All Forum Posts by: Account Closed

Hi BP,

I feel this post has created a lot of misunderstanding and assumptions about me as a person and as a landlord. I apologize for that happening, because all the information I gave didn't actually include a lot of the details that caused the confusion. I wanted to explain everything and make this my final post on the topic. I have learned a lot from the various replies and will be reevaluating myself as a landlord and study harder, and I thank those who have provided me with all the information.

Regarding the PM Miscommunication & expectation:
Since early on signing with this PM and then finding out he doesn't do anything he said he would do in the interview and on the PM contract, I felt cheated. But since he was taking over for another PM while the tenants were in the process of moving in, I didn't want to change the PM on them again when they are trying to settle in. Not having the tenant/landlord portals was annoying, but it wasn't annoying enough to cause my tenants confusion and the termination fee, so I was going to wait til the end of the contract and find another PM. 2 weeks after the lease executed, I noticed I was missing the pet agreement and e mailed the PM to send it to me as we were already in process to purchase another home and the lender wanted to see the lease. After 3 e mails with no replies, I cced the PM's partner in business on the e mail as well to see if he would maybe respond. Without realizing it wasn't my PM who sent him the e mail, the PM partner replied saying "asking for all the docs already, what a high maintenance ^%$#" and of course I saw the e mail as well. So basically the relationship got off on a really rocky start. 

Months passed and everything was fine until we got a service request on a Friday from the tenants saying the AC stopped working in TX's 110 degree heat and was asking to have it fixed. The PM contacted my home warranty and the AC company called me because I was the owner of the account and told me they couldn't get out there until Monday. The next morning around 5AM I got a call from the AC company and they told me the lady of the house was begging for them to get out there because it's too hot  and her husband was doing chemo at home and couldn't bear the heat. They had contacted the manager later on Friday about having the technician come out but the PM rejected them without consulting me (I had no voice mail nor missed call), and the AC company was wondering if I would pay for the weekend rate and risk not having the warranty cover the repair to have the AC fixed for the tenants. I consider this an emergency and told them to fix it as soon as they could.

Due to the rejection of this call, communication broke down between the PM and the tenants. The husband passed away two weeks later. The tenant actually called the AC company to get my phone number to call me, instead of the PM, to inform me the husband had passed and she intended to vacate early. I redirected her to speak with the PM because he would be the one working out the move out details with them. I told the PM to contact me once he worked things out with the remaining tenant because there were some upgrades I wanted to make, and I wanted to walk the property with the contractor, who would also do the repair work after the tenant vacated. I also wanted the PM to let me know the final move out date so I could enter the property with a lockbox and provide the code to the contractor as well. I let the PM know I wish he could be there so I could introduce him to the contractor since they would be working together. First week of August PM got back to me with the move out date of the mother on 8/17, but failed to mention that cleaning for the home would be going into the weekend of 8/23 and the daughter would be doing it. The PM proceeded to ask me when I would be in town so he could schedule the walk through with me. I told him I on 8/11 I would be in on 8/21 and he waited til late 8/20 to tell me 8/21 is fine but the keys were being held by the neighbor and and he wouldn't be able to meet me on 8/22 for the walk through.

At this point, the major break down in communication was that 

• I had asked the PM for the final move out date of the tenant, meaning he was to deliver me a home that he had already walked through, formed a list of repairs and had the keys in hand by the time I arrived. There was no point in me being there if the tenant hadn't finished the walk through process because the contractor was going to do the repair work as well, and without knowing the actual damage I couldn't get an accurate quote. The PM provided the move out date of the mother on 8/17, not the final cleaned date on 8/22.
• I waited until the PM confirmed the final move out date before booking my ticket. I had originally planned to be in Dallas first week of September, but since the final move out date was so early, I didn't want to waste 2 weeks of time and have the home just sitting there. The PM had every chance to let me know that the home would not be ready by then but he didn't say a word. 

The idea of suing actually came from this miscommunication. Before I arrived, I asked the PM to ensure the tenant had relinquished possession of the home so I would actually have the right to enter.

Why wouldn't I be angry and feel like my asset had been threatened when I heard the PM actually DIDN'T go put a lockbox on the door, and instead, the house key was in some neighbor's hands?

The mistake I made out of ignorance was that based on this information I knew the keys were handed over to the daughter by the tenant, but didn't know that was actually legal. However, I stand by the request to have the lockbox put on the door because the neighbor daughter doesn't know me, and it's unclear if I would be able to get the keys back if I just met up with her. The PM should have contacted her and provided her with the code.

