Pitfalls To Avoid When Choosing A Property Manager

Posted by Ginny Hunter Tuesday, August 30, 2016

Everyone loves a good story. Especially when the story is filled with surprises, twists and turns, and a valuable lesson.

The following is a true story about a couple who purchased their dream home to retire in a few years before actually retiring and decided to rent it out in the meantime. Because the clients lived in a different state from where their new home was located, they needed a local property manager to look after the property and their interests.

The clients decided to hire an independent property manager who was very personable and claimed to have many years of experience managing single family residential homes.

Fast forward, the lease of the first tenant was expiring, and a new tenant was moving in soon; so the owners decided to take advantage of the time the home would be unoccupied to enjoy a trip to the home and check around the property for any maintenance and landscaping needs prior to the new tenants’ occupancy.

Al Fresco Dining With an Unexpected Twist

Upon their late afternoon arrival at the home, the couple noticed their wrought-iron patio table and chairs weren’t on the elevated front veranda where they belonged. The clients discovered the furniture had been moved to the back patio of the residence, under the portico patio beside the bubbling reflecting pond. Their rustic cedar picnic table and benches had been moved to the side of the residence. That didn’t seem to be a big issue, so they went about dressing the wrought iron table with candles and such and began preparing their dinner. However, when they returned to the table with plates and wine glasses and pulled out the chairs to be seated, the entire table collapsed, sending candles, utensils, plates, and glasses crashing to the flagstone patio floor. They realized that the chairs had been used to prop up the table to disguise that the crossbeam leg juncture was broken during the process of the tenant's moving it.

The next morning, in the light of day, the owners noticed a few more things about the property that were very disturbing. The main entry to the residence is a series of steps and landings leading to the door. On the first landing, they noticed a cloudy white marring of the painted stucco and what looked like water calcification on the Saltillo tile floor. At ground level, they noticed a black outline on the Saltillo tile. The couple immediately called the property manager and asked him to come over to see what they had discovered.

The Importance of Hiring a Professional Property Manager

After arriving at the home, the property manager inspected the three damaged areas of concern. The property manager stated that he didn’t know about the broken table and hadn’t noticed the discoloration on the ground-level entrance. However, he admitted knowing the tenant had put a functioning water fountain on the first landing to the entrance but didn’t think to alert the owners.

After the owners contacted several contractors, they found out that the table could be fixed with a simple weld. They also determined that the black discoloration was paint from the tenants’ DIY spray painting project on a pair of Chinese “Foo Dogs.” Fortunately, the paint was able to be removed from the tile, but not the concrete. The cloudy marring of the stucco wall was the result of continuous splashing from the fountain. Fortunately, there was no seepage or subsequent mold damage behind the wall or into the crawlspace under the front veranda. But unfortunately, the discoloration of the stucco wall required repainting of the entire side of the residence.

Happy ending? Not for the property manager. After much discussion, during which the property manager tried to minimize the tenant’s negligence and his lack of care in executing his management responsibilities, the property manager was fired. Not a happy ending for the owners either, who had to pay for the repairs out of pocket.

Lessons learned? Hire a professional property manager or firm that advocates for you, the owner — not the tenant — and whose contract includes at a minimum:

Clearly written and agreed-upon contract terms outlining expectations, duties, and responsibilities of the property manager including frequency and extent of inspections and reports. Contract terms should include a "check-in and check-out" punch list to be reviewed and communicated with the tenant at the beginning of the lease and the end of the lease.
A list that includes “dos and don’ts” regarding the use of specific property features and furnishings inside and outside that becomes part of the rental agreement.
Agreed-upon list of contractors to be utilized for regular maintenance issues and pre-authorized monetary limit for services not requiring owner’s sign off.
Monthly statement to owners outlining collecting rent, repair work, etc., for year-end tax accounting purposes.
Information and instructions for the tenants regarding the proper use and operation of pools/water features, outdoor areas, alarm systems, and electrical systems.

Lastly, understand the legal requirements for security deposits and your rights in withholding all or a portion of the deposit in case your property is damaged by a tenant. Also, here are a few property management checklist examples available online to get you started:

Related to: Individuals and Families