Would You Fire Your PM Over Outragous Maintenance Costs?

Question

Greerings All,

I have a couple of PMs in different areas and one particular I'm having issues with is a big box franchise one.

I'm a nutshell they are charging 2 to 4 times on any fix I have them do. It has gotten to the point now any time there is a fix I have to step in and send my own handyman or contractor.

As an example,  when they first rented out on of the places they sent their vendor for a leaking toilet. The quote you ask? 1200....I was blown away he said there was a leak in the bathtub as well as the toilet. A tile needed to be put back (drop ceilings) and there were two electrical issues. I stepped in sent my handy man. He charged less than $300 to fix everything and some other items...and he confirmed there was no leak in the bathtub. I was livid and felt lied to. And the kicker was they wanted to charge $150 diagnostic fee. I called the PM he said he would look into the company and I would not have to pay the fee...ok cool hope is restored in them.

Example 2: they wanted 300-400 to fix broken glass in door. I again stepped in and got it done for less than 100 bucks.

Example 3: just a couple days ago tenants said water came into the basement, PM said it's a blocked drain. They sent their vendor out there to snake it guess the cost?......$575...to sneak a basement drain...I said noway!!! I'll send my guy he can do it for $175. PM says ok then calls back 2 mins later. The vendor said since he is there already he can do it for $175. This sent  red flags  flying this feels like example 1 all over again. There was some remediation in the basement  that had to be done which I had my guy step in and do. I asked him to check the drain and he said there was no evidence of the drain being touched and he couldn't even remove it (possibly cemented in he said) and according to the tenant "No work had been done they just took pictures of the carper".

What leg do I have to stand on in firing them? If there is a contact between us that states they are owed a certain amount of monies for early termination. But they also are not holding up to what they promised. Which is being an effective manager and looking out for my best interest.

Or would y'all. It fire them?

Look forward to hearing the response.

Tariq

Carleen L. · Answer

If you have such a good relationship with a contractor you trust, what function does the property manager serve?  You can hire a leasing agent when you have a vacancy if you don’t feel up to the task, and a bookkeeper to do any work you don’t feel like doing. Sounds like you are ready to self-manage!

Amy Little · Answer

I second @Caleb Heimsoth....terminate them and find someone else. I'd also recommend the book Landlording on Autopilot. This guy set up a great system that enabled him to landlord his own properties. if you are already sending over your contractors to do the work, running the PM side of things might not be so bad.

Nathan Gesner · Answer

You need to read your lease. It should clearly spell out what circumstances allow you to fire the PM. Regardless of what the contract states, I would contact the PM with the same details you've provided here. Tell them you are unhappy with their poor service and wish to terminate the contract. They shouldn't charge a termination fee because you have grounds for termination.

Let us know how it goes.

Krishna Chava · Answer

I will second @Carleen Lansford. fire your property manager and self-manage. I was in your exact shoes 3 years ago and self-managing was the best decision of my real estate career. There is a lot of technology available to help you manage your properties. Once piece of advice I have is spend a lot of time when screening and selecting tenants, don't outsource this task. This will pay back in spades.

Katie Stewart · Answer

I agree with Amy. It may be smarter to just take on the role of the PM after you terminate your contract. There is free landlord software out there that can make the management side of things easier. If you need any recommendations, please feel free to reach out to me through personal message!

Timmi Ryerson · Answer

I have had the same experience, many years ago.  I had a contract and brought an accountant in to audit the books for my account because the expenses for repairs and turns were so high.  My units were 2 and three bedrooms with about 8 windows which had blinds.  He was caught ordering 48 blinds on my dime for properties that were not mine. Also found that they replaced area vinyl under at kitchen table with a completely different style and color of vinyl...looked horrible and I ended up redoing the whole unit.  So I cancelled the contract and he sued me.  I presented the facts to the judge and lost the case.

So first, I am going to recommend that you read your contract very carefully.  If there is no weasel clause for you, can you take over and supervise all of the repairs until your contract is up for renewal?   If so,  I suggest that you do all repairs until your contract is up and then I would fire them summarily.  Second, in the contract is there wording about them marking up the repairs to cover their time?  If so, they can do as they wish.  If not, you have a case for approving any repair ordered by them and I would carefully watch the cost and length of time they take to do turns and get a new tenant in.  Should not be more that a few days at the most.

Your dilemma is exactly why I took my properties back and developed a software to simplify management so I can do it myself.  Good Luck

Would You Fire Your PM Over Outragous Maintenance Costs?

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