Property Management Maven

I've been expecting to this phone call...didn't think it would be this soon; however, I knew it would come. 

In late summer, a local Realtor of approx 4 years called me regarding a listing that had gone vacant as the owners had moved to their new home out of state.  The Realtor wanted me to talk to their owner about managing the property for lease until the local real estate market recovers.  I talked to the property owner and provided my management agreement and management proposal.  I also advised them with a list of some repairs and cleaning that should be done as quickly as possible to make the home attractive to potential tenants.  I also provided them with the amount rent they should expect.  Obviously, it would not cover their "costs" and they were not happy.

When I did not hear back from the owner or Realtor, I forgot the property until I saw it listed a few weeks later on Craigslist for lease through the listing Realtor at a rental rate that was over the rental market. 

This past week I got a call from the property owner.  In a long telephone telephone conversation, the owner asked my advice. 

Evidently their listing Realtor with no leasing or rental management experience had been approached by another Realtor in their office about allowing the second Realtor's clients to rent the home of the property owner.  Seemed like a good idea so the listing Realtor prepared a standard Virginia Association of Realtor lease and the new tenants signed it and moved in.  They paid their first month's rent and promised the payment of their deposit once they had rented out their home that the second Realtor had listed on Craigslist.  So far, so good.

Then, the second Realtor could not lease the tenants' home as it was actually in foreclosure.  The new tenants knew this and had not shared the information with their Realtor.  Likewise, the property owners' Realtor had relied on their office/agent/buddy's representation as to the creditworthiness of the new tenants.  No credit check had been obtained and no credit history was known at the time the lease was negotiated.  The lack of monies for the deposit had not raised a "red flag" and the fact that they were willing to pay a rental amount way over market did not cause eyebrows to be raised.
 
According to the property owner, they have now been served by US Bankruptcy court paperwork indicating that their new tenants have declared bankruptcy and their Realtor/Agent does not know what happened or what needs to happen now. 

Unfortunately, I had to refer the owner to an attorney who can advise them now to make a claim for rent in the bankruptcy and how to evict the residents if they do not follow through with their payment of their deposit or monthly rental payments.

This scenario has prompted my November, 2007 newsletter article.....Leasing Rental Property is a PROCESS and not an EVENT.