Sometimes the owners of rental properties are too trusting for their own good. You, as the property manager, undoubtedly know what I’m referring to. But that’s why the owner hires you to begin with. They don’t want to have to deal directly with the resident-tenant, right?

For this article I wanted to share a true story that demonstrates why it’s imperative to protect your clients from situations where the resident says something like, “We don’t need it in writing. I have great references and my word is as good as any document.”

In this story it was the Property Manager’s idea that in special circumstances an arrangement between an owner and a tenant was a workable idea. Arrangements and special circumstances are the issue in the following story, which I think you’ll agree sounds more like a nightmare.

“My father’s property manager presented him with a tenant who was willing to make repairs on a property in exchange for a reduction in rent for a period of 12 months. This wasn’t my father’s first experience with such an arrangement and he knew this was a risky venture however the Property Manager assured him that this was a good deal and that the tenant had done work for him in the past and he felt confident that [the] tenant was able to meet Dad’s requirement’s. Dad agreed to this arrangement based on the manager’s recommendation. My Father agreed to pay for all materials necessary to clean, paint, and to make some cosmetic repairs to the home and the tenant agreed to provide all the labor in exchange for the discount. I’m sure you can already guess what happened but I’ll fill you in anyway. The tenant proceeded to gut the house, removing everything he felt needed to be replaced. I was able to stop him before he yanked out all the kitchen cabinets. When I went into the house I saw that he had taken out chunks of drywall so he could search for mold. I later found out that the property manager had given back the funds (first month’s rent and deposit) so the tenant could purchase supplies as well as paying for labor of two people he had hired to do some of the cleanup work. After three weeks of waiting for work to be completed I decided to have a discussion this with the property manager, which didn’t go well. [The manager said] ‘Either we go through with the deal or he would quit. My dad decided to stop the madness … so the Property Manager quit. He did, however, agree to pay for replacing all the drywall, a small token compared to the condition [of] the house now. He also left us dealing with the tenant who wants to continue with the arrangement or he wants his deposit and rent back. Oh and to make matters worse, there’s nothing in writing about the arrangement other than the standard lease agreement.”

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