Major concerns with property manager

Major concerns with property manager

Member since 2022 · 8 posts · 1 vote

My husband and I bought a rental property in San Antonio in June 2022. Because we live out of state, we decided to use a property management company to help us manage it. We own a couple rentals closer to home in Denver that we self-manage. We decided to go with the company Bungalow Living, in part because several houses in our neighborhood in Denver were using it and they seemed successful. We also liked how well they photographed and advertised the properties. Our process of onboarding and initial communication were fairly smooth. There seemed to be some staff turnover and layoffs, but we had ample ways of reaching people to answering our questions.

They use a sort of sub-leasing model, and we signed a 2-year contract with them that ends in June 2024. They are technically our tenant who then go and find tenants. We only get paid when they have their tenants in place. They found tenants who lived there from August 1-July 31. We were not informed that they moved out or that the house was vacant (we get paid for the previous month, so we were still receiving payments through August), so we didn't know until September when we stopped getting paid. On 9/12/2023 we were told that there was a break-in at the property. All the appliances were stolen and doors and fixtures and cabinets have been severely damaged. We had also learned that in the 6 weeks that the house was vacant that they had 2 showings total, which is negligible in and of itself. As property managers ourselves, we know to adjust prices and marketing strategies when there is so little interest. Within our contract, it details the extensive liability insurance that Bungalow is to carry. We were instructed to file a police report and insurance claim. We filed the insurance claim but cannot file the police report, because the police are saying that the property manager that is able to be onsite must do so.

We have not been able to talk to anyone with Bungalow other than the maintenance and repair person who reported the problem to us. She gave us the name of our account manager (who had changed from our previous account manager, and we were not previously informed), and aside from one stock email, we have not heard a word from her. We cannot find any phone numbers with the company other than a tenant line that will not connect us with anyone else. We feel completely handcuffed in how we can proceed. We have made multiple attempts a day at emailing our account manager at the one email address we have (it is not a personal email address, it is the address for all their central properties). It appears that the company only has one account manager for all 700 properties, and there is no chain to escalate it to. Again, we do not have any phone numbers for anyone in the company. The only email contact we're told to use is the one we're using and not getting responses to. I tried to contact them as a new client, and the calendar to set up the call is completely defunct. At this point, we do not trust them and feel completely handcuffed because we need some element of communication from them on how to proceed, and we are not getting it. Meanwhile our house is sitting vacant with extensive damage and no realistic path to being rented any time soon. We do not want to do anything to break the contract illegally, but we need to be able to access the property and put an effective manager in place. We also feel like some, if not all, the liability may fall on them but need communication from them and likely legal advice in order to determine those specifics.

If anyone has any insight into this company or recommendations for next steps, please advise. 

Thank you! 


 

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Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
3y

Have a lawyer local to your rental property send the PM company a letter (I'm sure there are BP members local to the property who can recommend a good attorney - if not, use Google and Yelp and do some research). I bet the PM will reply then. 

If they don't, sue the hell out of them. If they do reply, work with your lawyer to find a solution that works for you. 

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  • Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
    3y

    Have a lawyer local to your rental property send the PM company a letter (I'm sure there are BP members local to the property who can recommend a good attorney - if not, use Google and Yelp and do some research). I bet the PM will reply then. 

    If they don't, sue the hell out of them. If they do reply, work with your lawyer to find a solution that works for you. 

  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y

    This PM company sounds like a scam. The lack of communication (especially after the break-in) is not a great sign and I agree with Karl. Feels like intentional avoidance. You have a number of reasons and clues to seek professional help. 

  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    Study the contract and figure out how they violated it and follow the termination procedures.

    While doing that, start interviewing replacement PMCs.

    Encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

    To avoid going through the same poor experience, keep reading.

    Even if someone give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.

    We also can’t believe how many owners hire the first PMC they speak with!

    Then they complain their expectations aren’t being met!

    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😊

    Logical Property Management4.9446 Reviews
  • Property Manager · DE · Member since 2023 · 248 posts · 133 votes
    3y
    Quote from @Laura Ratcliff:

    My husband and I bought a rental property in San Antonio in June 2022. Because we live out of state, we decided to use a property management company to help us manage it. We own a couple rentals closer to home in Denver that we self-manage. We decided to go with the company Bungalow Living, in part because several houses in our neighborhood in Denver were using it and they seemed successful. We also liked how well they photographed and advertised the properties. Our process of onboarding and initial communication were fairly smooth. There seemed to be some staff turnover and layoffs, but we had ample ways of reaching people to answering our questions.

