7 Replies Latest reply: Apr 12, 2019 5:07 PM by rjstroebel RSS

    Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.

    rjstroebel Contributor

      This is a sticky question and looking for guidance.

       

      I recently was asked by a neighbor to manage his Ocean Front rental. He was with Vacasa 2 years and threw them out (Locked them and 7 future reservations OUT)

      He abruptly ended and violated the contract agreement ( He Did not honor the 60 day contract termination agreement) and Vacasa had 7 future bookings\deposits taken so they deducted their 25% commision from his monthly payment as they had to cancel and refund the future guests.

       

      His home hasn't been updated or even refreshed since the 80's and after assessing his property, I determined it would need 10-15k in udtating. I got him to sign a agreement that states

      - I am the property mgr, I collect the payments, handle all bookings, inquires, cancellations, refunds, pay the TOT. He agreed and signed.

       

      After I used my credit card and $17,000 in material, numerous trips to every store you can think of and sometimes 2-3 times, along with my labor have given this wall to ceiling tongue and groove wood house a new life with all new furniture, mattresses, bedroom furniture, flat screens, carpets, wall art.. You get the gist..

       

      I Built the listings, arranged for the photos, set the rates. Property goes active Tomorrow 4\12\2019

       

      NOW..... he is saying HE wants to collect the payments and he will then pay me...


      My fearful concern is he will screw me as he (Attempted to do to Vacasa) and he wont pay, or he could pass in his sleep as he is very elderly and frail and with monthly invoicing the only way to go, I will be screwed badly.

       

      Wondering if anyone has had an Owner behave like this, and how did you handle it.?

       

      How can I address this with him in terms that explain it is not only customary, but logical for the property manager to handle the payment process.?

       

      He does not have nor ever used a cell phone.

      He says he looks at email once a week.

      He has 2 knee replacements and states he will not be able to climb up down stairs in the next few months.

       

      Sorry to be long winded, its just that I do not feel comfortable (TRUST) this mans temperment, nor his mental ability to perform the accounting part of this.

       

      Thanks.

        • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
          wildiris Active Contributor

          First - I am an owner, not a property manager.  You should be concerned that he won't pay you.  From what you've written, this fellow has been able to breach his contracts (with Vacasa and seven different renters) with no adverse consequences for him.  At this point in time, you remind him of the terms of his contract with you.  You tell him that he agreed to have you handle the payments.  You tell him that you are not going to renegotiate the agreement with him.  Period.  Whether or not this is customary is a moot point - he agreed to it in the contract.  (By the way, he knows this is customary because he already had Vacasa act as a property manager and they handled the payments - correct?)


          From what you've written, I don't know if this fellow has dementia or is a shrewd operator.  He may be thinking that he can breach his contract with you and get away with it - again.  If he breaches his contract with you, you have two choices:  sue him for the breach or walk away and chalk this up to experience.  (If you know someone has treated a different business partner badly you should assume that he'll treat you the same way.)

           

          What does the contract say regarding payment for the time and materials that you provided to update the property?  Has he paid you for these?  If not, file a mechanic's lien on the property ASAP.

            • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
              rjstroebel Contributor

              Thank's,

               

              I'm also an owner\operator of (2) VR's myself. He paid the 1st material\labor bill with no questions, all that remains is about 3k in material and roughly 5k in labor which he hasnt yet seen the bill and I dont expect he will be a problem with his outstanding bill.

               

              Now, as far as your Q - "Did I sign a contract with him". YES, I wrote it. here it is

               

               

              my listing agreement  reads in part...

               

              AGREEMENT  

               

              1.  Engagement of Services.  OWNER hereby engages MANAGER to provide the following vacation rental services in connection with OWNER’s Property (collectively the “Services”):   

               

              (a) MANAGER will market the Property to prospective vacation renters via websites and such other online listing services or vacation rental marketing programs as determined by both OWNER and MANAGER. OWNER shall be financially responsible for annual advertising listing fees.    

