Landlord bypassing property manager?

Question

Having survived into my 80s, and having been a member of many different organizations and party to a number of contracts, I know that "bypassing the chain of command" is a universal issue.  Happens a lot in the wider world.

I have a friend who is an independent property manager with maybe 10 - 20 clients at any one time.  She is a very conscientious person who puts considerable effort into upholding her responsibilities.

She repeatedly reports having landlords, (her clients,) bypass her position as property manager, going directly to tenants and/or contractors.

In addition to reducing her income, this is, naturally, difficult to work around, and is also going to happen again.

Being that this isn't uncommon, has anyone on this forum come across some contract clauses which anticipate this happening, and lay out procedures for handling this problem which are satisfactory to both property managers and landlords?

Thanks for advice on this.

Eleanor White

Nathan Gesner · Answer

There are many reasons why Owner-Tenant communication is problematic. Your friend needs to get control by putting all Landlords on notice that there should be NO communication between Tenant and Landlord.

Harry Heist is an attorney/investor in Florida. I recommend you share this video with your friend and she can share it with all her Landlords.

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Greg Scott · Answer

Eleanor:

I"ve had over a dozen single family properties run by property managers over many years.  I've never felt a need to break the chain of command.  With that in mind, I have to believe your friend is part of the problem.  She should first look to her own behaviors and see if she is creating a situation that encourages owns to talk directly with the tenants and contractors.

If I were her, I would ask myself these questions:

- Is my communication prompt, thorough, and concise?  If the owners don't feel like they know what is going on, they will protect their investment.

- Am I sharing too much information?  Frankly, my property managers never told me the names of my tenants, let alone their phone numbers.  I'm sure I could find a way to get in touch if I wanted, but they never made it easy.

- Am I over-charging for some services?  I love when my property manager handles minor repairs without my involvement.  Charging me a few bucks for that doesn't bother me in the least.  On those occasions where it was clear the property manager was paying way too much, I found my own contractor and put them in touch with my property manager to coordinate repairs

- Have I cultivated the right clients?  Most remote landlords I know hire property managers because they don't want to be involved.   If she is taking on clients that previously self-managed, there is probably a part of them that likes to be involved with residents.   If that is the case, she should see if there is some balance that let's them scratch that itch without interfering with her business

Drew Sygit · Answer

She may be engaging with the wrong types of ownes. There are some that think they are hiring personal assistants

Bill B. · Answer

That’s your friend’s problem though. It is a VERY RARE problem for other property managers, and not because of some clause in some contract.

As the saying goes, if everyone you meet all day is a “jerk”, maybe it’s not them.

Does she think she can just add this clause and the problems she’s causing will just go away? It’s way more likely those clients will just go away. So she should just separate from them if she doesn’t want to change.

25 years with a dozen plus problems I’ve only been involved with insurance claims, large repairs, and out of line estimates. Until the tennant has one of these problems I don’t know their name or number, why would I?

Wendy Man · Answer

@Eleanor Weiss Saw this thread and thought of your friend.  Not on point but may be an interesting read.  https://www.biggerpockets.com/...

Wendy Man · Answer

It seems that Tenant-Owner communications and Contractor-Owner communications seem to be in two different categories, and most of the comments are about Tenant-Owner communications leading to problems.  What do people think about Contractor-Owner communications for larger jobs (improvements not maintenance/repairs.)?

Our Property Management agreement is pretty clear that Property Manager can order maintenance or repairs under a certain $ amount at their discretion.  $ amounts that are greater would require Owner approval.  It is also very clear that the Owner can use whichever third party provider the Owner would like, and we have had to use that every so often -- because sometimes the Property Manager's contacts are good fits and sometimes not.

Eleanor Weiss · Answer

Thanks so much, folks.  I'm going to try to get my property manager friend to sign on here so she can provide best detail.

As I've heard during recent years, her primary issue is when the landlord enters the picture with contractors, tenants too, but not so much.

And it seems to me as if one primary client (landlord) has interacted with contractors for some time, and is accustomed to that type of management.

As to the CLAUSE I mentioned, I had hoped that because this is not a rare problem, someone would have come up with a clause that's workable for both landlords and property managers.  My guess is that someone, somewhere has a good clause, or informal procedure, which works OK.

Eleanor White

Khari F. · Answer

Minor repairs up to how much? Is there approval process for repairs over certain cost? What clause do you recommend? I assume landlord should be able to identify and contact any tenant via online portal

Landlord bypassing property manager?

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