Property Manager Backing Out Becuase of Un-Authorized Suite

[jarrettvaughan]

I am facing a couple recent road blocks and would like some advice.

I have 4 properties (5 doors) in the Fraser Valley which are all managed by the same company (I am living in France). I have a suited house that has an unauthorized suite and the tenants are having petty issues with each other (snow shoveling, parking, laundry times, yard sharing). The upstairs tenant has now deemed the situation irresolvable and says he will give notice when he finds another place.

The property manager refuses to get involved with these issues because these tenant were living in the house before he took on the management and says that these things should have been dealt with in the contract (fair enough). He has also now given his notice that he will no longer manage this property because of the illegal suite and the fact that the issues will never go away and it is not worth his time. He is willing to continue to manage my other properties but is also willing to give them all up if that is what i want. He also recommends that i allow the tenant to move-out without penalty (he is breaking the lease) as he thinks they will call the city and get the suite shut down.

Should I leave the property manager entirly or let him manage the other 3 properties (could be a great inconvience switching all properties to a new manager from over seas)?

Should I challenge this tenant and try to recoup all I can and risk having the suite removed?

Should I expect the property manager to work hard for me anymore, now that he has shown signs of disinterest in me as a paying customer (i have had no issues with this manager to date)?



I would love to hear everyones sugestions. Thank you so much for your help!!!

 

[ChrisDavies]

I`d let the one suite go, and see about other management solutions for the single, such as a friend. Good management is hard to find, and if you`re having no other issues, the pain of switching is significant.

Let the tenant go, as what you`re likely to recoup won`t outweigh the time, effort and potential problem.

Expect the property manager to behave like a professional. He did the same cost/benefit analysis you did. Being a property manager is a numbers/volume game, and if there`s units that are consuming unreasonable amounts of time, then the ratio goes down, and it makes sense for him to cut it loose. Now, if you`ve got 100 units, the potential is higher, but neither you, nor I are there yet.

 

[HeatherBrandt]

Hi Jarrett,

You are in a tough situation! We have similar properties and this is what I have learned:

1. Unless both sets of tenants are of above average emotional maturity, there will be fighting. Property managers recognize this and charge accordingly for the PITA factor (ours raised rates to 12 %) or only give them as much attention (time) as they can afford.

2. When issues first arise, tenants need to be informed that they need to talk to each other first about issues, especially if is something not covered by the contract. If that doesn`t work, someone can mediate a meeting (owner or manager). Both parties need to bring concerns in writing. If they refuse to meet or stand behind their complaints, they need to know there is little that can be done. If anything illegal is occuring, they need to contact the police first, then owner/manager. If there is a problem the owner can fix, fix it (ie are they fighting over laundry because the set is really old and takes forever to do).

3. Do not take sides, even if you think one party is totally in the right. Sometimes the tenant with more charisma/communication skills will snow you. There is a good chance of being so completely "taken", you will question your judgement.

4. IF the tenant threatens to _______ (leave, tell on you), tell them that they must do what is best for them. Either you will have an uphappy tenant leave or they may stop complaining. The ball is in their court. The focus needs to remain on a solution for the problem, not who is right or who the owner/manager believes. The house may need to be emptied and start over!

5. Assume the tenant is going to report you to the city and base your actions on that assumption. It`s going to happen sooner or later!

I personally wouldn`t charge for breaking the lease, but I wouldn`t tell the tenant that (they need to assess their unhappiness based on the facts in front of them). They may cause damage to your place (which your security deposit will cover a tiny bit) and then you will have to go after them to get the rest. Both tenants may do something stupid which might lead to an eviction (we had one who`s boyfriend decided to rig the furnace so it was really hot in the basement, this was the tenant we would have preferred to keep). Whatever action you take, you will likely lose money and be really irritated, your goal is to minimize both. I found it was the anger about the situation that has cost me the most.

More of a concern is your manager`s frustration. Hopefully he has tried to mediate and has failed. If he has refused to mediate at all, I`m hearing warning bells. The reason many people go to a manager is that there is a problem that needs to be fixed! Would the manager consider staying on if tenants could be turned over as soon as possible and the manager has control of who gets in? Does the manager have suggestions to fix the problems for future tenants (better contract, schedule for laundry use, etc?).

