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A very long story, but essentially a tenant moved out due to carpet smelling (he felt it was uninhabitable) even though we (the owners) agreed to replace the carpet. The property managers we had working the property were dealing with it. After this whole situation we became unhappy with property managers and terminated our agreement with them for renting property moving forward. Property manager is now saying it is our responsibility to settle this with the prior tenant.
Would the contract and therefore the deposit etc, been a contract between the property manager and the tenant, not the owner and the tenant? Is there anything I can do at this point? (tenant is threatening to take us to court over the deposit) Should it not be the property managers who are settling this since they were the ones who held the lease? Our names are not listed on the lease anywhere.
Anyone else dealt with this?
Usually the answer is in your state laws. Most times it goes like this. The PM company is responsible for the deposits and such if they were the ones responsible for it during the tenancy. If the owner terminates the PM agreement, the owner is now responsible for deposits. The tenant is entitled to their deposit returned per their lease agreement and state laws as for time and deductions. Who ever is the person controlling the tenancy unit at the time of terminations (PM or owner or agent) is the one the law will hold responsible. What happens to the deposits between the old PM company and new owner or agents is between them, not the tenant.
This is where lots of new LL get in trouble when they terminate relationships with PM companies or agents they forget that the laws usually holds the person in control of the property when the lease terminated as the responsible party. What the Ll has to do to recover mony due from the PM usually has nothing to do with the tenant.
My issue is that our PM has sent us the deposit to make us responsible for the disposition of the rent. Although our agreement didn't terminate until after the tenant moved out. They are washing their hands of a very difficult situation. It sounds like they should be responsible for the disposition of the deposit under the law. The lease was signed by the tenant and the PM and all usual correspondence was between those two. I was only involved in making the final decision to replace the carpet.
Well if you have the deposit aren't you responsible for returning it if the deposit is due to the tenant? How can the PM company be responsible if they no longer are in possession of the money?
The PM company may be responsible for actually returning the deposit to the tenant since they were the ones handling the property at the time the lease was terminated, but you are responsible for paying it if you physically have the money the tenant paid. If you are trying to have the PM pay the deposit back to the tenant from their own pocket while you keep the original deposit for yourself, that isn't what the law is saying.
Don't confuse the action of paying the tenant with the cost of paying the tenant.
I'm getting lost here and the previous poster is imo getting close to what I believe is happening.
You fired the PM and the PM gave you the deposit. Now you have to deal with it.
Btw we are a PM company and always have the owners name listed as the Landlord and our company as the management company. Since in our State the lease requires the name of the owner...but we don't give out the address, phone number, etc. for the owner unless we only get it rented and the owner is doing the management themself.
Sounds like you picked a PM that allowed you to fire them with 30 days notice at any time. Probably sounded like a good idea at the time, but it also allows them to break free from you and from having to do more work for free. Finding and moving in a tenant is the most expensive and time consuming part for a PM. The stinky carpet was your fault. You should have cleaned the carpet and not put the PM in a position of having to try to get market rent for carpet that would run the tenant out once they got in. Once you fired the PM and they gave notice to the tenants that you would be taking over the next month, the tenants probably decided they did not want to stick around to find out if you the owner was trustworthy and going to follow through with the new carpet. After all, they originally rented from licensed professionals and now the tenants got a "bait and switch" when you fired the PM. This is exactly when you need the experience and help of your manager to keep the tenants calm until the move in repairs are done. You blew it! Your problem. Return their money.
I see a similarity for my situation, except when I gave 30 days temination notice to my Property Management company, (5 years managing the tenant they placed in my property) they want to move the tenant to one of their other properties that they manage. Seems absurd to me - who would pay for the moving costs? the tenant did not care if I chose another PM to manage the rental. Any thoughts on PM response to a termination letter?
I see a similarity for my situation, except when I gave 30 days temination notice to my Property Management company, (5 years managing the tenant they placed in my property) they want to move the tenant to one of their other properties that they manage. Seems absurd to me - who would pay for the moving costs? the tenant did not care if I chose another PM to manage the rental. Any thoughts on PM response to a termination letter?
So you are the owner of the property and the PM sent you this letter? What the PM suggested is absurd. I would just respond that this is not acceptable and you are not interested. However you may be liable for breaching the contract, however the remedy would certainly not be the tenant being moved like a piece of livestock, LOL.
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