From time to time, we all have to bring a new property from one Phoenix property manager to another. If it has not happened to you yet, it will happen at some point. The biggest problem is making this transition smoothly. Unfortunately, some of these transitions happen worse than others.
Earlier this year, we had an example of all the ways that this transition can go wrong. An investor reached out to us because he was interested in our services. His property was like another one we currently served that was extremely successful, so we were instantly interested. He selected us as his Phoenix property management company, and then told his current manager that they were terminated. She instantly exploded.
She might have called herself a property manager, but she was decidedly not a NARPM® Member. The “manager” was a well-known broker in the area, but her behavior for the next month was like something out of a bad movie. When the client told her about the transition, she sent him pages of reasons why he was the problem in their relationship. Convinced that he owed her money, she hired counsel. Then, she said that she was moving to a new office. Her next excuse was that she was unavailable because of a medical problem. Worst of all, the property was sitting vacant and during the last month of her management, she refused to look for a new tenant and also refused to give us keys so that we could start advertising.
For four weeks, our new client had to put up with this behavior. On the very last week, her assistant showed up with almost all of the paperwork. The move-in documentation was missing. When our client asked for that paperwork, she said that she did not keep that kind of documentation. This meant that there was no proof of the property's condition when they moved in. The landlord would have to let his tenants keep the entire security deposit because he could not prove that the property started in excellent shape.
As your Phoenix property management company, we want to make sure that your transition is an easy one. A script or checklist can help you make sure that you get all of the documentation you need. Each time you terminate management services, we recommend that you request these forms and name our company as an authorized party for receiving them.
Your Transition Checklist
Make sure to get your tenant's contact information so that you can tell them that you are the new property manager. You need to let them know that you will be in charge of maintenance calls, the security deposit and collecting rent.
Hopefully, the tenant will have a lease agreement. This lease shows what their late fees are, when the late fees start, their rental payments and so much more. You need this information to make sure that you do not violate the terms of the lease.
This is one of the most common issues. A property needs proper move-in documentation for us to get damages if the tenant breaks something. This includes an inspection record with any written items, photos or video. It should have the condition form and the tenant's inventory. It seems like non-professional managers never take or keep this documentation. If they do not have it, then the owner is the one who ends up paying for that mistake.
When tenants owe the owner money, it should carry over to the new management company. Sometimes, we receive handwritten ledgers that are illegible. This is not professional or fair to our clients.
Obviously, you need keys to the property you own. Unfortunately, we have encountered many property managers who do not have keys. In some cases, they have the keys and refuse to give them to us. Then, we end up having to re-key the property.
Most of the time, it is the property manager who holds the security deposit. We are required to track the disposition of the deposit within 14 business days of the tenant leaving the property. If we have to wait for a client to send us funds, it puts us in a risky position. We always ask for the deposit whenever we take on an occupied property.
Some managers think that it is not necessary to pass on the original application when the property is transferred. Other people are worried about transferring personal data. When we transfer a property, we provide this information when asked, but we black out material information like date of birth and social security numbers.
This might not be a checklist item, but it is extremely important. Everything needs to be done in a smooth, timely manner. We need time to let the tenant know that they will be paying rent to a new location. When the old property manager stalls the process spitefully, they are operating in an unethical manner.
If there is a tenant at the property, then most of these transition items are necessary. When the property is empty, you only need the keys to make the transition. We are all in this business together, so we need to cooperate to make everything easier for our clients.