The point of me starting this thread was actually to find a reason NOT to get into a legal case. I don't know the legal system and I was angry and upset and felt like something needed to be done, but I also know the amount of time, effort and money involved with the case probably wouldn't be worth it, not to mention I would have to stay in Texas until the case is resolved and I don't want to miss work for it. If I was ready to proceed I would've contacted a lawyer directly instead of posting it here.

Everything here is documented through e mail and the tenant also saved all the voice mails the neighbor daughter exchanged with the PM. The information delivered by the PM to each of us didn't match up, and in certain instances the tenant had asked the PM to verify things with me but I was never contacted.

To make matters worse, while the PM was swapping out the locks, they took photos of the home, before it had been cleaned, knowing full well no work had been done yet, e mailed them to me, and suggested that I keep all deposits when the daughter had made it clear to the PM that they would be seeking a full refund and would address any problems to achieve that. 

The update also included the PM explaining that the tenant had vacated the property on the 17th so I had every right to enter the home as I pleased, which demonstrated that he didn't know about the tenant's right to hand the keys off to a 3rd party while the home was still in her possession either.

@Jay Hinrichs
I actually had another PM whom I had great trust and relationship with in the past, I couldn't hand this home to him because it is outside of his service area. I didn't have to step in to do anything when I was working with this PM because before I would ask a question he would always provide the answer first. Communication was fantastic and I had full confidence in his judgement. My current PM couldn't provide me with the same confidence, that's why it sounded like I was micro managing, because I felt like my tenants were being treated unfairly.

@Jay Hinrichs

I know you are a very experienced investor and receive a lot of respect, but I wish what I can get from you is constructive criticism and useful knowledge instead of insult and name calling.

I don't know, so I asked. I didn't do enough research but I can learn and will continue learning. I am not defending my lack of knowledge and I admit I overreacted and jumped to conclusion. I now know suing is not a viable option and is very pointless, but I think the lesson here is now I know, and this will not happen again. I don't see how calling me crazy and a pain to work with will help me improve as an investor, unless you think because I am prone to micro-managing, which I know is a flaw of mine, automatically makes me fail as an investor and I can never improve?

I wanted to add that I am not trying to argue I am doing the right thing here, and this is why I am asking these questions. I admit as a landlord I dont feel comfortable having a third party go in and out of the house when the tenant isn't even in the state any more, family or not, and I am surprised at how loose contracts really are ... They seem to work more like guidelines than a contract since no enforcement could be made.

I am learning and I learned something. Thanks for all the inputs to everyone who replied.

So what you are saying is, the neighbor can legally come in and out of my house when my tenant has left the state already just because my tenant said so? When both parties have made it clear they will not take liability for anything that happens to the house?

Even if I am overreacting and there is no basis for all my worries. If the PM was confident in his judgement call, why didn't he send the notarized authorization to me and explain the situation? Instead he went and changed all the locks on the neighbor and told her not to come back again, which knowing all the details that he knew but I didn't, made no sense?

@Russell Brazil and @Account Closed

The reason why I thought I even have a basis for suing them is:

• They handed off the keys to a third party who isn't named in any of the legal bidding documents I have on hand, and that opens up the possibility that they could let even more stranger in the house that the PM nor I could account for. If the property is damaged in any way or if appliances are stolen by any of these people, the fact that the manager knowingly handed off the keys to someone who can't be legally held accountable for would be viewed as intentional negligence by me, and my entire asset is endangered. Even if now I know the daughter is taking responsibility for her mother, how much legal bidding power does the notarized sheet even have? Is it even a valid move to do this when I wasn't informed nor agreed to it in the first place.
• The PM agreement had specific languages mandating the PM to such things as uploading records, keep records, file 1099 etc. and the PM is obviously not doing any of those things. If that's not intentionally breaking the contract, especially after I had asked him to do each thing listed, I don't know what it is. Hence the question, what is the point of me signing a contract with him if I can't hold him accountable for anything that he was supposed to do, and if I can't hold him accountable, what exactly is the contract for?

Hi BP,

Thank you all for the replies and sorry I have been so quiet. I am currently in Dallas dealing with the situation and wanted to give everyone who replied a quick update of what I found out that didn't go with what I was told by my PM.

