What is my recourse if I own a rental home and hired a property management company to maintain it but it failed to do so?

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What is my recourse if I own a rental home and hired a property management company to maintain it but it failed to do so?

After many of my old neighbors calling to tell me of the terrible neglect going on at the property, I have since found that there is $20,000 worth of damage and the tenant has completely trashed the home. This is the worst management company I have ever seen. We had to force her to move out and the house is now being completely gutted. All of the appliances need to be replaced, and from what they are telling me, this is all my responsibility to cover all the damages. I don’t understand what the point of the management company is if they have done nothing to maintain the property? I can’t afford this huge bill.

Asked on October 28, 2015 under Real Estate Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The issue is whether the management company was truly at fault or not. It is very difficultt to prevent a tenant from doing damage, especially since the management company, like you, as landlord, yourself, has only limited rights to inspect the home while the tenant is occupying it. A tenant can easily cause extensive damage between inspections or without detection.
That's not to say that the management company is not liable, but you can't automatically assume they were: it depends on the facts, such as--
* where the damage, inside or out; inside damage is much harder for the mgt. company to become aware of
* what were the signs of damage or neglect
* over what period of time was the damage done; the shorter the time, the less likely it is that the mgt company could have detected and prevented it
* what exactly did your contract with the mgt company say about their resonsibility to inspect, etc. the home--did they violate their contractual obligations by not doing as much as they agreed to, or did they do what they were supposed to?
Your first recourse should be to your insurer: hopefully, you have adequate insurance, since no one should be a landlord without having adequate insurance. You can also clearly sue the tenant him/herself. And you should speak with a landlord-tenant attorney or litigatator in some detail about the situation, to see if you may have a valid cause of action against the managment company.


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