Yesterday, July 9th, I had to go to eviction court for an owner who had been self managing and had allowed the tenant to get 4 months behind in rent before hiring us to manage the property.
I always get there early so I can hear other cases and what the judge has to say. Two of them stood out:
1st – Tenant had withheld the rent to do repairs on the property that he claimed the owner had approved but the property manager knew nothing about. Judge asked if he had anything in writing between himself, the tenant, and the owner. The tenant said no. Judge said “sorry that this is going to be an expensive lesson but with nothing in writing you can not withhold any money from your rents. Do you have the difference due?” Tenant: “Yes”. Judge: “Will the owner accept the amount due?” Property Manager: “Yes.” Ruling: “Pay the rent now and dismissed.” Lesson learned: Put everything in writing. If it is not in writing it does not exist.
2nd – Tenant withheld money from rent for repairs – stove not working in February and AC not working in April. Judge to tenant: “Did you inform the management company of the repairs needed?” Tenant: “Yes, many times by phone and in emails and I stopped at the office.” Gives judge copies of all the emails. Judge to property manager: “Why were these items not repaired?” Manager: “We could not get hold of the owner for permission to do repairs?” Judge: Did you send someone out to look at the items needing repair?” Manager: “No.” Judge: “Why not?” Manager: “We did not have owner approval.” Judge: “State law says you are responsible for repairing items and health and safety items need to be repaired within 16 days. Are you aware of the law?” Manager: “It is up to the owner to decide if they want to repair.” Judge: “No, it is up to you to educate the owner and follow the law.” Judge: “Why did it take you so long to start the eviction process since she did not pay rent in April or June?” Manager: “Did not notice she had not paid rent.” Ruling: “2 months free rent, plus management to reimburse the tenant for cost of repairs, plus cost of the hot plate the tenant bought and the 3 fans she bought.” Judge also informed the manager that he was sending a notice to the Real Estate Division regarding manager’s lack of knowledge and for not protecting the owners interest. Lesson Learned: Put it all in writing. The person with the most details and proof wins.
Owners: Yes you may save a few dollars if you manage your property yourself but think about how much time is involved what your time is worth. Also think about what it will cost you if you do not do it correctly. In this case the owner lost 5 months rent – $25,000 ($5000 per month) plus eviction costs, my costs etc. And he has a vacant place. Also, if doing it yourself, make sure you do your due diligence before allowing someone to move into your property and never do a lease in the name of a corporation without making someone personally responsible for the lease and rents if not paid. In my owners case he got no info on the tenant and did the lease in a corporation’s name. A quick google search, once I got the property, told me the companies were fake and the tenant had just served time in federal prison, in Texas, for fraud and other things.
Tenants: When your property manager tells you to put it in writing it is not only for their sake but also to help protect you. Put it in writing – repair requests, move out notices, anything else. Put it in writing.