PM overpaid the vendor v2

[Peter Sik]

PM overpaid the vendor, but they are unwilling to reimburse me. Instead, they replied:

""""

As discussed, we are not able to issue an immediate reimbursement for funds that were paid directly to the vendor.

That said, we have received approval to apply a full credit of your future leasing fee, which based on the current rent equals $1,580. This credit will be applied at the time the property is re-leased and will be reflected on your owner ledger accordingly.

To further demonstrate our commitment to resolving this matter in good faith, xxxx will absorb the remaining $680 difference as a courtesy, despite the funds having been paid to the vendor and not retained by management.

In parallel, we continue to pursue recovery from the vendor. If and when those funds are recovered, they will be remitted to you promptly once cleared. We will remove the credit as we made this matter correct.

We appreciate your patience as we work through this and remain committed to closing the loop as efficiently as possible. We will continue to keep you updated on recovery efforts.

""""""""""

I am going to reply:

:::::::::::

Thank you for your response.


Given how long this matter has already been outstanding, I do not find the proposed future leasing fee credit, or the uncertain recovery from the vendor, to be an acceptable resolution. This approach provides no clear timeline and may result in no actual reimbursement for an extended period.


The overpayment was caused by a failure to properly verify invoices prior to payment, and the funds were issued without my prior approval of the cleaning charge. As such, this was a management error, and the responsibility to make the owner whole should rest with management, not be dependent on vendor recovery.


Since an immediate cash reimbursement is being declined, I am requesting that the outstanding amount be offset against your monthly property management fees until the full balance is recovered. If any funds are recovered from the vendor during this process, the remaining balance can simply be adjusted accordingly by reducing or stopping the monthly management fee offsets.


This provides a clear, measurable, and timely resolution without further delay.


Please confirm in writing that this will be implemented starting immediately so this matter can be closed within this year.

:::::::::

I believe this is the simplest solution to resolve this matter. I’d appreciate your thoughts.

[James Jones]

This is a management error, not a vendor recovery issue.

The PM controls the payment process. They approved and released funds without proper invoice verification and without owner authorization. That means the obligation to make the owner whole sits with management immediately, regardless of whether they later recover funds from the vendor.

Offering a future leasing fee credit is not a reimbursement. It shifts timing risk and execution risk back onto the owner and creates uncertainty with no defined resolution date. That is not acceptable for a clear overpayment caused by internal controls failing.

The clean, professional fix here is one of two options:

Immediate cash reimbursement from the PM, followed by their separate recovery efforts with the vendor.

A written agreement to offset the overpaid amount against monthly management fees until the balance is fully recovered, with offsets starting immediately and tracked transparently on the owner ledger.

Anything else is effectively asking the owner to finance the PM’s mistake.

This situation is exactly why owners need clear approval thresholds, dual verification on invoices, and explicit language in the management agreement covering errors and reimbursement timelines. Mistakes happen, but how they are corrected is what determines whether a PM is operating professionally.

If management refuses to resolve this cleanly, that is a bigger signal than the dollar amount involved.