PM not collecting utilities from tenant

[Andre' Arceneaux]

Good Evening,

On a SFH I have as an out of state owner, I have noticed that PM has not collected utilities from tenant since they've moved in (going on 4 mos now).

I pay from my account on an auto deduction and expect reimbursement .. yet the only item paid has been rent. I recently communicated with them about the issue and they responded, showing the payments (which are mine), and the payments on the ledger show them being deducted .. FROM RENT!

I explained this nonsense in detail as to what the tenant is paying, and how the books appear in relation to that. I stated, either the rent is being paid and the utilities aren't, or the utilities are, and the rent has never been paid in full.

They didn't respond to the most recent email as it contained details as to how this accounting is being broken down via PDF, and tenant has only paid rent amount every month, and PM is not reimbursing me for prepaid utilities.

How should I handle this?? I want to fire them immediately, yet I have no idea if this constitutes a breach in the landlord broker agreement on their behalf.

Plus, I cannot self manage with the distance.

I am in California, the property is in Ohio. If I were required to give 30 days as contract states, I'd wonder if it's feasible to wait to month 7, even at this pattern, that way I will not be on the hook for any fees in breaking the agreement, if that's the case (bound by the agreement, even if not collecting utilities to reimburse to me).

They've had some other mild gaffes (communication, errant charge for landscaping I never authorized, never reimbursed me the small charge, large lapses in communication response - most recent was 12 days, and they only responded when I mentioned this fact) ... many things are gradually adding up and overall it doesn't look too good on their end.

Any suggestions as to how to go about this???

[Patricia Steiner]

Let's look at this in a slightly different way:

Your tenant has failed to pay utilities.  Therefore the tenant is in default and is subject to eviction.

Your PM has failed to issue a Notice To Quit for the non-payment.  

So first things first: the tenant has failed to pay and secondly the PM has allowed it to continue.  Technically you could have an issue in evicting when the lease has not been enforced so time is of the essence.

First check your lease to make sure that it is clear about Rent PLUS Utilities.  

Then - via certified mail with proof of delivery - send your PM notice of their failure to perform and cite your disappointment with their failure to communicate.  Send a copy of the lease and highlight the utilities noted.  Be sure you're sending the letter to your PM and the CEO if it's a corporation.  Include a Notice To Quit - in the tenant's name - indicating default in the amount of the utilities.  Advise that you will send that Notice To Quit to tenant within 3 days should the PM fail to act/respond.  Share that their failure to enforce the lease is also a violation of their contractual and professional obligation to you.  

And, this is really important:  Be factual.  Be unemotional. Don't rant.  One liners.  Don't fire them.  It's "attached is the lease indicating rent PLUS utilities is due monthly. Utilities have not been paid by the tenant nor remitted to me in "x" months. As such the tenant is in default. Enclosed is a Notice To Quit that I will send to the tenant directly within 3 days should you not choose to perform and enforce the lease.  This failure to perform is a violation of our contractual agreement and of your professional duties.  The lack of communication with me is not only disappointing but demonstrates your unwillingness to resolve this and other issues.  Please contact immediately in regards to this matter."  (Yes, we hate them and they suck...they know it; no need to share).

If you don't hear from the PM in 3 days, send the Notice To Quit to the tenant instructing that the utilities are to be paid up-to-date directly to you in order to avoid eviction.  I bet you get paid fast.  Then fire the PM under the terms of your contract.

If you do hear from the PM right away, ask them how they intend to correct this situation immediately.  Listen.  If you can change managers within the company, do it.  This one has proven to be unprofessional and quite frankly, not good at this. 

This is your business.  Be business-like and get your money.  Expect your PM to perform and don't let months go by without being paid the full due you.  Please let us know when you have your money and your PM's attention.  It'll happen very quickly.