Do I have a case against Property Management company - Need help

11 Replies

Hello,

I am new to this community and this is my first post. I am hoping that as a new investor I can learn more from this community.

I do need some assistance understanding if I have a case against the property management company for rental property, and how to navigate through the next steps.

I, along with some of my friends, invested in a section 8 property in Toledo Ohio in October 2016.  The property management company we have a contract with receives funds from the local section 8 housing authority. The PM company has not been transferred the rent to my account since April 2017. First I was told that there was some system glitch, then they told me that the local section-8 authority has put a hold on the funds. I followed up with the section 8 authority and they send me the records showing they have been sending the rents to the PM company every month and there is no hold.I am following up with this PM company every week, but getting no response.

I want to change the PM company but fear that I will lose my past rent. I am looking for an advice – Should I sue them and generally how much it would cost. I live in CA and the property is in OH. 

Thanks!

I would get a lawyer involved ASAP. Seems pretty obvious they are stealing from you. And I would RUN, NOT WALK to a new property management company. Do your due diligence on the new company. Make sure the new PM knows how to file the appropriate paperwork to get the rents from SEC 8.

I think you need to to seek legal counsel and hire a new PM; every paycheck deposited under the current company can be considered money that you probably will never see.

To yours success!

Adam, 

Thank you for your inputs. I will contact Angela asap.  

Thanks!

@Prasad Naik -

Please post the name of the company so others investing in Toledo know what is going on. (It’s not slander when you can back up every factual statement you have made)

If you are using a properly licensed property management company as required under Ohio law you can file a complaint with the Ohio Board of Realtors. 

IF they aren’t licensed (operating under a real estate broker’s license) then they need to be reported to the same agency so they can be pursued. 

Investing in real estate is challenging enough without thieves operating in my town. 

Andrew Fidler, Real Estate Agent in OH (#2016006183)

Andrew,

Thank you for your inputs and support. I am planning to talk to a lawyer soon and will follow up on this thread. I do need to dig into their licensing information. I must confess that I relied on different people while doing this investment, and should have done more due diligence. I think that's my lesson learned. 

Thanks

Prasad 

I see a lot of complaining about property management companies about little rinky dink stuff. But wow. This one is a doozy. Good luck!

So you have not received payments in almost  a year? Attorney should have been contacted long,long ago on this one.

It is true with section 8 they inspect units and if problems need fixing they can freeze or with hold payment until unit comes into compliance.

At this point an attorney needs to look at this mess and see what is going on.

No legal advice given.

Are property management companies in Ohio regulated by the real estate commission? If so, many states have a fund to reimburse members of the public for losses, then the commission goes after the licensee for payment.  Keep this route in mind to be made whole.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353) and Massachusetts (#9​0​5​2​3​4​6)

Originally posted by @Prasad Naik :

Hello,

I am new to this community and this is my first post. I am hoping that as a new investor I can learn more from this community.

I do need some assistance understanding if I have a case against the property management company for rental property, and how to navigate through the next steps.

I, along with some of my friends, invested in a section 8 property in Toledo Ohio in October 2016.  The property management company we have a contract with receives funds from the local section 8 housing authority. The PM company has not been transferred the rent to my account since April 2017. First I was told that there was some system glitch, then they told me that the local section-8 authority has put a hold on the funds. I followed up with the section 8 authority and they send me the records showing they have been sending the rents to the PM company every month and there is no hold.I am following up with this PM company every week, but getting no response.

I want to change the PM company but fear that I will lose my past rent. I am looking for an advice – Should I sue them and generally how much it would cost. I live in CA and the property is in OH. 

Thanks!

 That sounds like fraud to me. I would contact the Ohio Division of Real Estate. This is grounds for their license to be pulled along with possible criminal charges. If they are unlicensed them operating as a PM is illegal all in itself. I imagine your case will be pretty easy to prove so long as section 8 really did pay the money.

Provide the Ohio Division of Real Estate with the following evidence.

  • Emails from the PM stating that section 8 isn't paying out any of the rents.
  • Accounting from the PM showing no rents are being paid.
  • Emails from section 8 stating that they ARE paying the money.
  • Accounting from section 8 stating that they ARE paying the money.

James Wise, Real Estate Agent in OH (#2015001161)

@Prasad Naik - fire them today. Contact Section 8 and let them know that management has been stealing from you, and to hold the rent checks for March(2 days away!) You'll probably need to send them proof of ownership as well(deed, closing statement, that kind of thing.) For March, work on getting those rents paid directly to you(or the LLC you and your friends have formed.)

If any of the tenants pay any portion of their own rents, contact them today and let them know that payment will work differently going forward. Your tenants should also have a means of contacting you as well during the transition- if you're concerned about privacy, set up a temporary email or temporary phone number. 

Seek real management immediately, and this time, do your due diligence.

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