Dishonest Property Manager, scamming me.

[Joz]

My new PM is telling me something I've never heard of. I rehab a newly purchased house, they found a tenant, I had new appliances installed and the tenant didn't know how to turn on the new stove. He called the PM and the crazy story begins. I was charged a total of $450 for them to go out to help the tenant get the stove lit. "Their" story is, since it was a new stove, they had to pull a permit ($150), from the city, have the electrical inspected, the stove inspected before it was "safe" for someone to work on it. In the invoice, they did not find anything wrong, (other than they leveled it), but it did work when they turned the stove on. The PM says this is a "Normal procedure". I asked to see the permit and for over a month, they have not come up with it. Only the permit that "my contractor" got for the gas meter that I paid the contractor for. I contacted the city and got copies of every permit for the past 6 months and theirs is not one of them. My original PM contact person finally agreed, after I sent him my permit, that I shouldn't have to pay, and he would credit my account. He's no longer there and they're back to their original story.
They don't want to credit my account so, what are my options? I'm starting a new PM tomorrow.
Thanks for any advice.

 

[quincy]

My new PM is telling me something I've never heard of. I rehab a newly purchased house, they found a tenant, I had new appliances installed and the tenant didn't know how to turn on the new stove. He called the PM and the crazy story begins. I was charged a total of $450 for them to go out to help the tenant get the stove lit. "Their" story is, since it was a new stove, they had to pull a permit ($150), from the city, have the electrical inspected, the stove inspected before it was "safe" for someone to work on it. In the invoice, they did not find anything wrong, (other than they leveled it), but it did work when they turned the stove on. The PM says this is a "Normal procedure". I asked to see the permit and for over a month, they have not come up with it. Only the permit that "my contractor" got for the gas meter that I paid the contractor for. I contacted the city and got copies of every permit for the past 6 months and theirs is not one of them. My original PM contact person finally agreed, after I sent him my permit, that I shouldn't have to pay, and he would credit my account. He's no longer there and they're back to their original story.
They don't want to credit my account so, what are my options? I'm starting a new PM tomorrow.
Thanks for any advice.

You reside in California, right? Is this rental in California or is the rental house the one you own in Tennessee? Or is the rental somewhere else?

 

[adjusterjack]

They don't want to credit my account so, what are my options?

Lawsuit, or kiss the money goodbye.

 

[Joz]

You reside in California, right? Is this rental in California or is the rental house the one you own in Tennessee? Or is the rental somewhere else?

Yes, you are correct. We're in CA but this is a new house in Mississippi. So, new rehab, new appliances and new tenant.

 

[quincy]

Yes, you are correct. We're in CA but this is a new house in Mississippi. So, new rehab, new appliances and new tenant.

I know in Michigan that the gas company must inspect all gas appliance installations and they charge for the inspection. The inspections are required under our safety codes.

 

[Joz]

When I first saw the $408 (+ 10% charge) for the stove, I asked my contractor (doing rehabs for 10 or 15 years in MS), if this is normal. His response, "Never".
Plus, the 2 permits pulled on this house were each $40 and not the $150 the PM is charging for. The permit that they are unable to show me.

Would I have any legal issues if I posted this experience on Real-estate Investing forums? People ask for PM recommendations, and I think this one is one to avoid. The PM wanted to discuss this on the phone, but I insisted emails and glad I did.
Thanks for the response.

 

[quincy]

When I first saw the $408 (+ 10% charge) for the stove, I asked my contractor (doing rehabs for 10 or 15 years in MS), if this is normal. His response, "Never".
Plus, the 2 permits pulled on this house were each $40 and not the $150 the PM is charging for. The permit that they are unable to show me.

Would I have any legal issues if I posted this experience on Real-estate Investing forums? People ask for PM recommendations, and I think this one is one to avoid. The PM wanted to discuss this on the phone, but I insisted emails and glad I did.
Thanks for the response.

I suggest you carefully review the state laws and the city ordinances on gas appliance installation.

I would not post anything derogatory about the property manager on any real estate forum, certainly not without doing far more research. You should keep in mind that personal and business reputations are valuable. You do not want to harm someone’s reputation by publishing any false facts.

Have you ever visited the house you invested in?

 

[adjusterjack]

Would I have any legal issues if I posted this experience on Real-estate Investing forums? People ask for PM recommendations, and I think this one is one to avoid.

Better read your contract with the PM first. What you signed may have authorized him to do what he did and charge you for it.

 

[Zigner]

Better read your contract with the PM first. What you signed may have authorized him to do what he did and charge you for it.

Just to expand on this...by "charge you for it", that means charge you for his time as well as the cost (plus markup).

 

[LdiJ]

Just to expand on this...by "charge you for it", that means charge you for his time as well as the cost (plus markup).

I don't think that is the way that property management normally works. They normally get a percentage of rents for their work and get reimbursement for expenses, There are variations I am sure but the whole labor and markup model generally would not fit. They would have no incentive to stay within a budget if so.

 

[Zigner]

I don't think that is the way that property management normally works. They normally get a percentage of rents for their work and get reimbursement for expenses, There are variations I am sure but the whole labor and markup model generally would not fit. They would have no incentive to stay within a budget if so.

If the stove breaks, the property management company is going to charge the owner for the costs of replacement in addition to the normal rental percentage they receive.

 

[quincy]

I don't think that is the way that property management normally works. They normally get a percentage of rents for their work and get reimbursement for expenses, There are variations I am sure but the whole labor and markup model generally would not fit. They would have no incentive to stay within a budget if so.

Property managers are typically salaried, at least in Michigan. Anything that needs repair or replacement will come out of the rent collected and not the property manager’s salary.

 

[LdiJ]

Property managers are typically salaried, at least in Michigan. Anything that needs repair or replacement will come out of the rent collected and not the property manager’s salary.

Most landlords don't have sufficient rental properties to support a salaried property manager. That is why its normally a property management business that takes on clients for a percentage of the rents. The salaried ones usually work for apartment complexes and the ilk.

 

[LdiJ]

If the stove breaks, the property management company is going to charge the owner for the costs of replacement in addition to the normal rental percentage they receive.

Yes, that is why I said that they get reimbursed for expenses. Are you assuming that most property managers have repair people on staff? That is not the norm unless its a really large property management company.

 

[Zigner]

Yes, that is why I said that they get reimbursed for expenses. Are you assuming that most property managers have repair people on staff? That is not the norm unless its a really large property management company.

I'm not sure what you were disagreeing with then. It's not uncommon for folks to mark up purchases.