Was I ripped off by my property management?

Question

2 weeks ago, there was water leak in my rental in Austin. Last week, the property management company told me they have paid for me.

To plumber who found the leak and stop it: $3500

To remedy: $4700

It is a 1700 sqft one level sfh, I was told the leak from slab under pantry and the affected area is around 500 sqft.

Because the leak was from slab underground, my insurance doesn't cover and I have to pay every penny.

The question is: 1, I didn't get any pictures with the leak from slab

2, the tenants told me the plumber told him the leak was from bathroom somewhere above floor

3, wasn't those two things too much? The plumber spent 5 hours.

Any BPer  know whether my concerns legit?

If I was ripped off, i definitely don't want to be ripped off by some unknown lawyers again, what could I do? Any suggestions?

Thank you so much!

Nathan Gesner · Answer

There are too many unknowns, but it sure sounds wrong.

A plumber charges around $100 an hour, maybe $150 if it's a two-man crew. That's only $750 for labor. Unless they replaced your entire HVAC system, they shouldn't be charging $4,000+ in materials.

If they had to demo the concrete, replace pipes, and then replace the concrete and flooring, that could get expensive. However, it's still awfully high for a 500sq.ft. area.

Demand copies of the actual invoices. And check again with insurance. If the pipe belonged to your house, it should be covered. If the pipe belonged to the City, they may be able to cover it.

Drew Sygit · Answer

@Grace Yang what made this an emergency that didn't require your prior approval?

Check your management contract!

Yes, there should have been pics, what does your contract say about them?

Owners should do a better jog of selecting PMC's!

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Theresa Harris · Answer

That seems like a lot and the fact that your tenant said it was upstairs and NOT underground is concerning.  Go to the home or ask tenants to take photos of the slab where the PM said it happened.  I agree with Bill, there should be evidence of the slab being patched.

Bill B. · Answer

For an under slab leak I have paid $4500 TOTAL for a repipe from the water main to the house. (That’s usually the only water lines under the slab.)  (The repipe usually doesn’t go under the slab but rather underground to the side of the house closest to your main on/off. And then through a wall there.)

You definitely shouldn’t be paying $3500 plus $4700. There should be obvious pictures of torn up concrete and and ground where the new pipe was run.

You should have a max that can be spent without prior approval, and they can say this was an emergency. But the water could have just been shutoff, the tenant moved to a hotel for a few days while options were considered.

Get a copy of the invoice from the plumber look it over maybe show to another local plumber. But I would want to see a lot of torn up ground and concrete and basically a full days work for a crew of workman.

Gaby Liu · Answer

it happened to me once ,similar situation , I got bill from HOA because the house water heater leak and flood , the bill was $4000 ish, I refused to pay because they didn't inform me about this situation and just sent the plumber did the work, I argued in the CC&R that HOA can offer Owner options of different bids for the repairs, they can't go in and do the work without owner's approval.  they argued it was emergency  blah blah,well, I argued , nope , the emergency is shut off the water and have tenant move to a hotel or something.  so we back and forth email argued for months. eventually ,nothing happened , they waived the bill. and no lien on me, I sold the property few years later ,all good. so I guess you have to go back to read your contract with the property management to see how do you argue ?

Was I ripped off by my property management?

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