Property Manager & invoices

[Maggie Hayes]

Hello, all! I was hoping for some guidance. Are PMs required to indicate their repair fees, or do most PMs just inflate repair prices? We had plumbing work done. The estimate provided by the PM was 1k more than the estimate provided directly to me by the vendor. When I asked, I was told that the inflated cost was to cover expected additional repairs. The final cost ended up being exactly the same as the initial vendor estimate. The PM is refusing to provide us with original receipts and invoices from the vendor. All vendors have provided me with the invoices directly in the meantime, and it turns out the PM’s bills are all inflated. I realize some PMs charge a repair fee, our contract only states “charge per item” and none of the bills indicate a management fee. They just built random numbers to various totals, not even an equal percentage across the board. They did not get multiple estimates and in one instance I told them who to bring in. We have a keypad lock and the maintenance coordinator was not on site for most repairs. Additionally, after requesting the original invoices, the PM terminated our contract because of “our continued demands that go out of the scope of normal property management”. We briefly owned an investment property years ago, and we were always provided original vendor estimates and invoices by the PM. This just feels at the very minimum unethical. Am I way off here? 

[Will Fraser]

Hi @Maggie Hayes, I'm sorry you're having these frustrations! 

Many PMs do pad their invoices and use repairs and maintenance as profit centers, and this is something that can be done with clarity and integrity, or in the exact way you've described.  It does indeed feel a bit grimy, if not flat out violating the ethos of the investor:PM relationship, but nevertheless it is prolific in the PM space.   In the future I'd try to work with PMs that you are certain are skilled and ethical, and then if those two are in place default to extending the trust those merit.

As for the invoices specifically . . . it is not uncommon for a PM company to arrange for labor from multiple subcontractors and, in essence, be a general manager or project coordinator of sorts.  Some of these subs won't have invoices and sometimes the PMs won't put the invoices because they want to safeguard their "rights on the vendor", meaning that many of our PM values ARE the vendors we work with.  We spend years and a LOT of frustrating toilsome effort building our vendor lists and for those among us that pad invoices instead of a clearly assessed Repair Coordination Fee it is also normative to zealously try to prevent the owners from being able to contact the vendors directly, or at least with ease.  Why?  for the reason's you've detailed here.

So, upgrade your PM and simplify your strife?