Author Topic: Advice on property manager situation  (Read 3036 times)

catmustache

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Advice on property manager situation
« on: February 04, 2015, 09:58:32 AM »
This is a little long and I'm a baby investor, so I apologize for lack of clarity/relevance.

I recently bought my first investment property out of state and hired some property managers that seemed okay. After about 2 months, I found out from a friend who lives out there that none of the utilities had been turned on, even though I had set up the appointments with the companies and passed on the information to the management company and that the property wasn't actually listed for rent. I tried to call the property managers and got the run-around (it's been slow; it's totally listed on an obscure website, etc.). Finally, I got annoyed by the whole thing and flew out to get my utilities turned on and to meet with the property managers in person since they weren't answering my calls or emails. After skipping out on two meetings with about 30 minutes notice, I told them that I was dissatisfied with their service. The woman freaked out, yelled at me for 10 minutes and told me I was unreasonable, that she would have taken care of things and that I didn't need to come out or meet with her. Then, she told me that she had tons of investors and she didn't want to work with me and that she'd be mailing me my key. She also handed out my personal email to the two applicants she'd found. I then found a new property manager who is AWESOME and is actually handling the house and telling me what permits I need and all that.

But... It's two weeks later and I still haven't received my keys from the first property manager and she hasn't taken down the two ads she made, which are listed at a different price and with different pictures than the most recent listings. I never actually received a signed contract from property manager 1 and the draft I saw didn't contain any terms on terminating the contract that I can remember. It'd be nice to actually be able to look at the contract, but alas. They couldn't figure that out either.

So at this point, I'm a little worried. How do I make sure the contract with the first manager is actually terminated? The last thing I want is to be dragged into court for breach of contract and required to pay whatever made-up expenses property manager 1 claims to have expended. No money actually ever exchanged hands since she was supposed to have the first month as payment and 8% of subsequent rents. I don't have a physical address for them so I can't really mail them anything.

I definitely never want to do business with them again since I feel like they cost me a ton of money (it's been two weeks since I got a new manager and the property is about rented pending a successful background check and repairs to the house that popped up under the reign of PM1), so how can I figure that out?

Thoughtful Mule

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Re: Advice on property manager situation
« Reply #1 on: February 04, 2015, 11:57:28 AM »
Wow.  I am always amazed when I hear stories about terrible property managers.  It is not that difficult of a job, but does require a solid amount of honesty and integrity.  There is an inherent conflict of interest in that PMs get paid by placing tenants, so high turnover is profitable for them (but not us).  In your case, I'm surprised that they didn't even put forth the basic effort to market your property since this would be their first payday.  You did the right thing by going out there and taking control of the situation.  I cant comment on your contractual agreement.  Perhaps you might speak to a lawyer.

LadyStache

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Re: Advice on property manager situation
« Reply #2 on: February 04, 2015, 12:22:42 PM »
Can you have your new property manager change the locks?

catmustache

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Re: Advice on property manager situation
« Reply #3 on: February 04, 2015, 12:58:36 PM »
Right now, there's a lockbox on the property so that people can do showings, so I don't think they can get in. I'm a little surprised that they didn't do much work too. I think they have it as kind of a side business from home, I think. I just hope they don't try to get me to pay them any extra money.

SantaFeSteve

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Re: Advice on property manager situation
« Reply #4 on: February 04, 2015, 01:11:17 PM »
I would write up a brief document stating that you are cancelling the contract as of the date you notified them and that you have no financial obligation to them.  Have it notarized and then send a copy via certified mail to them.

All as a CYA

catmustache

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Re: Advice on property manager situation
« Reply #5 on: February 05, 2015, 11:50:46 AM »
Good idea. I think I'll try that.

jmusic

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Re: Advice on property manager situation
« Reply #6 on: February 05, 2015, 01:09:13 PM »
Also send a "Cease and Desist" letter regarding the marketing.  They might just be using your ad to redirect to other properties they manage.

Examples online are pretty skinny, but here's one I found...

http://www.101businessletter.com/complaint-letters/deceptive-advertising.php

theoverlook

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Re: Advice on property manager situation
« Reply #7 on: February 05, 2015, 01:11:08 PM »
Right now, there's a lockbox on the property so that people can do showings, so I don't think they can get in. I'm a little surprised that they didn't do much work too. I think they have it as kind of a side business from home, I think. I just hope they don't try to get me to pay them any extra money.

A lockbox is just literally a locked box with a key in it to allow people to access the property - they unlock it using a code or app on their smart phone depending on the box.  It does not keep someone with a key from entering the property.

escolegrove

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Re: Advice on property manager situation
« Reply #8 on: February 06, 2015, 09:57:17 AM »
I would put everything in writing. I like the cease and desist idea. Sorry for what you are going through but don't give up!

Good luck :)