    They use a sort of sub-leasing model, and we signed a 2-year contract with them that ends in June 2024. They are technically our tenant who then go and find tenants. We only get paid when they have their tenants in place. They found tenants who lived there from August 1-July 31. We were not informed that they moved out or that the house was vacant (we get paid for the previous month, so we were still receiving payments through August), so we didn't know until September when we stopped getting paid. On 9/12/2023 we were told that there was a break-in at the property. All the appliances were stolen and doors and fixtures and cabinets have been severely damaged. We had also learned that in the 6 weeks that the house was vacant that they had 2 showings total, which is negligible in and of itself. As property managers ourselves, we know to adjust prices and marketing strategies when there is so little interest. Within our contract, it details the extensive liability insurance that Bungalow is to carry. We were instructed to file a police report and insurance claim. We filed the insurance claim but cannot file the police report, because the police are saying that the property manager that is able to be onsite must do so.

    We have not been able to talk to anyone with Bungalow other than the maintenance and repair person who reported the problem to us. She gave us the name of our account manager (who had changed from our previous account manager, and we were not previously informed), and aside from one stock email, we have not heard a word from her. We cannot find any phone numbers with the company other than a tenant line that will not connect us with anyone else. We feel completely handcuffed in how we can proceed. We have made multiple attempts a day at emailing our account manager at the one email address we have (it is not a personal email address, it is the address for all their central properties). It appears that the company only has one account manager for all 700 properties, and there is no chain to escalate it to. Again, we do not have any phone numbers for anyone in the company. The only email contact we're told to use is the one we're using and not getting responses to. I tried to contact them as a new client, and the calendar to set up the call is completely defunct. At this point, we do not trust them and feel completely handcuffed because we need some element of communication from them on how to proceed, and we are not getting it. Meanwhile our house is sitting vacant with extensive damage and no realistic path to being rented any time soon. We do not want to do anything to break the contract illegally, but we need to be able to access the property and put an effective manager in place. We also feel like some, if not all, the liability may fall on them but need communication from them and likely legal advice in order to determine those specifics.

    If anyone has any insight into this company or recommendations for next steps, please advise. 

    Thank you! 


     


     Wow, so many issues here it's hard to know where to begin.  I suggest you travel there asap and get some answers in person.  Minimum - change locks if you have to, but get inside and look at the home and get a police report yourself. 

    So sorry this happened but you need to get control of the situation and remote isn't working.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    3y

    @Laura Ratcliff  what does a flight from denver to san antonio cost. Yes there are a lot of ways to do this remotely and the property manager should do it but time is money for you now and getting there ASAP will allow to file a police report, set up cameras, set up repairs, and deal with the company that you probably need to fire if they have a local presence.

  • Member since 2022 · 8 posts · 1 vote
    3y

    Thank you for the responses. In terms of screening the PMC, we did, and they were not the only company we talked with. Clearly in hindsight we made a mistake, but the company was very different a year ago than it is now. There were multiple points of contact, a robust marketing team, etc. Now it seems like it’s imploding, and we got caught up in it in ways we could not have predicted 15 months ago. 

    As for going to San Antonio, we certainly might. We also have a contact in town able to help. However, at this point we don’t even know to what extent us doing things ourselves breaks the contract. Based on our reading of the contract, Bungalow has liability here, and we’re concerned us coming in and fixing things is not the correct legal process. We are afraid of Bungalow retaliating against us if we overstep, so we want to do everything to protect ourselves. We are meeting with an attorney on Monday to discuss our options here. The fact that it is seemingly impossible to reach them has made everything nearly impossible. 

  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    3y

    I’m sorry to hear about your issues.

    If I can help, I am here to support. No desire to make any money, just sad to hear about circumstances like this.

    I’m active duty military as well and can help you with advertising tips if you decide to self-manage when the time comes.

    I wish you all the best.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y

    The first thing I would do is change the locks and give them written notice of termination.

    The next thing I would do is file a formal complaint with the Texas Board of REALTORS. https://www.texasrealestate.com/members/legal-and-ethics/eth...

    Start looking for a new PM. Find a company with a proven track record, not the newest kid on the block with a flashy website and empty promises.

    I'm searching for "Bungalow Living Property Management" and can't find a website, Google business page, or anything else. Have they shut down?

    The DIY Landlord Book4.7248 Reviews
  • Nathan MillerPro Member
    Property Manager · Grants Pass, OR · Member since 2009 · 429 posts · 201 votes
    3y

    That sounds like a very odd and abnormal scenario.  Somebody trying to play property manager that isn't really a property manager.  I'd definitely follow Nathan Gesner's advise above ASAP.

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