This is a true story that happened to a fellow investor, highlighting the importance of proper property manager vetting and taking necessary steps in case of such incidents.
The fellow investor had hired a property manager who was responsible for collecting rent on their behalf.Typically, the property manager would deduct their fees and other expenses before depositing the remaining rent into the landlord’s bank account. However, in this particular case, the property manager failed to deposit the rent and claimed that the tenant never moved in, which was not true. To make matters worse, the property manager stopped responding to emails and calls.
If you find yourself in a similar situation, here are some steps you can take:
1. Collect evidence: Gather all relevant information, including dates and conversation details between you and the property manager. Keep records of email exchanges, paper documents, and any recorded conversations that may serve as evidence.
2. Bank statements and proof of payment: Collect proofs from Tenant such as bank statements and deposit slips to confirm if the tenant’s rent has been paid. It’s also advisable to have the tenant sign a statement confirming their payment and capture a video recording as additional evidence.
3. Document conversations in writing: Going forward, ensure that all your communication with the property manager and tenants are in written form. This will help maintain a clear record of any agreements or discussions. Even if you had a conversation with the tenants or the property manager verbally, follow up with the written email to state what was discussed.
Here are the next steps you can consider:
Take over the tenant and change property manager: If the property manager has proven to be unreliable, you may consider terminating your contract with them and taking direct control of managing the property or finding a new property manager.
File a claim in Small Claims Court: If your attempts to resolve the issue directly with the property manager are unsuccessful, you can pursue legal action by filing a claim in Small Claims Court. Make sure you have all the necessary evidence and documentation to support your case.
Report to the police: In cases where you suspect fraudulent activity or misappropriation of funds, it may be appropriate to file a police report. Consult with legal professionals to determine the best course of action in your specific situation.
Prevention is Key
To avoid such situations, prevention is crucial. Here are some preventive measures you can take:
Seek referrals: Ask trusted individuals who have used property managers for recommendations. Their firsthand experience can provide valuable insights into the reliability and trustworthiness of a property manager.
Thoroughly vet property managers: Even with referrals, conduct your own thorough background check on potential property managers. Look into their track record, experience, and reputation. Consider conducting interviews and asking for references from their previous clients.
By being proactive in your selection process and diligently monitoring the performance of your property manager, you can reduce the likelihood of encountering similar issues.
You might want to refer to this blog on how to vet property manager.