To start, I wanted to make it clear that all the below details were actually obtained from the neighbor in person and on a 3 way call between myself, my tenant and the neighbor. This whole time the manager never showed up to meet with me, nor did he request to meet with me. In fact, I told him I would be in town 10 days ago and he informed me he would be unavailable to be here for my walk through with the contractor late Friday night.

So here are some of the things I had to find out by myself after getting to the home:

• The unrelated neighbor was actually the tenant's daughter, so she's actually family, although she's not on the lease.
• The neighbor daughter had asked the manager if it is okay for her to take over cleaning the home and get it ready while her mother returns to her home state to prepare the funeral. Without asking me, the PM said it is okay, so the tenant moved forward with leaving her daughter the keys to the home and wrote a notarized letter stating she is leaving her daughter in charge of her responsibility and possessions in and of the house.
• The PM told me the neighbor daughter was just some neighbor living across the street, failed to mention the agreement he had with the daughter and the fact that she is actually the tenant's daughter and asked me to go get the keys from her when I arrive at the home.
• I got angry due to the amount of liability risk involved with this and told the manager he has 24 hours to fix the situation before I send him a lawyer's letter. 
• The manager hurried over to the house the day I flew into Dallas and changed all the locks and put up a lockbox without informing the neighbor daughter
• Without knowing the liability risk involved with entering the home, the neighbor daughter found out the keys she has no longer worked, but the tenant had paid for the entire month of August already so they are still in possession of the house, called the manager and told him if he doesn't give her the code, she's going to call the police and have them watch her break the lockbox off the door and then send him a lawyer's letter.
• The manager shouted at her and said the owner didn't want to have anything to do with them any more, that they don't need to do any cleaning any more and everything left in the house would be thrown away, so she can't enter the house any more.
• I happened to catch the daughter on the phone heading over to break the lockbox and found out about all of the above and told her to calm down and I am allowing her to enter the premise with the lockbox code.
• The daughter cleaned out all the trash and moved all left over furniture in the home and met me for the final walk through the next morning (should be the PM doing this). As of now, she has no need to enter the property any more and will be responsible for switching off the utilities on Monday.

PM related new info that either turned out to be a lie or was just never made aware to me:

• Manager told me the tenant is forfeiting her deposits because she is breaking the lease and want to use the deposit to pay for last month rent when the tenant actually has no money and absolutely need the deposit back to live and that's why the daughter is paying for all cleaning and repairs
• Manager told me the tenants didn't have room for the furniture left in the home so I can keep all of them, which is not true.
• Manager never scheduled a final walk through with the tenant
• Manager didn't know the exact move out date of the tenant

So here you have it, quite an exciting weekend where I was getting on average of 2 hours of sleep a night trying to resolve the issues. It does post an interesting question to me, which is whether it is alright for the daughter to enter the premise and do what her mother was supposed to do and have all the liabilities transferred to the daughter while she is doing it?

To everyone who said to fire the PM ASAP and questions my lack of filtering that led me to hire this PM:

• He wasn't just some guy off the street, I interviewed him for 2 weeks and documented the entire conversation on an e mail chain and he gave really good answers and his response time was really great (2 to 3 replies a day).
• He was interviewed to take over the original would be PM who was also the leasing agent who doesn't know anything about PM, so at the time he was saving me from another bad PM
• The home this PM is in charge of is fairly new with very little repair work. The whole time he's managed the house (10 months) we've only had 2 service calls, making my interaction with him extremely limited, so it's really hard to tell how irresponsible and lack of PM knowledge he really is/has
• I intended to change this PM due to other factors and have been looking for recommendations on BP and have interviewed a few, he will be fired once I can get one in place to take over since I am out of state.

Don't get me wrong, I am not saying I have no fault in this situation but trust me, ego is 100% not a part of this equation when I have a 200k house on the line. I will take all the fault as long as I can make sure the house is safe and secure, but what can I do when I've taken all the precautions I should do (interview, meet with the PM, check reviews and references etc) and he just basically lies about everything up front, and then once he gets the business he literally just collects the check and sends me a statement every month. What else should I do to make sure this doesn't happen again?

Also, going back to the original topic of the post. Everything I've mentioned in the original post have specific language in the contract mandating the PM to do them, yet he doesn't do any of them. If we can't hold the other party liable for breaking the contract and the only thing we can do is fire the PM and risk having to pay termination fee, what is the point of signing a contract?

Sorry about the EXTREMELY long post everyone, I hope at least the drama is entertaining enough for you to read to this point

Hi BP,

I am seriously considering suing my PM, and would like to hear what other landlords would do in this situation.

