Incompetent Property Management Co.

[Jose Farias]

Hello, 

I am new to this forum. I hired a property management company to manage my rental property near Temecula, CA. They allowed the tenants to breach their contract on multiple occasions. The tenants began bouncing checks, payed rent late sometimes up to 20 days late. Also, they began to skip payments and eventually, they stopped paying altogether. I was constantly having to prompt the company to provide me with updates on their payments. They would side with the tenants saying they had some issues come up and would need an extension. The company hesitated to proceed with any further legal action and asked me to give them some time. I was extremely patient and after 4 months of no payment, I demanded from the company to do their job and file an eviction. They gave me the run around that it would take too long and asked me to give them 2 more weeks. Fast forward to 7 months, and I just got the judgement for the tenants to be evicted. They are now gone. My question is do I have any legal course of action against the property management company and would it be worth my time and money to go after them for "lack of them doing their job"? I would appreciate any input you may have. 

[Michael Smythe]

@Jose Farias what does your management contract state?

You also should have better screened the PMC before hiring them - a common mistake!

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

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, they often select the first PMC they call or that calls them back!

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!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

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😊