Property Management Company Dropped The Ball

Baton Rouge, Louisiana
Managing Your Property
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Property Management Company Dropped The Ball

Jonathan Decoster
New to Real Estate · CLEVELAND, OH · Member since 2019 · 8 posts · 16 votes

I own a house down in Baton Rouge that I have a property management company that manages it. Got a call last week from my property manager saying that the tenant is moving out today, they put in a 60 day written notice mailed it to the company but it got lost in the shuffle. Property manager found the letter so the tenant did everything by the book. Now I'm in a bind to rent this house out ASAP.  I'm upset at the property manager for dropping the ball on this I live out of state and expected this to be handled. Should I expect the Property Manager company to waive management fees for the first two months of the next lease? What is a reasonable response to this? 

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Melanie ThomasBusiness Member
Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
3y

I get it, the PM company messed up by not notifying you of the tenant notice. If you did know 60 days earlier, how would that have changed things with the tenants? May be market/company specific because we do not list homes until they are 100% ready to go for the next tenant. The high season is an excellent time to have a vacancy and it will likely get rented quickly as long as you price it correctly so, don't sweat it. I would chat with your POC and let them know that these types of oversights will cause you to take your business elsewhere however I would not demand fees waived. Now if this becomes a constant problem then that's another issue entirely. Good luck & happy investing!

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  • Kaleb Foster
    Property Manager · Joplin, MO · Member since 2019 · 3 posts · 0 votes
    3y

    I would say that would depend on the Rental marker. Where we are at, we have been filling rentals within days of them being posted, sometimes before they can be posted. If that is the case in this situation, you should not miss out on much rent at all, and should not be hurting financially. If that is not the case, that would be something to work out with the company. i am sure they will sit down and talk about if-then situations and make sure you come to an agreement. 

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  • Yangbin Tong
    Dallas - Fort Worth · Member since 2021 · 12 posts · 3 votes
    3y

    That sucks, man. But the Baton Rouge rental market is in good shape as long as I can tell. Did your contract with the PM mention anything like this? I would imagine they will be willing to cover part of, if not the entire loss. This type of experience is so valuable to many of us. Please share with us how it goes. 

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  • Michael SloanBusiness Member
    Property Manager · Richardson, TX · Member since 2023 · 31 posts · 15 votes
    3y

    No one likes to get a surprise like this.  At my management company we wouldn't have shown the property to prospective tenants during that 60 days anyway.  Properties tend to show better when the tenant has moved out. It gives you a chance to complete any make ready items and have the property ready for the next tenant.  

    Other managers view it differently.  How does your manager handle it?  

    Is a letter the only way a tenant can notify them of a non renewal?  Do they have software to keep up renewals and move outs?

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  • Brad LarsenPro Member
    Property Manager · San Antonio and Austin, TX · Member since 2016 · 377 posts · 380 votes
    3y
    Quote from @Jonathan Decoster:

    I own a house down in Baton Rouge that I have a property management company that manages it. Got a call last week from my property manager saying that the tenant is moving out today, they put in a 60 day written notice mailed it to the company but it got lost in the shuffle. Property manager found the letter so the tenant did everything by the book. Now I'm in a bind to rent this house out ASAP.  I'm upset at the property manager for dropping the ball on this I live out of state and expected this to be handled. Should I expect the Property Manager company to waive management fees for the first two months of the next lease? What is a reasonable response to this? 

    Maybe they can find you a qualified tenant and you can negotiate the tenant placement fee waived as that fee is likely higher than 2 months of mgmt fees.  Best of luck to you, it is high moving season, so I would imagine they could find someone rather quickly.

    Brad

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  • Robert DaltonPro Member
    Property Manager · Waikoloa, HI · Member since 2023 · 30 posts · 10 votes
    3y

    Yeah, unfortunately probably not much you can do because I doubt any recourse is written in your contract for something like that. 

    If it was us we would try to do what is right and fair. 

    As others mentioned, I would think the place would get rented out pretty fast.  

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Jonathan Decoster:

    I doubt you could successfully sue over this, so there's really not much leverage. They made a mistake, they admitted it, and they're going to try to find you a renter quickly. In today's market, that shouldn't be hard and your losses, if any, will probably be minimal.

    I would wait to see what they do. Maybe they'll place a renter within 1-2 weeks, which is what you would expect even if they followed their processes perfectly. In that case, I wouldn't complain. If the unit sits vacant for longer than two weeks, then you may decide to approach the PM with a request they reduce their leasing fee to compensate you for dropping the ball.

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  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
    3y

    I get it, the PM company messed up by not notifying you of the tenant notice. If you did know 60 days earlier, how would that have changed things with the tenants? May be market/company specific because we do not list homes until they are 100% ready to go for the next tenant. The high season is an excellent time to have a vacancy and it will likely get rented quickly as long as you price it correctly so, don't sweat it. I would chat with your POC and let them know that these types of oversights will cause you to take your business elsewhere however I would not demand fees waived. Now if this becomes a constant problem then that's another issue entirely. Good luck & happy investing!

    [email protected]
    RentWerx Property Management4.73296 Reviews
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  • Amy VergesBusiness Member
    Investor · Baton Rouge, LA · Member since 2014 · 128 posts · 138 votes
    3y

    I agree with most of what others have said above. It's definitely a bummer, but I'm glad the PM was up front with you and admitted the mistake. However like a few others have said, I don't show properties until they are vacant and ready for the next tenant (I own 16 of my own units and a PM company in Baton Rouge). Sometimes we will "pre-list" and start a waitlist if we have professional photos from the previous turnover, but otherwise it's not usually fruitful to show a property while it's still occupied in this market. I would probably wait to see if the PM is still able to lease it out quickly for you, but if their mistake caused any delay, I think it's totally reasonable to ask for a month or two of waived management fees. I would feel comfortable doing that as a PM.

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  • Phillip AustinPro Member
    Property Manager · Denver, CO · Member since 2023 · 236 posts · 204 votes
    3y

    @Jonathan Decoster Mistakes happen! If they're unable to lease it quickly and you incur additional vacancy because of THEIR mistake then, yes, you should ask for compensation in the form of a discounted leasing fee.

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  • Bill Bouillon
    Member since 2023 · 3 posts · 2 votes
    3y

    I’m interested in getting into rental investing in the area. Any tips on a good Property Management Company in the area?

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  • Nathan McBride
    Real Estate Agent · Baton Rouge, LA · Member since 2017 · 82 posts · 85 votes
    3y

    Yes, that is an unfortunate situation, but it does sound like they are trying to make it right. 

    The good thing is you are now at the height of the annual rent cycle, so you should be able to find a new tenant relatively quickly.

    From my mgmt company's perspective, we do not show units that are occupied, but we do pre-lease units ahead of move-out.

    I would recommend getting some professional photos taken for use in pre-leasing in the future.  I would also like to point out that our mgmt co includes that in our leasing fee ;)

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