vonStephen Michael Weiss
December 7, 2022
Sometimes you need help running your business. Hiring contractors and property managers makes sense as businesses grow, but this decision does not always yield positive results. You may even need to learn how to file a claim against a property management company.
In most cases, it is tenants who complain or take action against a property manager, but they are far from the only ones seriously affected by failing managers. Landlords are also badly affected, and the heart of their business may even be at stake if their management company fails to fulfill its responsibilities.
What can you do if your property manager ignores you, causes problems with tenants, or underperforms? Learn today where to report bad property managers and what action you need to take right away.
A table of contents on what to do if your property manager ignores you
Property managers are responsible for both the tenants they serve and the landlord they work for. If your property management fails on any of these fronts, it's time to take action. Follow the instructions to define the next steps:
- How great property managers support landlords
- When Property Management Goes Wrong
- What to do if your property manager ignores you (or your tenants).
- Step 1: Address the problem head-on
- Step 2: Contact senior management if possible
- Step 3: Check your contract
- Step 4: Engage the Property Manager
- Step 5: Restore your business needs
- Step 6: How to file a claim against a property management company
- Simplify your tenant screening
- FAQ: How to deal with bad property management companies
- Can I take legal action against a property manager?
- What are the common warning signs of problems starting with a property manager or management company?
- How Can I Choose a Great Property Management Company?
- What Should I Avoid When Hiring a Property Manager?
- Reporting Bad Property Managers: A Necessary Step
How great property managers support landlords
A good property manager can make all the difference when working with multiple properties. Their services allow you to balance the things you spend time on while actively monitoring what is happening on your properties.
What can you expect from quality property management?
Ideally, they provide:
- Rent collection, including late payment fees, rent assessment, and rent adjustments
- Tenant research, including advertising, screening and interviews
- Tenant management, including complaints, repair requests and inspections
- Property maintenance including common areas, routine maintenance and sudden issues
- Research local and state laws and ensure all practices comply with these standards
- Financial tasks, including budgeting, financial reporting, taxes, and record keeping
The exact duties of a property manager depend on the services the company offers and the contract you have entered into. If you notice that your property manager is slacking off, acting quickly is essential to ensure you don't lose tenants, overspend or get sued.
When Property Management Goes Wrong
Having a bad property manager can quickly become a huge problem. Negligent actions by a property manager can lead to legal problems. Property managers represent your rental business through contracts, which means you can be held responsible for your mistakes.
Negligence occurs in property management in many ways. Here are some of the main issues to look out for:
- Screening for Violations of Federal Fair Housing Laws or State Housing Laws
- Confidentiality on serious issues such as lead paint or mold issues causing long-term harm to a tenant
- Negligence of repairs necessary for the safety of the renter
- Entering a rented unit without notice
- Illegaldeposit retentionfor a long time or for inappropriate reasons
What to do if your property manager ignores you (or your tenants).
What do you do when you discover your property manager is not up to your standards? you act. Here's our step-by-step guide on what to do.
Step 1: Address the problem head-on
Please contact the property management team and let them know of your concerns. It is important that you raise your concerns promptly by letter, email or phone call and that they are well documented.
A team member may have failed to fulfill their responsibilities without notifying the company. A simple conversation with the company can lead to a positive resolution, and is always a good first step when dealing with this type of issue.
Step 2: Contact senior management if possible
If your property manager is a contractor for a certain company or reports to another department, contact supervisors as soon as possible. Irresponsible managers will not solve your problems, but you can get a quality replacement from the company.
Step 3: Check your contract
Before proceeding, make sure you understand your agreement with the property management company. Locate the exact areas where managers are not meeting agreement requirements and gather evidence.
You should also review the termination and arbitration sections of the contract. These areas explore what happens when you want to end the management contract and how that process will work.
Step 4: Engage the Property Manager
Don't lose money all the time - fire your property management team as soon as you review the contract. They know they won't achieve their goals and it's time to move on. Even though they want to keep you as a customer, they have proven that they cannot fulfill your business needs.
Step 5: Restore your business needs
Your business needs to get back on track now. While you may want to file a lawsuit against the property manager and try to recoup your losses, you must first secure your future profits.
Get back to leadership or hire a new company ASAP. Make sure your tenants' needs are being met, and let them know you're fixing past management issues. It is important to communicate this to tenants as there may be ongoing issues that you are not yet aware of that are bothering you.
