All Forum Posts by: Howie W.

Quote from @Greg H.:

What state the property was in makes a difference. In Texas, the contractor could go the  mechanics lien route and win as you benefited from the repair. Saying that you might have a case against the property manager especially if you are located in a state where one has to be licensed 

Greg, thanks for the reply. I researched mechanic's liens. Virginia - the timeframe for a mechanics lien has passed - it is 90 days from the time of the work being completed. Work was completed last September - over 200 days ago. Also, the company billing does not have a HVAC license, another requirement to file a mechanics lien. The third party contractor does have a license. Filing a false mechanic's lien in the state is a Class 5 Felony. 

Also, I don't live in the state where the property is located.

Quote from @Janet Behm:

Howard,

You probably know that it isn't a contract unless it is a legal contract and signed by everyone. 

What does the contract say?

Janet, 

Thanks for the reply. I am assuming you mean the authorization from me to do the work, which I replied "no". They use a property management software that I reply to - I will have to find the actual email that I responded with "no". However, during the last week, I was forwarded an email from the Maintenance company apologizing for their mistake and admitting they did it without authorization.  

If you mean the contract with my PM, they are authorized $250 of repairs without my consent. This amount exceeds that. 

BLUF - a maintenance company my property manager uses approved the installation of an A/C unit to a third party vendor without our authorization. 

The installation was completed last September 2021 and I received the information from the PM last week (April 2022). When the request came last September, I declined the first vendor and wanted a second opinion/quote. The second vendor mentioned the A/C was working, but a part could fail and it was no longer in stock. I talked with the second vendor directly and told them directly that when the part fails, we'll begin to explore a new A/C system. 

Shortly after, the first vendor approved the work order and sent it to a third party. Fast forward to April of this year and my PM informs me of the invoice. I declined the full amount and asked for an itemized invoice to determine the cost of parts and to perhaps pay a portion of that. This is after discussing the matter with other owners, property managers, and A/C Companies. I have been getting several different numbers from my PM and the Maintenance company on the actual cost - from $7450 to $4750, but not an itemized list of parts - at least one I can feel comfortable with (cost of "parts", which was only one line and broken down specifically was approx. $4200 and not from the third party vendor who performed the installation. Note - the maintenance company is not a certified HVAC company. 

The PM came down to a $4750 cost total and would pay $1000 of the cost if I pay the remainder. My offer was $1500, which would be part of the parts, but I was never given a firm number that I am conformable with. This was sent via email, but during our phone conversation the PM mentioned a potential lawsuit/collection - apparently from the Maintenance Company. My reply was I never authorized a repair and would also inform the BBB and FTC. 

Thoughts? Advice? Am I liable for any maintenance cost that I did not authorize? My offer of $1500, IMO, was more than fair to help compensate the third party vendor. This is the short story, as there are other details I can fill in. 

Thanks Tyler. When the mortgage is paid off, shouldn't the property move from being a passive loss to passive income? The only expense would be maintenance, taxes, insurance, and management fees. If the property becomes passive income (unless I am reading it wrong), shouldn't it be offset by the years of passive losses? I am looking at ways to capitalize on these passive losses and understanding this concept, so any ideas would be appreciated.

Over the years, I was able to buy two properties in different states (Florida and Virginia) that I converted to rentals (the beauty of being in the military and VA loans). Once I retired from the military, my income was over $150,000 (lots of military money is not taxed) and I could no longer deduct the passive losses for the two rental properties. This was 4 years ago. Florida property is positive cash flow each month, but I have over $27,000 in passive losses in the last 4 years. Mortgage will be paid off in 12 years. Virginia property is not positive cash flow and I take a small loss each month and I have over $75,000 is passive losses in the last 4 years. Mortgage will be paid off in 15 years. I have approximately $85,000 in equity in both properties ($170,000 combined) and they both appreciate each year since I purchased them. My questions are: 1. Once the properties are paid off, will the passive losses decrease? 2. Could I use the rental income on the properties (once the they are paid off) to offset the passive losses from previous years? 3. If so for #2, will the rental income be tax free until the passive losses are expended? Any feedback, recommendations, etc are welcome. Thanks.