Question: I have recently inherited a property from my deceased father and have uncovered that several of my tenants haven’t been paying rent over the last few months. Also, the property manager who was supposed to be taking care of everything never bothered to do anything about it. We also discovered the property manager’s assistant was stealing money from our account. We also believe they have been fraudulently billing us for contractor’s work that hasn’t been performed. What should I do?

Property manager Griswold replies:

It is important that you have a company that you trust acting as your property management agent, and it appears that you have no basis to continue with your current company. My suggestion is that you need to proceed cautiously, and carefully review your management contract and understand the terms and conditions and the proper procedure to terminate the contract.

You also need to make sure you have all financial reports and copies of rent rolls, invoices and other important documents, as once you actually terminate the contract you are not likely to get any additional cooperation. Once you have all of the documents you will have a better understanding of the extent of the mismanagement and can possibly determine whether it is incompetence or negligence or dishonesty.

Then you need to evaluate the pros and cons of filing complaints with any governmental oversight agency, or you may even find it would be worth considering legal action seeking to recover for the damages.

Again, caution is advised and you don’t want to compound the problem by making an emotional decision that wouldn’t be prudent. Remember that unless there was negligence by the property manager, they are not responsible for the fact that some tenants did not pay rent. If they rented to clearly unqualified renters and failed to perform any tenant screening or they allowed weeks to go by without any attempt to collect rent, then you may have an argument; however, some property owners think that the management company is at fault simply because some tenants suddenly stop paying rent, and that is not reasonable.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and co-author of “Real Estate Investing for Dummies,” and San Diego attorneys Steven R. Kellman, director of the Tenant’s Legal Center, and James McKinley, principal in a law firm representing landlords.

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com.

Questions should be brief and cannot be answered individually.

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