In the last few days I have been receiving calls and e-mails request property management quotes in the Akron Ohio area. Normally that would not be an unusual event. But this time was different. Each was telling me the same story. They had just received an email stating that their property would no longer be managed by the company they hired. There was no explanation given in the e-mail. After some investigation it was determined that the management company had filed for bankruptcy.
Lack of Specific Information
The property owners have some general knowledge of what is going on at their property but no specifics. No tenant names, no leases, no keys, no idea whether their tenants have paid the current month’s rent to the now demised management company. We were able to go to each of the properties determine if it was occupied or vacant and in some cases speak with the tenant. In the case of the property being vacant we will need to drill out the locks and rekey the unit. Where tenants were available we got copies of their leases.
How to Protect Yourself as and Owner
Look for the warning signs that there might be an issue. Are your financial statements not coming on time? Is there an issue with your bills being paid when you have sent money to pay them? Are the phones being answered? Get copies of all documents related to your properties. You should request copies of lease, tenant contact information, and copies of the keys to your properties. Also request information on the company’s bonding and insurance.
Recovering Funds That Are Owed to You
The State of Ohio has a recovery fund available to clients that have been damaged by a real estate brokerage. It requires you to get a judgment in court. If you are unable to collect the judgment from the brokerage then you can file a claim with the State of Ohio. There is a limit of $40,000 per claim.