Friday, October 19, 2007


As you all know by now, our property managers in KY were--let's be kind here--less than competent. They were HIGHLY recommended by a contact I have at the local apartment association.

We had a great young man (21 years old) managing the property for a year. He worked for our train wreck of a first PM. When we fired her, we kept him on and he was the best manager who we ever worked with. Go figure!

Anyway, he had to quit for family reasons (or maybe he got tired of babysitting 49 tenants--and their friends) and gave us a two week notice. Unfortunately, it was about two weeks before I was due to give birth to our seventh child last year. There were complications with my pregnancy, too. So, it's safe to say that the timing of his departure really stunk!

In desperation, I called my contact at the apartment association and she sang the praises of the managers we hired. They were investors themselves and owned houses in San Diego. My husband and I both interviewed one of them and reviewed the contract with a fine-tooth comb. Since we thought so highly of the recommendation of our contact, we didn't call other references, nor did we have time. I delivered the baby in an emergency C-section just about when the transition was to take place.

The rest is history--or at least in this blog. I have never worked with such incompetence in my life. I don't know if they were trying to rip us off (YES!) or if they were just in over their heads (YES!). So, in an attempt to ensure that they are not recommended to other unsuspecting landlords, I sent an e-mail to the executive director of the apartment association yesterday. She had already agreed to accept a complaint from me. In order to give you some idea of our experience with the company, I have copied excerpts below.

Oh, by the way, the co-owner and on-site manager is on the board of directors for this apartment association. I have changed, or deleted, the names in this e-mail to protect the guilty (and my rear end--although, outlining my experience does not constitute slander). If you are thinking of hiring a property manager in Kentucky, please e-mail me and I will give you the name and location of the company.

". . . . .At first, we were pleased at the progress that Dave and Tom made with filling our many vacancies. However, within two months, we realized that, although they could easily occupy the units, they were incompetent at collecting the rents. Soon we were owed tens of thousands of dollars in back rents. In addition, our expenses went through the roof and a handy man was paid $20 an hour. We were charged for time that the handy man spent on other properties.

After the transition, it took five months of our asking before Dave transferred the Section 8 deposits to his management account. This caused us to incur bank charges on an account that we had to leave open to collect the Section 8 deposits. Taking care of this is a basic management duty.

After my husband paid a visit to the property, he found that the office was being used by ##### Management to manage another property. We were never told this. We also were not paid rent by the other owner and, even though Tom told my husband that we would not pay for a phone, we were charged for the entire phone bill. Worse, Dave just kept putting people in the units from whom he collected no rent. We began to wonder if he knew these people personally. There was no other explanation as to why he continued to fill the units and not collect the rent. My husband was on the phone with him repeatedly to no avail.

At this point, we were losing money and ##### Management was asking us to send them checks to make up for those who didn't pay the rent. In February, my husband handed Dave a check for $5,000 that was never reflected on any monthly statements until we asked about it in May.

Due to the gross mismanagement of ##### Place by Dave and Tom, in February, 2007, we listed the property for sale with Joe. We found out later that Joe and Dave and Tom are friends who all work for an organization called Real Source. In February, we were in contract on the building for $1,490,000. We had bought the property for $1,110,000 and had placed $200,000 in improvements. My husband was present for the inspection of the property. He explained to Dave that he was not to submit anything to the agent or buyer without permission from one of us. After the inspection, the buyer asked Dave directly for a rent roll. He sent her a rent roll with a detail of back rents that were owed to us by tenants who were currently paying rent. This one erroneous fact caused the buyer to cancel the contract. We sold the property this month for $1,075,000, which was over $400,000 less due to Dave's mistake.

Starting in January, 2007, we asked Dave to obtain estimates to resurface the parking lot. This request was completely ignored for three months, as we repeatedly asked. Finally, in May, 2007, my husband became insistent. Dave claimed that every asphalt company in town was too busy to give us an estimate or start on the project, except for one. My husband had to call other companies himself from California in order to have them submit their estimates. Even though Dave and Tom stated that they would follow-up, they did nothing until we acted.

My husband paid another visit to the property in June, 2007. At this announced inspection (he never just dropped by), he found a motorcycle parked in a vacant and "down" unit. Dave claimed that he didn't know how it had gotten in there, even though the person who owned it needed a key to access the apartment. My husband also walked into a supposedly vacant unit with the air conditioning running full blast, all of the lights on, with sparse furnishings. Dave claimed not to have any idea of how that occurred. My husband also found that Dave gave the key to a vacant unit to a tenant because his shower was inoperable and he was forced to perform his personal hygiene in the apartment next door. Dave also allowed the apartment complex next door to store a boat in our parking lot without asking us first or charging a storage fee.

The accounting statements were wrought with errors, which surprised us because we were told that Dave is an accountant. We would have to ask for things repeatedly (like bank statements in the file from previous management). After January, we never received an itemization of maintenance and repair costs. We would be told that they will work on it, then they wouldn't and we would have to ask again. I have a trail of e-mails to prove this point.

Many times Dave would not pay the mortgage on time, but neglected to tell me. As soon as they took over, I had to ask him repeatedly to pay the mortgage, which was over 30 days late. I would find out from the bank and have to ask Dave to send in a payment. Finally, in August, Dave informed me that he would not pay the mortgage because we owed him money due to the fact that he had not collected the rents.

In January, there was police activity at the complex. We were not informed of this until someone else called to let us know. This happened again last month.

Although we pay for landscaping, my husband would find weeds in the planters, without any sign of a landscaper being there for some time.

In July and August, I was able to find a buyer through another agent and negotiate the contract myself. However, in the middle of the contract, I received a letter from the county Department of Public Safety with a list of repairs that needed to be completed to a unit before we could close and transfer title. This tenant had requested repairs on numerous occasions and called the county in desperation that management would not repair the unit for health and safety issues. A week later we received another letter from a different section of the Department of Public Safety regarding trash, debris, and furniture on balconies and porches, and junked vehicles in the parking lot. This was surprising to us since, starting in January, my husband had asked Dave repeatedly to have the balconies and porches cleared. As usual, Dave said he would, but didn't act. This was an ongoing occurrence, i.e., we were promised one thing, but neither Dave nor Tom would deliver.

Due to Dave's inability to collect rent, he and Tom requested that we have title cut them a check for $15,000 from our proceeds. We agreed because our understanding was that there would be outstanding bills after the close for which they would be responsible. Dave paid the electric bill, picked up the check from title, and then canceled the payment, so that we would owe the utility company over $4,500. Dave refused to pay this bill, even after I contacted him to explain that our understanding was that he would pay the utilities. He only paid the bill in order to transfer the account to the new owner. Then, once he collected his payment, he tried to charge us for it twice--once to him and once to the utility company directly. . . . . ."

If I hear a response from the apartment association, I will be sure to share it with you. Hmmm, I wonder who they will believe--one of their very own board members or me?