Who is responsible for destruction to property, the PM or Owner

Question

Hello Everyone, Recently in one of my STR homes, the tenants cause major destruction to the property.  It looks like they rented it for 2 days and went wild.  Holes in walls, broken bathtubs, smoking weeds in the house, and a stolen 75inch TV.

I am completely hands off on this property.  I have a PM that deals with everything from leasing, to cleaning, to checking the house, to payment.  I was never informed of this damage, but only saw that my monthly statement was much lower than expected.  Deducted from my earnings was a Police report, extra cleaning, repairs, and a new TV.

My question is why am I being charged for these items when it was clearly the fault of the PM to properly vet the tenants.  Is this normal?  There is a pending investigation from Airbnb to recoup some of the funds.

Feed back is greatly appreciated, so thank you!

Collin Hays · Answer

Property Managers do not "vet" tenants, and any property manager that tells you they do is lying to you.  Nor is a Property Manager responsible in any way for damage to your property, any more than you would be responsible for the Property Manager's computer crashing.  Furthermore, aside from competent rental policies, age limits, and credit card requirements, I don't know how one would hope to "vet" a guest to prevent damage.

Unfortunately, these things can and do happen on occasion, and it is the Property Manager's job to mitigate the damages by trying to charge the guest for damages (and many times this is unsuccessful), and get repairs made as quickly as possible to avoid further revenue loss.

Instead of focusing on blaming and transferring your damages, use your energies to work with the PM to get your property back to renting ASAP.

Russell Brazil · Answer

The owner is responsible. This isnt even a gray area, its black and white.

Nathan Gesner · Answer

Sorry about that. I was answering a lot of questions this morning and didn't pay attention to it being a STR.

I have a STR and I used to manage 65 of them. We always kept a credit card on file and would charge the damages to their card. If no card, we would send them to collections.

Nathan Gesner · Answer

I get the feeling you jumped on this forum first, rather than talking to your PM. You have someone managing an expensive asset for you. They have a contractual and legal obligation to work in your best interest. You need to figure out how to communicate with them and learn how they manage your investment.

When a tenant causes damage, it's the tenant's responsibility to pay. They should have a security deposit. The PM completes the work, charges the security deposit, and pays the contractors. You may see it on your monthly statement as an expense, but then also as an income so it balances out and costs you nothing. If the expenses are more than the deposit will cover, then you have to pay the difference to ensure the work is done. Your Agreement should require the PM to contact you for permission before spending any of your money. For example, my PM Agreement states I will contact the Landlord for permission before I spend anything over $250. If I am spending the Tenant's money, then there's no obligation for me to contact the Landlord for permission.

Michael Mignogno · Answer

Thanks for the help Nathan, I have been in discussion with the PM routinely. They are a good company and seemed to dropped the ball on this specific case where they didn't contact me in order to make repairs faster. I am not sure if you use AirBnB for STR, but there is no security deposit for short stays, so there is no way to directly charge a tenant for the damages. Airbnb needs to first conduct and investigation and if the findings are in favor of the owner, then they will then charge the tenant. Unfortunately this take a lot of time and things need to be repaired quickly so the charges upfront a directly taken out of my profits.

Michael Mignogno · Answer

Well in that case I wish you were managing this unit.  Funds would have been recouped, reno done and moving on

Trish Mccoy · Answer

You are responsible because it is you home.

Even with the proper vetting - you can still get a bad tenant

I don't use a PM and vet everyone myself - I find that if it not your home then there is less vested interested into putting extra effort into booking someone - regardless it's your home so you bare the brunt unless there is an agreement that say otherwise.

Andrew Steffens · Answer

We manage 60 or so properties in Tampa area.  About 20 of them are owned by me or my partner.  I treat every house/guest the same regardless of the property and that has served me well in the 6 years we have done STR's.  However, bad things can happen.  I would think on a moral and maybe even legal standpoint you should try to see if your PM was negligent.  If for example they knew they rented the property to a large group of college kids during Spring Break, and did not mitigate risk with a security deposit or in some other way, it could be argued they are negligent or derelict in their duties.  If reasonable vetting was done, they are not responsible for damages.  Best of luck, I hope all works out.  Feel free to shoot me a message.

Andrew Steffens

Paul Sandhu · Answer

Someone got wiser.  Someone else got richer.

Keith Kyker · Answer

tough situation.  Would having a minimum stay of 3 days or more decrease the chance of this type of behavior happening in a STR?

Who is responsible for destruction to property, the PM or Owner

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