Tenant destroys property | Whats the PM's liability?

Question

I'll need to do quite a bit of work to get this property back and healthy. Things like carpets, blinds, doors, lights, fumigation, paint, cleaning and some landscaping.

The brunt of my frustration is at the tenants who should be sent to collections and pay for not only the missed rent but the damages. They are the ones at fault here and I get that. But as I reflect on how this situation arose I started to wonder to what degree is the property management company responsible? Ultimately, they are the ones who created the tenant requirements, found and placed the tenant, managed the tenant, and lastly are the ones paid to be care takers of the property.

COVID made home inspections harder and the tenant, knowing they were in trouble, refused to do virtual inspections so how was the PM to know? Although, repairs had happened on site, a microwave went out and a water heater was replaced so the handimen had access and didn't report anything? I'm left scratching my head.

I'm just curious on what my expectations should be for the PM's responsibility in this case. Is there common concessions others have seen that I can ask for? Would the PM consider paying for the repairs and then as the tenant pays on collections those payments get routed to the PM instead of me? I'm not quite sure how to navigate this and what my asks should be. Should the "threat of leaving" card be played to gain leverage or is that a bit tacky considering they're not a cable company.

In addition to the damages, I'll probably loose 1-2 months of rent while the repairs get underway so the financial side of things are looking grim.

Thanks for helping me understand what appropriate expectations should be.

Scott M. · Answer

Not ignoring the rest of the words you typed, but would like some clarification.  Your headline says "Tenant destroys property".

The video clip shows carpet that needs to be replaced (and hopefully not with carpet), a few (emphasis on few meaning not many) kids toys and possibly a closet door that is missing but the camera pans so fast it is hard to tell.  Also, we don't know if it was there to begin with.

How long was the tenant in the home?  Was the carpet new at that point?

Again, not avoiding your question but I think getting the facts straight is important here.  The clip you showed would in no way match the word "destroyed".  Search out a few @Nathan G. news articles to see what "destroyed" means.

Also, what city/state is the property in?  What class of property?  Ask this because if this is in a C or D class area and a handyman walked in and saw what you showed on the 12 second clip, I doubt they would report anything.  Also, if they were there to fix a microwave and hot water tank they would never even go into this room would they?

Not saying you are not 100% in the right but from what you have shown this home is not destroyed.  Also not discounting your question, just would like more info before I say more.

Nathan Gesner · Answer

I'll respond since my name was mentioned.

It looks like you had a video linked and then removed it, so I can't see what you've shared. No matter, because it sounds like the place was pretty bad.

The maintenance man isn't there to inspect, but I try to train my vendors to alert me to any unusual situations. It's not their job, but many times they have helped me out.

There are a lot of questions:

• How long did the tenant occupy?
• How many inspections were done during that time?
• Were there any red flags that were ignored (late rent, lease violations, etc.)?
• What did the PM do when the tenant refused virtual inspections?

Based on what information you've shared, I suspect the PM failed to inspect. If the tenant rejected virtual inspections, that's a red flag that would have prompted me to act immediately with a mandatory, in-person inspection and/or eviction. The length of tenancy, time since last inspection, original condition of the home, red flags, and other issues may affect how I decide.

Does your PM have liability? Read your agreement with the PM and the lease agreement. If there's a clause in there saying the PM "will" or "shall" inspect the property, verify that requirement was not met and you'll have a good case. The PM could argue they were prevented from inspecting due to COVID, but that's a weak case if they were offering/requiring virtual inspections.

COVID only shut down inspections for a limited period of time. It sounds like your damage was caused over a longer period of time and could have been caught.

That's my $0.02 based on the limited information shared.

Scott M. · Answer

No harm in asking them that is for sure.  At worst you end up right where you are at.

If you haven't you should ask them if they are open to doing inspections in the future.  Even if they charge for it, you can see it might well be worth it in the end.  And that insurance may not be a bad idea moving forward either.

As a PM we have done just what you are asking for them to do.  To cover some expenses and get paid back out of rent down the road.  Not because we did something wrong and that was our way of making up for it but because the client was nice, had a great relationship and were just in a tough spot so we helped out.  From experience I can tell you that you will have better luck if you just explain the situation.  That regardless of the paperwork you honestly thought they were doing inspections and so this really caught you off guard.

I think that is your best bet.

Drew Sygit · Answer

Let's start with agreeing that NOTHING is perfect, especially in property management.

No matter how well you screen, a tenant can go sideways due to circumstances beyond a PMC's control.

Also, tenants will try to break every system a PMC puts in place.

Communication to manage expectations is the number one job of a PMC, in our opinion.

Was your PMC communicating regularly to you about:

• inspection challenges? 
• Late payments?
• Past due rent?
• Maintenance requests?

It's always easy to second guess AFTERWARDS.

