Legal action against PM

[Adam Orlebeck]

I am an out of state investor. I am in CA and I have a SFH in Ft. Worth, TX. I hired a PM in June 2020 and all had been ok until November 2020. November's rent payment to me was not made and called / emailed and received excuses like system glitches. I have been hounding them and since Thanksgiving they have not returned calls or emails. Company uses Buildium so I can see the rent has been getting paid by tenants. Nov, Dec, and Jan all have been paid in full to PM. I filed a complaint with TREC (Texas Real Estate Commission) and am waiting on their findings. I have also contacted an attorney. The attorney's retainer is more than I am owed in rent so I am wondering what I can do myself before incurring more costs? What is the best way to contact tenant to advise them not to pay PM and send rent directly to me? If that is even legal as I have never owned property outside CA or used a PM before. If I was to cut off PM from tenant, would I be opening myself up to any backlash or lawsuits as a breach of contract since I signed year long PM Agreement? Any help would be greatly appreciated.

[Corby Goade]

You might start with just hiring an RE attorney to send a letter to the PM, that might solve your current issue and should only cost a couple hundred bucks. 

I would not reach out directly to the tenant for many reasons. Your contract with your PM should have a clause where you can terminate for non-performance within 30 days- I would do that asap. 

As for collection, I don't know what the max for small claims is in Texas- it's $5k in Idaho, so you can handle all of that paperwork and go to court on your own as long as your claim is under that threshold. 

Sorry you are dealing with this- hopefully you'll have a quick and painless resolution.