Property Management Firm Not Paying on time.

[Anu Anil]

We happened to buy a house and have been renting it to section 8 tenants. We have had this property for about a year now. We have been using a property management since we have brought this property.

Since Jan2015 they have not been paying on time. The cheques they gave us has bounced on us 3 times. Currently they are holding to 3 months worth payment about 2.5K. Contractually he was supposed to pay March's rent on April 10th, but the cheque he deposited bounced and we have been behind him for last couple of weeks for the payment. 

What should we do to have our money. I don't know if a lawsuit will help and if it would be worth it ( it would not be worth if it costed more than the money I have to get).

[Yishi Garrard]

I happen to own a property management company in Tucson, and we have about 380 units and about 150 owners, so I'm pretty familiar with how the owner disbursements should work. 

It sounds like this PM company is insolvent. There are a ton of small time unlicensed (and some licensed) PMs that don't have any real idea of what they're doing. PM accounting is one of the most difficult and complicated types of bookkeeping out there, and that is one of the number one reasons that you see PM companies fail. Here in Tucson, there was a big PM company that folded last year because it turned out that their accountant or internal bookkeeper or one of the partners had over time stolen several hundred thousand dollars in owner reserves, prepaid rents, tenant security deposits, etc. Lots of owners lost thousands of dollars that they had in owner reserves or prepaid rents that the PM company was holding. 

As far as your situation, I would immediately contact your state's department of real estate, and file a complaint. You should also contact the local Association of Realtors office, if they are members of it, and file a complaint there as well.