Scott M. · Answer

@Levi Koskan I get what you are asking, I think everyone does but the problem is you are not really providing enough info as I and several others have stated. You say the carpet wasn't new in your second post, but you don't say how old it was.  You provide no before/after photos for people to give an honest assessment.  And this info helps others answer the question you are asking.  Not how much should charge, we get you want to know who to blame but if your tenant lived there for 10 years and the carpet wasn't new when they moved in then that is different from the tenant lived there for 3 months and the carpet was less then 1 year old.

Facts matter.  And you are not providing them.

The video you shared that was 12 seconds long simply showed 1 bedroom that had 2 or 3 children's toys about, clearly a carpet that has to go and possibly a closet w/o a door.  You couldn't even see the walls other then the bottom 2 or 3 feet max.

What you showed was not even close to a home that was "destroyed".

Might not be important to you but if you call your PM and say the house was "destroyed" when clearly it wasn't in the video you showed you are not going to get as far as you think.  The exaggeration will not go over well.  Chances are your PM has seen a "destroyed" house.  So it may seem I am harping on your word choice, and I am, it is to help you understand that if you exaggerate to this degree when you talk to them I think you are hurting your plea for concessions.

Even with the trash out company you are not giving facts people can judge by.  They have been to the dump 3 times and have 2-3 more trips to make.  But you are not telling us what size the dump truck or dumpster is.  Do they have a 20 yard dump trailer and made 3 trips?  That is very different from 3 trips in the bed of a pickup.

Also, saying "the tenant left so much junk" - how would that be the PM's fault?  How can they possibly control what a tenant takes/leaves during their move out? Not meaning to be a jerk here but trying to help you focus on what may be and what clearly isn't in the purview of the PM.  So when you talk to them, maybe not talk about the junk that was left as that has nothing to do with them.

Also, what does your management agreement say about inspections/walkthrough's?  What did they tell you when you hired them?  Not all managers do them unless asked or paid for.  If they say they inspect 2x a year and the tenant lived there a year then I would look back at your last report and judge.  If they didn't do them I would ask why.  Might be valid reasons why.

After you look at that and determine they broke their agreement then you can talk about concessions and work with them on that.  But do your homework first and try to put the frustration you have aside for a moment and look at each item and be fair, would the manager have any control over this, if not, then don't bring it up, it will only cloud the waters.

Matthew Irish-Jones · Answer

@Levi Koskan the answer to your question is probably in your management agreement.  However, in general, PM's usually do not have liability unless there was some form of negligence by the PM.

You would also need to be able to prove the negligence.

Bruce Woodruff · Answer

If that's the case, I would expect the PM to pay something, probably even the majority of it! This is  a perfect Small Claims case...just document everything....

Levi Koskan · Answer

Thanks for your response @Nathan G., not sure what happened to the video link I posted. Looks like BP removed it after my post was live, maybe as a moderation safe guard of some sort... idk.I really appreciate the response @Scott M.. The follow up and questions you're asking is the reason why this community is so valuable. A big part of posting on a forum is knowing how to ask your question and I just didn't do that very well in this case. I apologize. Next time I'll know the extent of details to include. Despite my lack of details, folks were able to give me the high level direction of where to look to see if the PM has liability. The answer -> Review the Property Management Agreement to determine what they promised to do and then use that to assess any potential negligence. ANND an update on that point. I've reviewed my Property Management Agreement and unfortunately for me, there isn't any language around guaranteeing inspections. The best I can produce are some notes I have for when I interviewed them and asked about inspections but that will only go so far. Additionally, the PM company offered me some sort of insurance plan for covering tenant damage that exceeded the deposit amount that I declined. So, contractually, strictly speaking, they did their duty I suppose. At this point best I can do is put in a request, work with the management team at my PM company, and see what they say. There's the real possibility that this situation might sour our relationship and at that point, I'll move on and find a new company but with this experience in mind. My fault, lesson learned.

Levi Koskan · Answer

Fair, I'll expand.

Home is in Austin, TX. Single family home in middle class neighborhood. Its in the B-B+ asset class range depending on how you want to define it. That room example is simply representative of the entire 2100 sqft single family home. EVERY room, including the garage is like that. Walls and carpets have organic material rubbed in (a mixture of food, and perhaps feces IDK but it is gross). Theres no way to save the carpets. The carpets weren't new but they were in good shape. I would expect a percentage of new carpets be billed to tenants not the entire bill. A moving/cleaning company has been to the dump 3 times! 3! and still has about 2-3 more trips to go! The tenants left so much junk, if you really want to see more pictures, I have them. But this is really besides the point. I'm not asking on how to figure out how much to charge the tenants. My ask is about the PMs responsibility. Not a specific number but level of blame.

Bruce Woodruff · Answer

It is not the Handyman's responsibility to report on the property condition. Your Mgmt company should have been more proactive, perhaps (since we can't really see the property), but other than that, welcome to Landlord 101, I guess......I would certainly raise a fuss with the PM company......Hope it turns out ok

Tenant destroys property | Whats the PM's liability?

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