Managing your business can be challenging, and that’s why many entrepreneurs rely on contractors and property managers to help them. However, not every decision to bring on additional help leads to positive outcomes. In some cases, you may find it necessary to file a complaint against a property management company that has failed to meet your expectations.
While it’s typically the tenants who complain or take legal action against property management companies, landlords are also greatly affected when their chosen management company fails to fulfill its responsibilities. The success of their business is at stake.
So, what can you do if your property manager is ignoring you, causing problems with tenants, or underperforming in some way? Today, we’ll learn where you can report lousy property managers and the steps you should take immediately.
A Table Of Contents On What To Do When Your Property Manager Ignores You
Property managers have a duty to both the tenants they serve and the landlords they work for. If your property management company fails in either of these areas, it’s time to take action. Let’s explore your next steps:
- How Great Property Managers Support Landlords
- When Property Management Goes Wrong
- What To Do When Your Property Manager Ignores You (Or Your Tenants)
- Step 1: Address The Problem Directly
- Step 2: Contact Higher-Level Management When Possible
- Step 3: Review Your Contract
- Step 4: Fire The Property Management
- Step 5: Recover Your Business Needs
- Step 6: How To File A Complaint Against A Property Management Company
- Streamline Your Tenant Screening
- FAQs: How To Handle Bad Property Management Companies
- Can I take legal action against a property management company?
- What are 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 management company?
- Reporting Bad Property Managers: A Necessary Step
How Great Property Managers Support Landlords
Having a good property manager can make all the difference when you’re dealing with multiple properties. Their services enable you to balance your time between different tasks while still overseeing what’s happening at your properties.
A high-quality property management company should ideally provide the following services:
- Rent collection, including handling late payment fees, setting rent prices, and adjusting them if necessary.
- Tenant searches, which involve advertising, screening, and conducting interviews.
- Tenant management, including handling complaints, repair requests, and inspections.
- Property maintenance, which covers common areas, routine maintenance, and addressing unexpected problems.
- Knowledge of local and state laws and ensuring compliance with those standards.
- Financial tasks, such as budgeting, financial reporting, tax-related matters, and record-keeping.
The specific tasks performed by a property manager depend on the company’s services and the terms of your contract. If you notice that your property manager is not living up to their responsibilities, taking swift action is crucial to prevent tenant loss, excessive expenses, or potential legal issues.
When Property Management Goes Wrong
Having a bad property manager can quickly become a major problem. Negligent actions on the part of a property manager can lead to legal trouble for you as the landlord. After all, property managers represent your rental business through contracts, and you may be held liable for any mistakes they make.
Negligence manifests in various ways in property management. Here are some significant issues to be aware of:
- Violating Federal Fair Housing Laws or state housing laws during the tenant screening process.
- Failing to disclose serious problems, such as lead paint or mold issues, which can cause long-term harm to tenants.
- Neglecting necessary repairs that ensure tenant safety.
- Entering rented units without proper notice.
- Illegally withholding security deposits for extended periods or for inappropriate reasons.
What To Do When Your Property Manager Ignores You (Or Your Tenants)
Discovering that your property manager is not meeting your standards requires you to take action. Here’s a step-by-step guide on what you should do:
Step 1: Address The Problem Directly
Start by approaching the property management team and expressing your concerns. It’s essential to document your issues through a letter, email, or phone call. By directly addressing the problem, you give the company a chance to resolve the issues. Sometimes, a simple conversation can lead to a positive outcome, making it a crucial initial step in dealing with this situation.
Step 2: Contact Higher-Level Management When Possible
If your property manager is a contractor or reports to a higher authority within a company, reach out to the relevant individuals as soon as possible. Irresponsible managers won’t solve your problems, but you may be able to replace them with someone more competent from the same company.
Step 3: Review Your Contract
Before proceeding further, carefully review your agreement with the property management company. Identify the specific areas where the managers are not meeting the requirements, and gather evidence to support your claims. Pay close attention to the termination and arbitration clauses in the contract to understand how the management agreement can be terminated and the process involved.
Step 4: Fire The Property Manager
If your property management team consistently fails to meet the agreed-upon goals, it’s time to part ways and find a more reliable alternative. Don’t continue losing money and risking your business’s well-being. Even if the property management company wants to retain you as a client, their inability to meet your business needs demonstrates that it’s time to move on.
Step 5: Recover Your Business Needs
Now, you must put your business back on track. Focus on securing your future profits. Whether you step back into the management role or hire a new company, it’s vital to meet the needs of your tenants. Communicate with them, letting them know that you’re addressing the previous management issues. This is particularly important as there may be unresolved issues that tenants are upset about, but you are not yet aware of.