Step 6: How to file a claim against a property management company
Once you've secured your business, it's time to file a claim against your property manager or management company. This is not always an easy process. You may need to file a report with your holding company, the Better Business Bureau, or even a government organization that administers management licensing.
Please contact the owner
If you work with a member of the management team, you should file a complaint with the business owner or boss as soon as possible. You may have already tried this, but it's crucial to make that part aware of the issues even after the shooting.
Real Estate Association and/or NARPM
You can file an ethical complaint with theNARPMif the manager is a member or of the local real estate association, if permits are required in your area. These organizations are working to have a code that property managers must follow. Individuals who fail to comply with the Code may have their membership revoked or face further disciplinary action.
best business office
You can submit a complaintwith the BBB. The Better Business Bureau will contact the property manager for a rating review and this may lead to positive action.
Sue property manager
Work with an experienced real estate attorney to file a lawsuit against the property manager for your losses and other violations. You may recoup some or all of your losses, but that depends on the manager's business structure and a number of other factors.
Simplify your tenant screening
As you take back ownership responsibilities, you are likely to be overwhelmed with responsibilities. The search for new tenants quickly takes a backseat in these situations, and this is something all landlords want to avoid.
Save time and money by streamlining your tenant screening process with RentPrep's enterprise services. These high-volume screening options help homeowners process orders accurately and efficiently, even when working without a property manager.
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FAQ: How to deal with bad property management companies
Can I take legal action against a property manager?
If your property management company did not honor the contract, you can sue them in small claims court to recoup some of your losses. This will depend on the specific terms of the contract and your ability to demonstrate a significant loss as a result of your actions.
Also, it is possible for your tenants to sue the company if the company directly causes them bodily harm or property damage. However, this would not be an ideal situation for you. Ultimately, you want to support your tenant in their efforts to seek retribution for their hardship wherever possible.
Se oThe property management company you are working with is an LLC, you may have more trouble processing them. LLCs have different rules and limited assets that can be claimed. This will require a special real estate company to identify the LLC owners and complete the proper records. You may end up deciding that it is too expensive to continue down this path.
What are the common warning signs of problems starting with a property manager or management company?
Homeowners who fear their property manager is falling behind or failing to fulfill their responsibilities should be on the lookout for some important warning signs.
If property managers don't respond to you or tenants within a day, there's a problem. You shouldn't be the one who needs to check for updates. The property manager should contact you.
The property manager must also respond to tenants. Renters who request repairs or need immediate assistance must be able to obtain such assistance. If you get direct calls from tenants, then there is a problem with the property manager's job.
Ensure property inspections are carried out as agreed. Your contract with the property management company may require them before and after you move in and periodically during your tenancy. If inspections aren't carried out, you could be dealing with colossal tenants or property issues without even knowing it.
How Can I Choose a Great Property Management Company?
Evaluating property management companies prior to hiring and throughout the management process is vital. Check their background before committing to their services, but don't stop there. Check back regularly to make sure things are going as planned.
Here are some important questions to ask when interviewing property managers to determine if they are a good fit for your management needs:
- What licenses, insurance, certifications and codes of ethics do they have and adhere to?
- How long have you managed the property and where was the property located?
- Do your services include leasing and brokerage as well as property management?
- How does your rent collection system work?
- How does the owner payment system work?
- How often are financial reports sent?
- Does the company provide the required tax documentation at the end of the year?
- Does the company use internal contractors or external vendors?
- What kind of vacancy rate do your managed properties have?
- What types of fees are associated with your services?
- How does the management contract work and is it automatically renewed?
What Should I Avoid When Hiring a Property Manager?
If you interview potential property management companies, you can probably get an idea of whether a company is a good choice or not. However, some red flags are less obvious than others.
When working with a new property management company, keep the following in mind:
- unprofessional behavior
- Unprofessional language or behavior
- Slow response to queries or delay in queries
- Regular business hours only, no emergency services for renters
- No references or proof of work
Reporting Bad Property Managers: A Necessary Step
Working with a bad property manager leads to bad business. Your tenants don't have a reliable contact person, and you don't have your own manager by your side. If you've identified an issue with your management company, take immediate action to minimize stress and costs.
Once you've removed a bad company, review the work they've done in detail as you go:
- Check all tenant documents
- Make sure all rents are paid, properly tracked and up to date
- Review property inspections and complete any that are out of date
- Verify that vendor invoices were properly paid
Reviewing this information will help you set better goals, expectations and follow-up actions for any future property management company you work with. It will be important to thoroughly review your next venture, but don't assume that all ventures will fail. The right company is out there - all you have to do is search.