Recently one of my Dallas rentals became vacant. It was originally rented to an elderly couple and the husband had passed away in his sleep. The wife's family was originally from a different state so she decided to move in with her son and I agreed to release her from her lease.

Upon confirming her move out date, the manager should've gone over and do the final walk through with her. Later that night, I received an e mail from the PM saying that he is leaving the house keys with a neighbor across the street, who is not part of the lease agreement and not an emergency contact, because she will be taking a couch left over by the tenant in the garage and cleaning the house for them. Essentially, the manager decided it is alright to risk having unrelated 3rd parties go in and out of my property and potentially causing huge liability risks. I have also never met this neighbor and it's questionable if she will believe that I am the home owner and actually hand the keys to me. I am flying to Dallas to look at the work needed to be done for the home, when I requested the final walk through photos and itemized list of repairs, the e mail was left unanswered, which makes me believe that he actually didn't take any photos and made no such list.

My question now, is that I know generally speaking involving the legal system is a huge waste of time and money, but since the manager knowingly risked my entire investment by breaching his PM contract with me, which requires him to limit my liability and take care of the property, it seems appropriate to sue him for the entire value of the home, which is not a small amount and I feel like it's a needed lesson for him.

On top of handing off the keys to a neighbor, there are other things stated in the PM contract that mandates him do that he doesn't do. 

For example:

• The PM should upload all invoices and documents to the owners portal but the owners portal has nothing in it, and he only sends a monthly statement by e mail. 
• The tenants' portal was supposed to be used to submit requests but the tenants don't even have login information. All tickets are called in or e mailed.
• He was supposed to file 1099 for me but he doesn't do it. When requested he sent me an annual statement and told me to take it to my accountant.

There are many other things this guy doesn't do, at the very least I feel like his license should be revoked. What do you think is the best course of action here?

Totally agree with @Carlos Rovira

My work environment is a lot more relaxed than most work places out there, since I am a digital artist work on movies we basically work in a studio and phone calls are not a big deal at all.

What I did get, when people around me found out I was doing REI, was a little bit of attitude and lots of questions, some of them automatically assumed that I have loads of money set aside just for REI and that I should just shut up and stop bragging. Went with what @Nathan Paisley said perfectly. But as time goes on, they started to understand that I wasn't talking about it to brag, it was just a thing I am doing on the side, and half the time I am a little stressed out because my PM sucks and I have to keep calling different people left and right. It's not as easy as just collecting rent checks and there's a lot of work involved.

Once people got over it I started to meet people who actually are either doing the same thing, have done the same, or their family owns rentals/apartments etc. We started talking about the economy, the market, strategy and where to buy. It's actually kind of fun and it's comforting to know that others think the same. I think the main thing is to make sure to be yourself. It's a smart thing to get into REI, and maybe you are very different from your peers, but anyone can learn to do it and results won't show if you don't put the work into it. When people ask, just try to teach them and give them your best advice or direct them to BP, I think people get it and they will come back able to carry on a much more constructive conversation with you regarding the topic.

This is an interesting scenario! I think maybe right now is a little too early to worry about it, but lets say you are 3 months down the road and the new tenant is still "missing" from the unit, I would like to ask the more experience landlords the following questions:

• Part of wanting to have a tenant in the home as soon as possible is not just so we can lower vacancy cost, but also having someone in the home maintains the general condition of the home. It would be a serious problem especially if this tenant signed the lease and never transferred utilities under his name after @Morgan Nilsen cuts utilities on his end. Things can start breaking fairly quickly due to weather, not to mention squatters might start to notice the home is vacant (assuming this is a SFH).
• Assuming it is 3 months later and Morgan realizes he needs to go check on the unit and serves his 24-48 hour notice. If the tenant isn't there to receive the notice, can he still enter the premise knowing full well that the tenant never really moved in in the first place?

@Michael L.

Haha, I guess bathtub valve dripping and bathtub leaking are 2 very different things, and yes, valve dripping really isn't a huge deal. I guess it would be nice if the notes are more clear in nature!

I figured the issues were minor since Elite has very good reputation and honestly, their rehab looks pretty good. We were thinking about investing in Chicago but decided not to because of the super high property tax and state income tax. I was particularly interested in Elite more than Mack because it makes more sense to me to own MF in large metropolitan areas such as Chicago. Thank you again for posting your experience in the forums, you have provided great examples and insight for us and for our future purchasing decisions.

Good luck!