Dead lawn due to lack of watering on vacant property considered PM negligence?

Question

Hello BP Folks! A month ago I closed on my first rental property and I am already feeling the pains of working with a lackluster Property Management company.

I purchased a new construction SFH in Northern Dallas through a turnkey company. The same company that handled the acquisition has an in-house property management team that we are working with. There were some red flags during the acquisition process but their PM team has proven to be flat out mediocre. Brand new sod was installed on the day we closed escrow on the property. I got VERBAL confirmation on several occasions from the turnkey company's acquisition team that upon closing, the property management team would hire a lawn care company to mow and water the new sod while the property was vacant. A month later, I sent the property is still vacant and the lawn was never watered so it is completely dead. As an out of state investor, I cannot personally manage the property, hence why I hired a PM.

I found out about the state of the lawn through a friend that did me the favor to drive to the property to check it out. She also found that ALL the entry doors to the property were unlocked, the AC was on (set to 71 degrees), and the lights were on in the garage and a couple of rooms. Anyone can go in and out completely undetected.

Does a dead lawn due to lack of watering in addition to the lack of basic property security and reckless waste of utilities (AC and lights) constitute negligence/breach of duty on the property manager's part? I am wondering if we have the grounds to pursue any legal recourse if the PM company refuses to take accountability for the existing property damage (dead grass) and potential threat of an unsecured property.

Your advice/opinion is greatly appreciated.

Russell Brazil · Answer

If lawn care was part of the Agreement, then that's unacceptable.

Property not being secured is unacceptable.

AC and lights on....we'll that's expected. It's the summer. You can have the AC off if you're showing properties to prospective tenants.

Chris Seveney · Answer

@Claudia Stewart

If it was in the agreement or discussed I would get them to take care of it then send them termination letter due to leaving property unlocked etc

Hopefully you have a tenant in there now

Bruce Lynn · Answer

Somewhat unusual, but not surprising.  Sorry for the trouble.  PM is a challenge.

Not sure why you need turnkey to buy new construction, but what is done is done.

I would think almost new construction in DFW has a sprinkler system.  Kind of set it and forget it.  Did you get a sprinkler system?  If not probably good idea to install to protect your foundation.  Get a lockable controller and set it and lock it, so tenants don't turn it off.  PM can adjust during the winter as needed.  You still need to water during the winter to protect your foundation, even when the grass is dormant.   The best system will include today, soaker hoses to water foundation, not just spray heads.

If there is no sprinkler, I would think it is not easy or cheap to hire someone to water.  Probably a good solution on a new lawn would be a system of hoses or PVC setup of sprinklers on some kind of timer. Maybe they are out there, but I just can't think of any lawn service that is going to go by 3-4-5 times a week to turn off and on and move around sprinklers to get your sod going.

If it is Bermuda, there is some chance you can start watering the heck out of it and it will survive.  Right now is probably prime growing season when it starts to cool off a bit, but water, fertilizer and weed killer, and weekly mowing is key.

Some PMs are great some not great, some are horrible.  All your issues are pretty common.  Do they allow self showings or require an agent to be present?  Agents tend to lock stuff up.  Personally I would never use a PM that allows self showings as stuff like this is common.  Next thing you know someone will move in and squat on you.  Can they go by and check lights and thermostat after every showing?  Probably not, without a fee.  I would make sure they have a blue ibox on the property, not a Rently or combo box on it.  That's to their advantage, not yours.

My guess is damage will be tough to recover.  Do you have grounds to terminate PM and change?  Maybe?  I would ask for a no fee termination and get a new PM if you are unhappy.  This is the honeymoon period, doesn't get any better than this.  Also just FYI there are some PM companies the tenants are now well known to tenants.  They call and ask who is the PM.  If it is X company they have no interest.  Same with me, they don't answer the phone, don't return calls, every property I have gone to is dirty and not rent ready.  Nice people, knowledgeable people, but less diligent on the PM side.  If I'm calling them it is because I have a tenant that wants to rent.  If I can't get info quickly, then we just move on.

Call their tenant line.  See if anyone answers.  See if anyone calls back.  Visit the website, leave an inquiry.  See if anyone returns the email/text.  That's another test for you.

Where is the property?

Todd Jones · Answer

This.

Without question, immediate find another PM. Even if they get a tenant in, what service do they provide per the agreement? How many times will they visit, etc? If a business is willing to state something verbally, they should have no problem putting it in writing with the details e.g., “Sounds great! Where is it at in the agreement?”

Same thing happened to me years ago. Bought a new construction in a very hot area (both temperature and housing market). I told the PM numerous times verbally and in emails “It has a sprinkler system. Please make sure it remains on.” The grass? Thick, green carpet. Strong blades. Looked award winning. A couple months later, I made a surprise visit. The grass? Wasteland. Not one blade. Only occasional weeds the size of people. I asked the PM:

Me: “Why is the grass gone? Why wasn’t the sprinkler system on? Did the tenant turn it off?!”PM: “Oh, it has a sprinkler system?”Then a guy sitting down said “Yea you have to water the grass every 6 hours or it will die in 5 days”.

I since sold the home. On Google maps, grass is still gone and I’m not so good shape.

Nathan Gesner · Answer

I hope you have this agreement in writing. If not, your case may be difficult to prove.

They should take responsibility for the lawn, security, and utility abuse. It makes sense to keep A/C on for showings in the summer heat of Dallas, but they could turn it up to 80 degrees. They definitely should turn the lights off and secure the property.

They aren't professionals. Here's what I would do:

1. Start looking for a new PM immediately. I'll provide some suggestions below.

2. At the same time, contact the current PM - in writing - and remind them of their responsibilities. Let them know you intend to hold them liable for the lawn damage and excess utility use. I would also let them know you are looking for a new PM.

3. If they don't make it right, report them to the Texas Real Estate Commission: https://www.trec.texas.gov/public/how-file-complaint

4. Transfer management to a new PM as soon as one is located.

Remember: cheaper doesn't mean you'll make more money.Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

Claudia Stewart · Answer

Thank you for your thoughtful advice Bruce! You are absolutely right about installing a sprinkler system. I'm working on that ASAP. I have a call scheduled with the PM team this week to discuss the situation and lay the groundwork for terminating the contract. I like your advice on vetting future PMs from a tenant's POV, I'll add that to my due diligence process. Thanks again!

Claudia Stewart · Answer

Thank you for your input and experience Adam!

Drew Sygit · Answer

@Claudia Stewart what does your management contract state about lawncare?

How did you fund the ongoing maintenance needed for the lawn?

Regarding the unlocked doors and the rest, the public would be surprised how shoddy agents treat houses when they show them! Unfortunately, very common for all these things to happen and not really the PMCs fault.

Theresa Harris · Answer

I'm not sure I'd call that a mediocre PM.  If the house is still vacant and they haven't secured a new tenant, get a new PM now that will get it rented.  A brand new house shouldn't take too long to rent especially if it is in a good area.

For the lawn, does it have underground sprinklers? That is your best bet to ensure it is watered regularly.  If not, set up a sprinkler and use a timer on the hose and hope it comes back (grass can be more resistant than you think).

Ann Marie Brennan · Answer

I'm sorry that you had to deal with these problems on your first rental.  In addition to the good advice given you might consider reaching out to the turnkey company who handled the sale.  They want to know about the performance of the in house property management and may be able to offer a solution.

Dead lawn due to lack of watering on vacant property considered PM negligence?

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