Property Manager Acting Without Contract

[Tyler Segebarth]

In May of this year, I reached out to a property management company I had worked with in the past to inform them that I had a property becoming available and to request a Lease Option Only service (essentially where they find a tenant and I self-manage from there). The property manager assured me that there would be no issues and that he would initiate the process. However, I never received a contract or any paperwork from him. The property was listed and remained vacant for two months before a viable tenant was found. Once the tenant was identified, I was notified that they would be paying and signing the lease on August 2.

I reached out to the property manager on August 2 via email to confirm whether they still planned to sign. She responded later that evening, stating that the payment had been made and that the lease should be available in the portal. This confused me as I had not yet signed a lease with the tenant. It was at this point that I realized something had gone wrong.

Yesterday, the Manager called me and it became clear that they had leased the property to the tenant without my written consent. The lease that the tenant had signed was between the property manager and the tenant. My name is not in the lease at all. I had not signed any agreement authorizing management services for the property.  While there was a verbal understanding that I intended to proceed with the Lease Only Option, no formal agreement was in place. They then informed me that I could either move forward with the management services, with a nominal discount of $110 for the error, or revert to the Lease Only Option and have the lease transferred to me without any security deposit, as none was collected by the property manager.

This mistake has left me in a difficult position. I must choose between incurring substantial management fees each year or self-managing the property as I originally intended, but without the security that a deposit typically provides.

In curious if anyone knows what my legal options would be here. Do I have a case against the property manager?

[Drew Sygit]

@Tyler Segebarth if this goes to court, a judge SHOULD hold you somewhat accountable, but mostly the PMC.

Why should you be accountable? 

How did the PMC get access to your property w/o a contract?

Why didn't you follow up and ask for a contract?

How did you NOT know what was going on with YOUR property?

Because you used, "he" and "she" it appears you've dealt with 2 different people on this. How did that contribute to their error?

What is their reason for not collecting a security deposit? That is highly irregular in the industry! Are they using an SD Replacement Program of some type? Unfortunately, these programs aren't transferrable and are not offered to DIY landlords:(

All in all, this PMC gives our entire industry a bad name because they didn't have you sign a Placement Only contract. Because they are a professionally licensed business, a judge will hold them more accountable than you. Use this to get them to correct their errors.