All Forum Posts by: Lisa Hammond

 This. And also reach out to the tenants directly to see if they have their leases. Let them know that if they don't have their leases, can they still log into portals to get their ledgers and records of payments? This would at least help you determine an approximately lease time. If you get absolutely nothing, get another lease out to the tenant with a clause that this new one super cedes any other leases due to loss from current PM company. I would also get with an attorney immediately. Review all your previous documents and owners statements from them because you'll need to put a claim in for any tenant deposits they're holding - and you'll be covering those deposits on your own if needed in the meantime. 

If they damaged the tub and you covered the cost, that is assessed to them and should be on their ledger right as due with late fees accruing. Once the balance due isn't paid by the 1st, a 3 Day goes up and the eviction is processed as soon as your laws allow you to do so. S8 has nothing to do with these matters and I would only involve them as a courtesy to let them know what the tenant's done re: damages and child sleeping in the basement because it will disqualify them for the program. Get your lawyer involved and move them out ASAP.

 PM companies should always have a minimum of 3 checking accounts: 

1. Tenant - these are tenant deposits and never touched -- this money belongs to the tenants

2. Operating - rents and fees collected goes in here and PROPERTY expenses are paid out from here, after mgmt fees are paid out, owner disbursements come out of this account -- this money belongs to the owners and no company expenses should EVER be paid from this account

3. Company - mgmt fees, maint, leasing, etc all get pulled from Operating into here to pay the PM company then company expenses (payroll, office supplies, etc) get paid from here -- this money belongs to the PM company

Say $1,000 in rent is collected into Operating and there wasn't any maint or expenses that month so only a mgmt fee of $100 is collected on the 10th and paid out to PM company leaving $900 for owner disbursement. On the 12th the HVAC goes out and needs a service call of $120 and on the 13th the PM maint guy goes out to repair a sink leak for $100. Where is this $220 dollars going to come from? The PM company already paid out the owner disbursement for the month so there's no funds available in the Operating acct. This is just one unit, what about the other 100 or 800 units the PM company manages? How are all their Operating costs getting paid from the 11th-30th of each month if they pay out and don't require reserves? I'll tell you how, either the money is all mixed together and they're not keeping a wall between their own Company funds or they're using Tenant Deposits to operate or, out of the kindness of their hearts, they personally cover all these expenses each month at the risk of a tenant not paying the following month so they are personally in the hole (do you think that's happening??).  This means they are doing some very sketchy financial practices and don't have a good Controller or CFO in place so I wouldn't trust them to walk my dog. And when you ask about this scenario and they don't have an answer or get red and flustered, walk out. 

A reasonable amount of reserve, held in the Operating account by the PM company, is one month's rent but even that is a red flag because we all know a single month can easily go over the amount of rent received for a large repair. 

We do not hold reserves and I pay out owner distributions at various dates depending on what day it falls on, usually the 24th-26th. By that date, we've received enough prepaid rent or have a leeway with the vendor that we can fund any Operating expenses from the Operating account. 

We started our own company after interviewing many PM companies. I asked very pointed questions about their operations and finances after we had a very bad experience with a PM company. The number one question I asked was when they pay the Owner Distribution out and if they required reserves. Most proudly told me they paid out on the 10th or 12th and never required reserves. That was a HUGE red flag and I immediately did a full stop. If they made it past that question, I then asked how many bank accounts they used and were their company funds mixed in with the operating funds. If they were, that was another full stop. I couldn't find a single one to pass even those two questions so we gave up and started our own company. 

Not sure what City you're in but I no longer recommend complaining tenants contact the police because they're recently taken the stance that not only will they not do anything about noise, marijuana/illegal activities, or dogs (they won't issue citations or even enter units) but they are going to begin issuing nuisance fines to the property owners. 

Aint that the truth. When owners contact me and set up an interview they are always stunned when they realize I'm actually interviewing them. We turn away more than we accept. 

I would *almost* prefer to deal with Section 8 rather than any HOA. Almost. They're awful and tenants will never keep the property to their standards. Once the house is on their radar, here come the notices!

 We do that but we have them on Revert to Owner so the Gas and the Water will automatically go into our name whether the tenant disconnects service or if they're disconnected for non pay. 

 I can't recall the software name. We notified the MTM tenant with 60 days notice that she'll need to get these two utilities in her name. It's in our lease that if tenants don't put them in their name or it reverts, they pay actual plus an admin fee. In Kansas a LL cannot for ANY reason stop a utility service so we have to continue in our name if she doesn't put into hers. 

There is software you can get to determine square footage, number of residents, etc and bill each one individually but then you're paying the bill and a month later you're billing the tenant but keeping it separate from rent and it's a real pain plus this is very undesirable to tenants. We recently split the gas and electric service of a large older home with an up/down unit configuration for about $6,000 including permits and inspections. The City won't allow us to split water meters on an existing service. I would recommend doing that wherever possible.