               

              (b)  MANAGER will receive and handle all inquiries from prospective renters, and coordinate reservations and bookings for the Property in accordance with the date(s) for which OWNER has indicated availability, and at a rental rate commensurate with current market value;  

               

               

              Page | 2 

               

              Vacation Rental Agreement

               

              (c) MANAGER will prepare all vacation rental agreements to be executed by Owner and each GUEST; 

               

              (d) MANAGER will account for, collect, and remit all rents, fees, not to include Cleaning Fee, and security deposits set forth in each rental agreement, subject to the terms of this Agreement; 

               

              (e) MANAGER will facilitate check-in/check-out procedures for each GUEST;  

               

              (f) MANAGER will thoroughly clean and inventory the interior of the Property following the departure of each GUEST; 

               

              (g) MANAGER will assist with certain GUEST accommodations (e.g., supplying extra towels) and make itself available to handle reasonable requests of GUESTs; 

               

              (h) MANAGER will provide such other administrative services as agreed upon by the Parties.  

               

              I mistakenly only wrote in a 30 day termination clause. (Should have wrote 60...)

               

              I appreciate your comments, not sure if he has mild dementia ( Mt father had it and we were trained for the signals) but this man will be speaking and abruptly stop nd say " It's gone" meaning is recollection of what he was just talking about. I'm going to see him today present the outstanding bill and tell him "Ok, its up and ready, and active and we've already responded to 3 inquires and it was viewed 51 times in 2 days.

               

              I like your approach, I will tell him

              - You asked me to manage your VR

              - We agreed that I would fully manage the property just as Vacasa did

              - You agreed to a contract and signed it  ( That might **** him off and he launches and tells me to take a hike just as he did to Vacasa( who did with a smile)

               

              My concern is

               

              - As we all know, the reporting breakdown tools in HW are WEAK at best. Fees are not separated out and he will not have the mental dexterity to do the financial calculations.

               

              Thanks all or your input.

                • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
                  u0999 Premier Contributor

                  To manage bookings and have reports with breakdowns, suggest getting ownerrez end enabling property management module.

                  • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
                    feibus Senior Contributor

                    Present bill for labor + materials.  Once that's paid, consider the request for renegotiation (not saying do it, I'm saying collect the money owed before considering any changes to the agreement).  That way, you're not out real money to start.  And if he decides to breach, it's a much smaller commitment.

                    • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
                      wildiris Active Contributor

                      Agreed - I think there's room for improvement in the format of HomeAway's invoicing statements for owners.  Between the copies of the invoice emails to guests and the ones that HomeAway sends owners, you should have the financial breakdown that you need.  I'd make copies of all of these invoice emails for this fellow and give them to him for each booking.  You may want to do what I've done - create an Excel spreadsheet for the different items.  It helps at tax time and it will lay everything out at a glance for both you and him.  For what it's worth, these are the columns that I have in the spreadsheet I've created: Guest Name / Dates / Rent / Cleaning Fee / Sales Tax / Damage Deposit / Total Due / Reservation Deposit / Paid (Pending/Yes) / Credit Card Fee / 1st Amount Received from VRBO / Final Payment Amount / Due Date / Paid (Pending/Yes) / Credit Card Fee / 2nd Amount Received from VRBO.  You would also want to add a column for the amount of the manager's fee owed to you on each rental.  I have repeat guests, my own listing, and listings on several other websites that let guests book directly with me.  For these direct bookings guests pay by check and there's no credit card fee.  For the direct bookings I just enter "N/A" in the credit card fee and VRBO columns.

                       

                      Good luck with this fellow - I think you're going to need it!

                  • Re: Help..Owner insists now he wants to collect payments then pay us the Prop mgrs. Not as agreed.
                    green_mango Active Contributor

                    Wow - I'm so sorry, it sounds as if you have dug yourself into a very deep hole - you paid $17K improvements for a rental home that is not yours?  What is your contracted agreement to earn that back?  That is not a typical situation - I hope you have a very clear contract stating the responsibilities and consequences if you are not repaid the investment you have put in.

                     

                    Perhaps the idea of earning some money has clouded your judgment - you've tied up $17K in a person that you aren't comfortable with, don't trust, and aren't confident in his mental ability.....  sorry, I don't have much advice but this may turn out to be an expensive life lesson.