If you go to a new manager, I`d vote for moving the problem property alone and then assess. You will probably pay a premium, but you will see how a new manager sorts out the problems. Then you can move the others or give new properties to him/her. Do you have anyone nearby who can drive by the property and email you what they see? Hard to assess the situation from France.


Hope this helps,

Heather

 

[NorthernAlex]

Heather, great post. Thank you.

 

[housingrental]

All posts are good...
I`d also recommend letting the tenant go...Why risk permanently losing 1/3 revenue generation for potential of a few more months rent from one unit?
If the PM is doing a good job at other 3 you should keep them on and see what they need to continue on at 4th...
Re other posts.. Time = Money... and if you quoted on one job and got another from client you`d resign too.. Kinda like the contractor who`s redoing a kitchen wants more $$ when you want new lighting and floors also... There`s only so much work that can be done for a few hundred a month and if your property is setup in a way that chronically doubles the expected time to manage you should pay more

 

[jarrettvaughan]

Thank you so much for the posts.

I have decided that I will take your recommendations and let the tenant go and keep the property manager for the other 3 properties and move on.

You posting have been very very helpful and I really appreciate that sound and experience based advice.

I have had someone drive by the properties and everything seems to be in good working order. I believe that this situation will really help me in the future as I has taught me a lot.

One last question.

What kind of guidelines do you have on your tenants for suited houses. Laundry, yard maintenance, garbage removal, snow removal, yard usage, how can put there "trinkets" in the yard and to what extent etc etc?????????

 

[HeatherBrandt]

Aren`t suited houses fun! The tenant dynamics can be wild.

I think you`re asking the million dollar question. I have seen all variations on assigning the jobs. Because these issues need to be included in the lease, I believe a manager would want both parties responsible. If one side is taking care of the yard, they aren`t happy when the other is using it. On the other hand, do you expect both parties to purchase a lawn mower and snow shovel? It has to be made clear upon signing the lease. Generally the upstairs people take control of the yard, because they are the ones who want the benefit.

Sometimes our manager has split shovelling duty and lawn care (upstairs-front, downstairs-back). Both should be responsible for common areas and laundry (generally nobody is). Garbage is not allowed to be stored by either party. No non-working vehicles. Warning sent in writing when mowing and shovelling not done in a timely manner. Decide with your manager and keep it the same for all suited properties. We put sheds on all our properties so each unit has secure outside storage.

You/your manager will need to develop a spiel about the advantages and responsibilities of living in a suite property.

For example-this property gives you a 3 (or 1) bedroom suite with utilities included/shared cost, free laundry, storage shed/garage, offstreet parking, yard access in a lower density neighbourhood at a lower total cost than a duplex/townhouse/single family home. In order to get all these benefits, you must share a wall/ceiling/floor with another tenant. It requires mutual respect regarding property, common areas, and noise levels. You get the benefit of another person knowing if something is wrong with the property and acting on it (something wrong with the furnace) and having someone on the property when you are away. On the other hand, if a point in the lease is broken (pet snuck in , smoking), it will also be noted sooner. Let`s face it, a single family home/quality apartment building is the best because you get to control all four walls. With a suited house, you get most of the amenities. You`re trading part of the cost for some sweat equity of getting along with another person.

And close the deal with "is this the place for you?".

It never seems to end. If tenants really grate on each other, it`s best if one/both leave and start over.


Heather




QUOTE (jarrettvaughan @ Jan 11 2009, 09:05 AM) Thank you so much for the posts.

I have decided that I will take your recommendations and let the tenant go and keep the property manager for the other 3 properties and move on.

You posting have been very very helpful and I really appreciate that sound and experience based advice.

I have had someone drive by the properties and everything seems to be in good working order. I believe that this situation will really help me in the future as I has taught me a lot.

One last question.

What kind of guidelines do you have on your tenants for suited houses. Laundry, yard maintenance, garbage removal, snow removal, yard usage, how can put there "trinkets" in the yard and to what extent etc etc?????????