What Does a Property Manager Do Anyway? Part 3 of 3

For the conclusion of our 3-part series on what the typical responsibilities of a property manager include, we will be covering the end of lease turn. This process is one of the most hectic periods and is usually the time when most legal issues can occur. Having the move out process handled correctly and efficiently can save you thousands of dollars in both possible legal costs, vacancy expenses, and damage charges.

The Notice Period:

Delivery or Receipt of Move out Notice: Depending on if the tenant is giving notice to vacate at the end of the lease, or if a forceful move out is being delivered to the tenant, a notice to vacate will be required. The manager will either receive the notice from the tenant, or deliver the notice to the tenant in accordance with the lease provisions. Typically, a 30 day move out notice is required which means that under most circumstances there should be plenty of time make arrangements for the move out. During this time, the manager will be preparing the final charges, estimating the possible repairs and lining up tentative schedules for cleaning, repairs, and any major projects the manager may know about from past inspections. The manager should also be reaching out to the owner of the property to notify her of the house becoming available again. This allows the owner time to prepare financially for any vacancy and repairs needed, as well as to determine if the property should be leased again or if some other possible course should be taken (sales, moving back, etc.).

Listing the Property: As was done in the initial listing of the home, the house should be put back on the market. At this time, a new price evaluation will take place to make sure that the house is still competitively priced, and the advertising process will start again, following the procedures outlined in Part 1 of our guide. Showings will be arranged with the tenant while they still occupy the home, and tenants will be screened in accordance with the guidelines of the company. The goal s to have a tenant signed up and a lease prepared for move-in within 3-10 days after the vacancy. This allows time for the cleaning to complete and the home to be made move in ready for the new tenant.

The Possession Period:

Possession: Once the tenant has returned keys to the manager and made final notice that the house is vacant and ready for possession by the manager, a new inspection will be conducted at the property. This inspection covers the entire house front and back, inside and out. The primary goal of the inspection is to determine what work is necessary to bring the house back to it’s original condition prior to the tenant moving in, and who is responsible for making the repairs. Generally, cleaning, carpet cleaning, light bulbs, air filters, touch up painting, and other minor issues are at the expense of the tenant, along with any major damages that can be reasonably attributed to the tenant’s misuse or neglect of the property.

Repairs/Cleaning: Once the inspection has been completed, the repairs noted in the inspection will be scheduled by the manager and coordinated with the contractors. This process is very time sensitive, as the longer it takes to complete the process, the harder it is to find a renter, and the longer potential vacancy one will endure. If not managed correctly, the process can amount to significant losses to rent and turn away possible renters who are not seeing the property in ready condition. Once the repairs are completed, a new inspection will be scheduled to ensure that the home is ready to rent, and new listing photos will be taken of the home in now move in ready condition. These photos will be updated in the advertisements listed above.

Deposit Claims:

Invoicing/Deposit Preparation: Once all of the repairs have been completed, and the owner has been notified of any possible concerns regarding the property, a final accounting is done of the invoices that were generated due to the property not being move in ready. These invoices are then analyzed to determine what portion of the bills will be charged to the tenant, and against the deposit that was collected when the tenant moved in. This process is one of the most important steps in the move out process, and also is the most prone to legal disputes and claims, and if not handled correctly and within the time constraints of the Landlord-Tenant Law, can result in an owner forfeit of the entire deposit. Once the damages have been assessed an “Intention to Claim a Tenant’s Security Deposit” letter must be drafted and sent certified mail to the tenant. This must occur within 30 days of the tenant vacating the property.

Disputes and Disbursements: Once the claim letter has been sent, any remaining deposit not used in the claim process must be returned to the tenant, and the balance owed by the tenant will be collected and disbursed to the owner’s account to cover the expenses incurred. In the event the tenant is unhappy or disagrees with the claim disbursement, the manager must now receive a notice to dispute from the tenant, and begin negotiations or defend the original claim made. This process is made or broken by the inspections that were completed at the time of move in and the follow-up inspection that was completed during the move out. Once the dispute has been settled, the process is ended and the house is ready for occupancy. If the dispute is not resolved, it can result in court proceedings to decide the fate of the deposit. While rare, the disputes can escalate quickly if not handled with care.

Collection of Unpaid Funds: In the event the deposit is not sufficient to cover the damages caused by the tenant, a balance may be owed by the tenant. An initial claim will be made to the tenant to try and collect on the unpaid balance. In the event the tenant is unwilling or unable to pay the balance, alternative collection measures should be taken. Contact your manager to discuss options available, such as Third-party collections or Small Claims Court. In many cases, mangers are not legally allowed to act as debt collectors or practice law, which leaves the collection of unpaid funds up to the owner or a third-party service.

Final Make Ready: The house should now be ready for a new tenant and advertising should be well under way. The process has now completed it’s first cycle, and will be moving towards the start of the cycle again, and this entire process begins again.

IMPORTANT CONSIDERATIONS FOR AN OWNER DURING THE TURN:

  1. TIME SENSITIVITY – The move out process is very time intense, both during the notice phase, and especially the deposit phase. If any considerations need to be made, please notify the manager as quickly as possible to avoid problems.
  2. NORMAL WEAR AND TEAR – One of the dark clouds in property management is the assessment of “normal wear and tear”. Since the definition is not clearly defined in the Landlord-Tenant Law, each manger and company may define this differently. Charges for normal wear and tear cannot, by law, be charged to or deducted from a tenant’s deposit.
  3. TENANT DISPUTES – Deposit disputes can be a common occurrence. Even with detailed reports and inspections, tenants may still dispute charges. An owner should be notified quickly by a manager if initial negotiations are not able to pacify and resolve disputes. Legal proceedings should be a worst and last cast option.

 

RE/MAX Infinity Property Management is a full service property management firm serving Santa Rosa and Escambia Counties in Northwest Florida. We service homeowners, investors, and military personnel that have a need for professional and hands-on management services.

Written by RE/MAX Infinity

Jason has been involved in Real Estate since 2005 where he quickly became a multi-million dollar producer within his first full year. He graduated from the Realtor Institute a few years later and then went on to achieve his Broker’s License in 2009. In 2008 he was asked to start up and lead the Property Management Department. He served on the Board of Directors as President for the local chapter of the National Association of Residential Property Managers for 2014 and is readily available to meet and speak with clients.

Written by RE/MAX Infinity

Jason has been involved in Real Estate since 2005 where he quickly became a multi-million dollar producer within his first full year. He graduated from the Realtor Institute a few years later and then went on to achieve his Broker’s License in 2009. In 2008 he was asked to start up and lead the Property Management Department. He served on the Board of Directors as President for the local chapter of the National Association of Residential Property Managers for 2014 and is readily available to meet and speak with clients.