant damaged property, PM says deal with tenant directly?

Tenant damaged property, PM says deal with tenant directly?

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