All Forum Posts by: Sing Ho

Go to www.narpm.org and search their directory.

If you make a mistake and hire a bad Property Manager, it can ruin you for life. Learn the difference between a good PM and a bad one, try to interview at least three, and then make an educated decision. Remember: the PM with the highest fees may be the one that makes you the most money.

Things to do:

1. Review their management agreement. Ensure there are no hidden fees!

2. Calculate the total cost for a year. Some will charge a percentage of rent and nothing else. Some will charge a percentage each month but also a start-up fee, a leasing fee or lease renewal fee each year, administrative fees, maintenance fees, etc. Every fee should be fully disclosed!

3. Review their lease agreement and addendums.

4. Interview them about how they handle maintenance, late rent, unpaid rent, lease violations, evictions, etc.

5. Ask to speak to some of their current owners and tenants.

6. Google them and see what kind of reviews they have.

Wait...you actually pay someone to manage your property and they allowed your tenant to go six months without paying rent? I'm not from your state but it's my understanding that evictions takes less than 60 days from start to finish. If that's the case, your Property Manager owes you four months of rent! Before worrying about how to go after the tenant, I would figure out how to get away from the Property Manager and I would seriously consider suing him for professional negligence and/or filing a complaint against him with the state board of REALTORS or whatever body he is a part of.

Does the Property Manager have anything in writing that stipulates when a late fee is applied, when notice is served, or when the manager will file for a forcible entry and detainer? If so, they were negligent in their duties and you should charge them for the lost income and damages. Let the manager go after the tenant for reimbursement!

If there is nothing in writing saying how they handle late rent, notices, or eviction, then you really have nobody to blame but yourself. Chalk it up as an expensive lesson, find a quality manager, and send the tenant to collections where your claim will languish forever and you are likely to ever collect a dime. At least it will show on their credit report for any other Landlord that runs a background check. Your Property Manager (or you) can turn them over to collections without a court judgement.

I have a written policy that says rent is due on the 1st. I provide a 3-day grace period then hit them with a late fee on the 5th (even if it's on a weekend). If they haven't paid everything in full by the 10th, I serve them with a 3-day Pay or Quit Notice. If they do not pay within three days after the Notice was received, I file for eviction. I typically have a court date within two weeks and the tenant either pays everything, including filing fees, or we go to court and I get an eviction. 

There's no excuse for waiting so long.

Did you already get a money judgment against the tenant? If so, consider waiting a bit for your deadbeat to get comfy, find a job, perhaps buy real estate or other assets. I doubt acting quickly against somebody you just evicted produces anything of value... and the element of surprise will be on your side later.

As someone who has recently gone through the initial stages of what you are doing, and am now working through the repercussions I would say that it is worthwhile so long as your ducks are in a row. If you know where the person works, and has a garnishable wage it is definitely worthwhile to get the judgment. There are some cautions though with that judgment. Because of the high dollar amount there is a good chance your tenant will declare bankruptcy once you start taking money. Some ways to hedge against this are to split the case between rent owed and damages to the property, and in the damages you NEED to include the term "willful and malicious damage". In accordance with 11 USC 523 that will bankruptcy proof the damage claim, but it will be a fight. Also, any amount greater than $600 garnished within the preceding 90 days of the bankruptcy filing can be clawed back as a preferential transfer. If you do go the garnishment route, I would suggest keeping the dollar amount you collect to $200 monthly max, and include the 6% interest that is allowed by law (this may be different where you are). Again, I am not an attorney, but am currently navigating this issue, and these are some of my lessons learned. Maybe someone who is a professional in that arena can provide better guidance.

First, be happy they are gone and begin the process to get a new tenant in that property ASAP.

Then, sue the tenant in civil court. Initially you will have to pay the filing fee but you can request in the filing that the tenant pays the money from back rent, damages, AND the initial filing fee. You will have to make sure your ducks are in a row and take plenty of pictures of the damage. Best of luck to you!