Tenant Chargeback all the Rents from my PM now what ?

[Michael Thach]

Hi everyone, 

I need your help. I have a property in Dallas and we let a property manager manage the property. 

2-3 Months ago the property manager found a tenant, did a backround check and told us she is ok. 

First month were already a late pay but did paid at the end. 

Now after 2-3 Months I get a phonecall from my property manager saying " The tenant has made a chargeback and got over $4000 in rent out of the property management account. " The property management also say that we have to pay them back the + $4000 since they got the charged back. 

What should I do ? How should I react in this situation ? I am worried about my property and the eviction and paying the +$4000 to my PM.

Thank you so much

Michael

[James Hamling]

@Michael Thach this whole thing doesn't make sense. First of all you have to get informed, as the RE Investor you are the CEO of your business, and what I read here is your acting more like a receptionist than a CEO, be informed and take control. 

Next, that kind of charge back makes no sense, charge-backs don't happen like that for NSF, this feels more like a tenant disputed charges with CC company as fraudulent so CC co yanked funds. STILL the PM should have no problem dealing with such a situation and the situation your explaining screams of ignorance and inexperience. If a PM can't handle such an easy issue, I'd fire them instantly. A PM is a problem solver, that's the job, one who can't solve easy problems......

The payment processing is an item set-up by the PM, and only the PM can address. I wouldn't pay the PM a dime, it's their issue to resolve and correct their processing issues. IF they did all the work, put in the effort, and showed proof that they were out of pocket and not getting $ back from processor, I would maybe split it with them 50/50 but not a snowballs chance in hell I would eat the expense for their screw-up with their payment processor on a tenant they placed, no way. And actually I'd be tearing them a new one asking how they allowed such a mess in the first place. 

And by the way, I am in Property Management, professionally, so if anything I am biased for PM's not against. We don't have this issue except very very rarely, because we are professional and have systems in place, and when it does happen we resolve it ourselves, often only informing a property owner of the issue and our solving of it, thats why it's called property MANAGEMENT and not "sitting". 

Again, step up and be the CEO or get ready for a long rough ride.