Section 8 Tenant Stopped Paying Water Bill

[Alex Kim]

Hi Everyone - Looking for advice!

My section 8 tenant at a property of mine in Michigan has stopped paying her water bill, ending up in an outstanding balance of thousands of dollars. My property manager has approached her and she still refuses to pay claiming "she forgot about it and now it's too high". Any suggestions for how I can handle this situation? Any advice is appreciated. Thank you!

Alex

[Drew Sygit]

@Alex Kim so many problems here!

1) Why wasn't your PMC monitoring the water bill the entire time? If the water bill is not paid, the city will sell it to the county, adding penalties & interest, then the county will add it to the property tax bill. 
*We monitor water bills for each period to avoid this issue!

2) Why isn't your PMC giving you more options, instead of you posting here on BP?
*You really need to find a better PMC to manage your asset better!

3) Has the tenant agreed to start paying the bill now?
*Tenant is lying that they forgot about it. Since your PMC didn't stay on top of it, the tenant thought they could get out of paying it!

4) Your only option now is to start the eviction process to force the tenant into some type of payment plan. 
*Doubtful you will recover full past due balance, but something may be better than nothing.

5) Your PMC should also be contacting the S8 caseworker to see if they will assist in pressuring the tenant to pay.
*Technically, the tenant has violated the HAP contract and should lose their voucher if they don't pay it. Unfortunately, this rarely happens:(

Regarding finding a better PMC:

Even if someone give you a referral, what meets their expectations, may not meet yours.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – and they often select the first PMC they call!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

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