About Michelle Mangen Expertise Wisconsin Landlord/Tenant Questions.
Experience Having been in the property management industry for over 13 years in Wisconsin and working quite closely with attorneys I have learned a great deal of information regarding landlord/tenant relationships. Additionally my previous experience included assuring that the company I worked for was compliant with regards to the law.
Education/Credentials Attended several seminars regarding landlord/tenant laws. Over 13 years in the industry.
Past/Present Clients New Land Enterprises, LLP - Milwaukee, WI. EA Properties - Green Bay, WI. Fox Valley Housing - Appleton, WI. Kevin Zimmerman, Wendy Scheels, Dave Anderson and other independent owners throughout the state of Wisconsin.
Question QUESTION: Hello Michelle,
-Background: Hired a property management company (PMC)for my rental home 3 years ago.
-Rented annually from August 1st thru July 30th. If annual lease not renewed would become a month-to-month lease.
-Informed by phone by PMC in mid-June 2008 the tenants want to renew at same rate ($1,500/mo).
-Received a copy of the lease renewal late June, 2008. I didn't open the letter. Assumed the contract was in order. After all, I hired them to manage the property. In fact I didn't open the letter until February 2009 when preparing my tax return.
-July 30th received a phone call from PMC stating the tenant would not renew the annual lease, and would give 30 days notice to vacate unless I reduced the rate to $1,300/mo. I was also informed the tenant was separating from her husband and needed the reduced rate (they did not separate). (At that time I was out of state and did not have any records/documents to review. Not that I would have anyway as I had hired the PMC to protect my interests.) I agreed to the annual renewal at $1,300/mo as I did not want property to sit vacant (no income), but I was unhappy as the PMC could have been marketing the property thru out the month of July.
-Fast forward- Now it is late August and the PMC has developed a website for landlord's to review contracts, etc. On the website is a copy of the signed lease renewal from June at $1,500/mo. (That document has since been removed from the website.)
- Over the following months I did not inform the PMC of what I had learned because: the PMC informed me the remaining tenant wanted out of her lease; the PMC also manages another rental home for me and that tenant has repeatedly been late with payments but wants to renew his annual lease which expires October 31st. (My thoughts were one issue (property) at a time, and there have been issues.
-March 2009 - PMC calls me to say the tenant wants to renew the lease ($1,300/mo and due to expire July 31st). I have not responded beyond informing the PMC I am aware of the June lease renewal at $1,500/mo (I also saved that website-obtained document on Microsoft Word and emailed it to the PMC. I have not yet informed them of the documents sent to me in June 2008).
-The PMC denies any knowledge of the June lease renewal (I do have the mailed copy and accompanying cover letter). Instead she states "I checked with Emma, the girl that puts the information on the computer - the lease renewal for $1500 was not to have been put on the website - the tenant had called before we even got the renewal in the mail and said that she was not going to be able to renew at that price and that was when she asked if I could ask the owner for a reduction in rent. When the lease renewal came in the mail, Emma put it on the website. Emma did not know that the tenant had already called and she had already put the renewal on the site - when we got the renewal redone, after you accepted the $1300 rental fee, we did send you in the mail the corrected copy of the lease for $1300. I believe we had discussed that at the time, and you did agree to the $1300 - She did not demand the rent be reduced, she had me ask you if you would reduce it - otherwise she was going to move out."
-The website was not opened to the homeowner's until August 1st 2008.
To summarize:
1. The PMC says they did not receive the $1,500/mo lease renewal until after July 30th 2008.
2. I can now prove the lease was actually renewed in June 2008. (I have not yet informed them of having received that document.)
So, my questions are:
1. Legally do I have a claim to enforce the original renewal even though 9 months have passed?
2. Did my acceptance of and cashing the $1,300/mo checks invalidate the original lease renewal at $1,500/mo?
ANSWER: Are you in WI and is PMC Prospect Management Co in Milwaukee? (Glendale)
---------- FOLLOW-UP ----------
QUESTION: Hello Michelle,
The property is located in Florida. I live in Michigan. I know you practice in Wisconsin but your website was highly rated so I contacted you. Regarding the situation, I was hoping the location of the property would not be relevant. Please advise. Thank you.
ANSWER: Hi Bernie:
Thank you for the clarification - it didn't cross my mind you were using PMC as an acronym for Property Management Company. I wanted to clarify as I used to work for PMC in WI and didn't want to give advice against an ex-employer!
Honestly I think this particular issue is outside of landlord/tenant law as it probably has more to do with performance of the company.
If I were you, I would send them a letter, with your proof (which it sounds as though they already know you have it) and demand that they reimburse you for the difference. Additionally, maybe before doing that review the agreement you have with them.
If that doesn't work and you want to pursue further, I would suggest getting a litigation attorney otherwise maybe find another company and "cut your losses" as they say!
Feel free to let me know if you have any other questions.
First, I would like to thank you for your attention. It's appreciated more than you know.
Next, while I do recognize that I may require the services of a litigation attorney, or at least their consult, I guess I wonder whether or not I have firm legal recourse that would warrant investing in this measure.
By the way, the current contract with the PMC will automatically renew for one year on May 10th, and I suspect that if I do not renew with them then they will move towards placing the existing tenant in another of their properties when the current lease expires. This of course would lead to a loss of rental income for one month (the property is a 3/2/2 pool home of which there are few on the market in this area and rentable for the right price of course) in addition to the cost of prepping (i.e. painting, etc.) the home. It is for these reasons that I ask if I have firm legal standing that warrants the investment.
I also know I am asking a lot of you and your expertise, and for that I am grateful.
Thank you,
Bernie
Answer Bernie:
In my opinion (and again based on WI) I think you do have good grounds, pending what your contract with them reads. I think at best, they are not acting in your best interest and that is what a PMC should be doing.
If you find new company now you may very well be able to get the place rented without a loss of income.
Do you really want the resident to remain there at $1300/month? If not, then it may not be a "loss" if the current residents move out. Do you have any contact with the resident? If you feel comfortable you may want to contact her to find out her side of events to determine if there is further details you may not be aware of that may "sway" you one way or another.
Where in MI is the home?
I know you have a lot on your mind with this right now but depending on where you live maybe you should consider renting your home as a vacation rental. I live in a little "no name" town in WI and I get as much from Memorial to Labor Day renting weekly as what I would get renting it year round to regular "tenants". When I first started I figured that NO one would come to Neenah - what the heck is Neenah. This is my third year doing it now and every summer I am 100% booked. It's a booming industry as more and more people are not using hotels.
Of course, you would still need someone locally to handle the turnovers for you but aside from initial investment to furnish the home (and I got a ton of my things from rummage sales) and about $600 a year in advertising....hands down I would recommend it! (and you say you have a pool, that's even better!)
Feel free to ask away and if you want to talk further RE vacation rental visit my website and fill out the contact form and we can converse via email on there!
If I lived in MI I would gladly take this on for you as I've been in this industry for over 12 years!
