You also have no moral or ethical obligation to give him back his money either. 

LOL.Honestly, I'm just looking for a little moral support from the pros.

Hi biggerpockets was hoping you guys could help me out with a little predicament i have found myself in. 

You need to maintain the higher moral ground so that you can show good faith when it does go to court, so always make repairs in a timely manner.

Also their is that effect of when people are in a groups, they lose personal accountability and their moral compass goes out the window.Why do you want to report them?

I have a list of investors, real estate agents and turn key providers that have violated morals of the industry not considering the safety of the tenants and putting the family and INVESTOR at a huge risk.

Moral of the story is it's best to be careful how you word things and to always be honest and disclose everything.

I feel more a moral obligation in this spot of not being taken advantage of. 

Moral of the story a payoff demand can not be unreasonably with held if a party can prove their interest in the real property which seems fairly evident in this case.  

Because I would of had to fire them then get a new PM to take overI suppose the moral of this story is:Weigh your pros and consTry not to panic and think rationallyStep in when needed (it is your business) if you don't feel something is right inquireKnow your market, they have the title of property manager, but that doesn't mean you have to take their word on everything, in this case it helped because I told them to drop the price.