Property management probably go out of business, what to do?

Question

Hello all, first time poster, newbie in real estate investing.
          
          I rented my townhouse via a property management company since Jan 2009. I usually recieve a check for the rent and a monthly statement from them by 10th of every month. Today is the 18th and I haven't recieved the check so I tried to emailed them, no reply... then I tried their website, it's gone, the domain name is up for sale... then I tried to call their office numbers and 24-hour services number, service has been disconnected....
          
          not good...
          
          1) What should I do next?
          2) In addtion to Jan 2010 rent, the property management company also collected a one month security deposit from my tenant in Jan 2009, am I now responsible for the security deposit?

Thanks in advance,
          
          Yung (distressed)

Sean Corcoran · Answer

it is a crime to steal rents.  There was a property manager in my area that got busted for stealing rents from the owners.  I actually am a property manager myself in syracuse, NY.  You need to gain control of the property ASAP.  You need to find out the tenants names and numebrs.  If you don't have them you need to send letters to the house letting them know what is going on.  You need to at all costs get ahold of the tenants and get rents sent to  you immediately and not the old manager.  How far are you from the property?  If is just 1 hour you  might want to stop by the property and access the situation.  As for maintenace, I would start looking around for a maintenace guy just to fix a few things.  Once you feel comfortable with the tenant and your property them I would look for a property manager to take over once you have things under control and understand what is actually going on with your property.

Bill Gulley · Answer

Hi, I'd spend the rest of today finding another management company and put them in place. If they don't have a phone that is active, chances are they are in violation of the real estate laws in that state and grounds for you to change managers. Next, I would call the real estate commission and report the incident, see if they just moved or where they are. Maybe they are just gone! Report to them that your rents were not received. This will be civil matter at first so follow the suggestions of the real estate commission. Alos, a new management company might fill you in as to what's going on locally too. One other thing, if you have records of an old check from them, you can call that bank and ask if a check in the amount you are due would clear, they will say yes or no, this will tell you if the account is still open or if they closed it and maybe skipped town. Lot's of things you can do, but I'd start there. Bill

Ho-Ching Yung · Answer

I finally got my check!
what happen was
- the original owner of the PM company sold the company to her son.
- her son then sold it to someone else.
- one of the girl who worked their for long time got fired.
- the other girl broke her leg and rest at home for a month.
- they are moving to a smaller office
all of above happen within the same month and I believe them.

I still want out of the contract so they agreed and they let me out without charging me any penalty to break the contract.

all is good right now, I guess I will start reading on how to manage my own property!

Shanti S. · Answer

Glad you got a story anyway :-)  There is a lot of good reading on here - you don't mention what state you're from...
          
          If you're convinced you want to do the management yourself but don't know much about it you might talk to a local landlord association, REIA group, or even an attorney for a quick consultation on some key points of where you might really be exposed, being a newbie.

It's not rocket science, but you don't want to get on the wrong side of a tenant who knows much more about their tenant rights in your state than you do!

Jon Holdman · Answer

Yet another reason to avoid PM's, then.

Sean Corcoran · Answer

getting money from the old PM is going to be very difficult and you need to focus your efforts on getting the property under your control.

Ho-Ching Yung · Answer

Thanks everyone,

I finally got a hold of someone in the property management company. The lady answered the phone said the check was issued back in late Dec and she will check with the management this afternoon regarding the sent date. However, she couldnâ€™t explain to me why the website, email and emergency phone numbers were and still are not working.

So today I had talk to my tenant, and looks like I am going to sign a lease with her and manage this property myself, this is my only rental property and its only 40 miles away so  hopefully won't be too bad.

Part of her rent comes from the Section 8 voucher so I am in the proccess of working with MBQ Maryland to transfer it over to my name.

Hopefully I can get the deposit, Dec rent and Jan rent back from the PM...  (I forgot that they send out check for Dec rent on Dec 25, so they actucally owe me 2 months of rent)

H. M. · Answer

I couldn't agree more!  This should be your #1 priority.

Good luck getting any monies owed you ie. sec. deposits or rent paid.  Yes, it is a crime to steal money-but, even if they were tracked down and you were awarded restitution, it would still be up to you to collect.  It's impossible to get blood from a rock.

Try to get a warm lead on your next PM from someone who is satisfied with whoever they are using.

HM

Jon Holdman · Answer

That might help if you have access to that account.  If the only one with access is the MIA property manager, then I suspect you're out of luck.  I don't see why the deposit would need to be left with the PM, but I don't use a PM and perhaps that's standard practice.

Property management probably go out of business, what to do?

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