Property Management Disputes

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 What Is a Property Manager?

Whether you are a tenant renting a residential property or a business owner leasing a commercial space (e.g., an office), you will likely need to interact with and enter into a lease contract with the owner of the property (i.e., the landlord). In some cases, however, a landlord may use a property manager as their middleman instead. In other words, the landlord will send the property manager to deal with tenants and issues on the premises. 

In general, property managers will perform tasks, such as:

  • Collecting rent;
  • Overseeing eviction actions;
  • Coordinating moving schedules;
  • Responding to tenants’ maintenance requests;
  • Mailing late fee notices for overdue rent payments;
  • Assisting with residents who are locked out of their unit; and/or
  • Providing basic maintenance services like landscaping or repairing communal areas.

In addition, just because a property manager is not the actual owner of a specific property does not mean that they will be free from liability for not doing their job or violating a law. Thus, suing a property manager is a possible option if you are having issues with your rental place. 

How Does the Property Management Dispute Process Work?

Depending on the jurisdiction, most property managers must comply with the provisions of property management law in their state. However, the majority of property management disputes tend to follow the same process. 

First, property managers must follow the regulations and requirements enacted in their particular state. Property managers usually must abide by any laws that a landlord does and vice versa. Once a property manager is sure that they have complied with the necessary laws, they should then consult the tenant’s lease agreement. 

If the lease agreement does not provide any sufficient answers, then the property manager should attempt to work it out with the tenant by calmly discussing the issue with them. Property managers should strive to stay professional and to keep written accounts of all communications with tenants. 

In the event that a tenant files a lawsuit against a property manager, the property manager should either hire their own attorney or work with the attorney provided to them by the management company. Oftentimes, an attorney or the court may recommend that the parties try to resolve the problem by attending mediation. 

If the issue cannot be resolved and the tenant insists on pursuing a lawsuit, the property manager should listen to the advice of their attorney, gather as much evidence on the issue as possible, and ask their attorney about whether there are any defenses they can raise against the tenant’s claim.

The majority of property management lawsuits are based on a claim for negligence. Thus, the property manager will want to ask their lawyer for defenses to negligence and to collect any evidence that will disprove the tenant’s claim or prove that the tenant contributed to the issue.

Lastly, keep in mind that every jurisdiction will deal with such disputes differently. Therefore, it is important that a property manager speak with a lawyer before attempting to handle the case on their own.

Common Property Management Disputes

Generally speaking, property managers tend to favor profits over tenant satisfaction. Thus, it is no surprise that property managers are often at the center of many property disputes. Some common examples of property management disputes may include:

  • Eviction issues: Eviction issues are one of the main causes of property management disputes. Disputes over an eviction may involve procedural issues that make the eviction action illegal (e.g., improper notice), self-help problems (like when a landlord changes the locks), or removing a tenant’s personal property without their consent and placing it on the curb. 
  • Maintenance problems: Maintenance problems may refer to actions, such as failure to maintain the premises, failure to respond to maintenance requests quickly and thoroughly, or simply ignoring a tenant’s maintenance issue entirely. 
  • Housing code violations: For example, not providing heat or hot water to tenants in the winter is grounds for liability in many jurisdictions. 
  • Miscellaneous issues: Some other issues that may arise during property management disputes include failing to screen employees (e.g., doormen or supers), using suspicious rent collection practices, refusing to resolve disputes between neighbors, and/or entering a tenant’s apartment without proper notice. 

Can An Owner Sue A Property Management Company?

The owner or landlord of a rental property may also take legal action against a property management company. Although the law and requirements in these cases can vary widely by state, they usually involve a breach of contract claim. For example, if a property manager or the company failed to fulfill the duties of their employment contract, then the owner can bring a lawsuit for breach of contract. 

A landlord may also be able to sue a property manager based on a theory of respondeat superior. For instance, if a property manager failed to do their job and the landlord was sued by a tenant as a result of their actions (or in this case lack of action), then the landlord may be able to recover damages from the property manager to reclaim what they had to pay to the tenant in the initial lawsuit.

Finally, an owner or landlord may also be able to file a police report if they suspect that their property manager or company is engaging in fraudulent activities when collecting rent. In which case, they will need to wait and see if the district attorney has enough evidence to file charges against them. 

Litigating a Property Management Dispute

As previously mentioned, there are a number of steps that a property manager should take before a dispute gets to court. Once the dispute ends up in court, however, the case will proceed in the same manner as any other type of civil litigation. Again, this will depend on the laws and procedural requirements enacted in a particular state.

After a tenant serves the property manager with notice of the lawsuit, the property manager will need to respond to their complaint. If the property manager does not have a lawyer at this point, now is the time to hire one as quickly as possible. The lawyer can explain and draft documents for this part of the process. 

Next, the parties will exchange documents as they answer requests for discovery materials. After both sides have reviewed all the evidence, they may either decide to settle the matter out of court or the property manager can try and get the case dismissed. If the property manager loses on this motion, then they will need to proceed to trial. 

On the other hand, the tenant in the case is the one to initiate the action. Therefore, they should have already hired an attorney before they filed a complaint and summons. After they do this and serve the defendant, they should prepare to argue against the property manager’s response. Again, the two parties will engage in exchanging documents to answer discovery requests. At this point, the tenant can also mention the idea of settling the issue. 

If the property manager refuses to settle and does not want to negotiate the matter outside of court, then the plaintiff will have a number of legal strategies available to ensure the case advances to trial where they may be able to recover various remedies. 

Do I Need a Lawyer for a Property Management Dispute?

Whether you are a tenant or a property manager involved in a dispute over property, it is in your best interest to hire a local landlord tenant lawyer for further legal assistance. A lawyer who has experience in handling property management disputes will already be familiar with the laws in your jurisdiction and thus will be able to walk you through the proper steps to take to resolve your property management issue. 

Your lawyer can also determine whether you have a viable claim, and if so, can help you prepare your case. Alternatively, if you are a property manager, your lawyer can conduct a legal search for defenses that you might be able to raise and can devise a strong defensive strategy.

Additionally, your lawyer can provide representation in court and/or during mediation or an arbitration session.

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