All Forum Posts by: Account Closed

@Account Closed

Credit cards don't bounce six months after the fact.  The transactions are authorized in real time and batch processed at night.  If your PM is saying it "bounced," well I'm not surprised that you and they are in this situation.

If the more-likely scenario of a "chargeback" occurred, then you need to write a letter to the PM asking that they provide, within x number of business days,

a) the initial chargeback notice from the card processor, which must state the date of the chargeback, the reason for the chargeback, and the date given by the processor as the deadline to respond to the chargeback.

b) Any documented attempts to resolve this with the tenant outside of the chargeback process, once the chargeback is initiated and prior to the deadline given by the card processor to respond to the chargeback.  This is possible, as the tenant/requestor can rescind the chargeback.

c) Any documented attempts to further resolve this with the tenant after the chargeback was completed (meaning the card processor either denied the PM's response, or the PM didn't respond in time) and prior to their contacting you to request that you pay them "back."  One assumes that even if the tenant won the chargeback, the rent was still due.  The PM's responsibility to you is collect that rent, regardless of whether the initial payment was made with bad money (which could be a declined credit card, a bounced check, or even a counterfeit bill.)

My suspicion is that the PM will not be able to provide these documents, and is hoping that you will just pay what they say you own them.  I believe it is well within your rights to request this simple documentation, as your agent/PM's primary responsibility is to collect and disburse your rents.

Good luck.  We'll all be eager to know what happens next, I'm sure.

The PM is responsible for rent collection. Once they receive funds, they transfer the funds to the owner. No PM transfers uncleared checks for example. If the PM used CC to collect rent then they assumed the risk of dealing with the CC company. Maybe no one expected a reversal after six months and this should be easily resolved by the PM with the CC company. The ex owner did not get the funds from Visa and doesn't need to deal with them. The PM did and can recover the funds from the CC by showing documentation that the payment was legitimate. That is the correct resolution for this matter. The PM just is lazy and doesn't want to fight with Visa and is going for the easy route of claiming from ex owner.

It would seem to me that the correct action would be for the PM to do what it needs to do to collect the rent.  

If the tenant is still in the property then give them a notice that they need to pay or quit, and go through the process like they did not pay their rent, because they did not.   

And if they are not longer a tenant, find them and take them to small claims court.

The PM should do its job, collect the rent, not ask the owner to pay the rent.

If the PM suddenly realized that they didn't send you a $1200 payment from 6 months ago and they wanted to send you the money now, would you tell them to send that money to the new owner? 

You owe them the money and I'd be stunned if your contract with them didn't clearly state this. 

@Alec Weissgerber

What I’m unclear on is, did this bounce 6 months ago and they didn’t notice till now or did a tenant challenge a charge 6 months after the fact? I’d think that if they provide valid info to the credit card company showing it’s owed it would be reversed. If it’s a new problem I’d honor it with the PM but fight the CC company within a reasonable amount of effort. If their accounting is that out of date I’d say it’s on them at this point.

That's a good point....maybe I should see if they are charging me their PM fee in addition to the rent?

But if the rent went to you through the PM company,  when the tenant reversed the charges, the PM would be out their fee plus cost of the rent.  All charges, not just their fee would have been reversed.

At the time he sold the property, everything was clean. The tenant reversed the payment months after closing. Why would the seller be responsible for something he didn't do on a property he doesn't own

 See that's what I think...but the PM agreement says they can come after any wages that transacted during the time of the contract....