Step 6: How To File A Complaint Against A Property Management Company
After stabilizing your business, it’s time to file a complaint against the property manager or management company. However, this process isn’t always straightforward. You may need to report the issues to their holding company, the Better Business Bureau, or a state organization responsible for managing licenses.
Contact The Owner
If you were working with a specific member of the management team, it’s important to file a complaint with the company’s owner or supervisor as soon as possible. Even after terminating your contract with the company, informing the owner about the issues is crucial.
Real Estate Association And/Or NARPM
If the manager is a member of the NARPM (National Association of Residential Property Managers) or a local real estate association, you can file an ethics complaint. These organizations have codes of conduct for property managers to follow, and violations may result in disciplinary action or the revocation of membership.
Better Business Bureau
You also have the option to file a complaint with the Better Business Bureau (BBB). The BBB will contact the property manager to review their rating, potentially leading to a resolution to the issues you experienced.
Sue The Property Manager
If necessary, you can work with a qualified real estate attorney to file a lawsuit against the property manager to seek compensation for your losses and any other infractions. However, the outcome of such legal action depends on the manager’s business structure and other factors.
Streamline Your Tenant Screening
As you reassume your property management responsibilities, you may find yourself overwhelmed with various tasks. Tenant screening often falls by the wayside in such situations, but it’s important to avoid a vacant property.
Save time and money by streamlining your tenant screening process with RentPrep’s enterprise services. Our high-volume screening options enable landlords to accurately and efficiently process applications even without a property manager. Explore our services for enterprise clients today.
FAQs: How To Handle Bad Property Management Companies
Can I take legal action against a property management company?
If your property management company fails to fulfill its contractual obligations, you may be able to sue them in small claims court to recover some of your losses. The possibility of legal action depends on the terms of your contract and your ability to demonstrate significant losses caused by their actions.
It’s also possible for your tenants to sue the company if the company’s actions directly result in injury or property damage. While supporting your tenants in seeking retribution is important, it may not be an ideal situation for you. It’s worth noting that suing an LLC (Limited Liability Company) property management company can be more challenging due to different rules and limited assets available for claims. Pursuing legal action against such a company may require the assistance of a specialized real estate attorney and additional expenses.
What are common warning signs of problems starting with a property manager or management company?
Landlords who suspect problems with their property management company should watch out for warning signs. Some common indicators include:
- Lack of responsiveness: If property managers fail to respond to you or tenants promptly, it’s a cause for concern. You shouldn’t have to constantly reach out for updates; they should proactively communicate with you.
- Inadequate tenant assistance: Property managers should promptly address tenant requests for repairs or other immediate needs. If tenants start contacting you directly because the property manager is unresponsive, there’s a problem.
- Neglected property inspections: Confirm whether property inspections are being carried out as agreed upon. Some management agreements require inspections before and after move-in and at regular intervals during the tenancy. Neglecting inspections can lead to significant tenant or property issues going unnoticed.
How can I choose a great property management company?
Evaluating property management companies thoroughly before hiring them is essential. Apart from reviewing their performance record, it’s important to continue monitoring their services throughout the management process.
During interviews with potential property managers, consider asking these key questions to assess their suitability for your management needs:
- What licenses, insurances, certifications, and codes of ethics do they hold and abide by?
- How long have they been in property management, and where have they managed properties?
- Do they offer leasing and brokerage services in addition to property management?
- How does their rent payment collection system work?
- What is their owner payout system like?
- How frequently do they provide financial reports?
- Do they provide necessary tax documents at year-end?
- Do they work with in-house contractors or external vendors?
- What are the vacancy rates for properties they manage?
- What fees are associated with their services?
- How does the management agreement function, and does it automatically renew?
What should I avoid when hiring a property management company?
While interviewing potential property management companies, be vigilant for red flags that may indicate an unsuitable choice. Watch out for:
- Unprofessional appearance or behavior
- Lack of responsiveness or punctuality
- Limited availability outside regular business hours, with no emergency services for tenants
- Absence of references or proof of previous work
Reporting Bad Property Managers: A Necessary Step
Working with a subpar property management company can result in poor business outcomes. Your tenants won’t have a reliable point of contact, and you won’t have a competent manager supporting your needs. If you identify problems with your management company, take immediate action to minimize stress and costs.
After terminating your contract with a poor company, carefully review their past work in detail. This involves reviewing tenant records, ensuring rent is paid and properly tracked, updating property inspections, and verifying that vendor invoices have been appropriately handled.
Examining this information will enable you to set better goals, establish expectations, and implement effective tracking measures when working with future property management companies. While it’s crucial to thoroughly vet your next company, keep in mind that not all companies will fail you. The right property management company is out there – you just have to find them.
For more information on property management or to explore the services offered by Garrity Traina, please visit Garrity Traina.