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Josh M. Boggs…, Real Estate Pro in San Antonio, TX

What do you do when an apartment complex refuses to pay your locator invoice?

Asked by Josh M. Boggs ABR, SFR., San Antonio, TX Thu Dec 11, 2008

After sending a client whom had sold her home to an apartment complex that she liked, my client went through all the necessary protocols to get my name and information registered for the apartments to pay a locator fee. In this case it turns out to be a large fee and it's over 5 months late!

However, after visiting with property manager several times and even contacting corporate; they all are putting me off and refuse to respond to my attempts to collect. Heck, I've even offered them a FREE office lunch by me if they could help me out. I even have caught the apartment manager in straight out lies about my status of the invoice and where the check was. Besides getting extremely hostile and aggressive (both of which I've refrained from doing up until this point), what other suggestions may you have that has worked for you in the past relating to this kind of situation?

Thanks,

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Hello Mr. Boggs,

I do not necessarily recommend the actions below, but something needs to be done to stop apartments from taking advantage of real estate agent and brokerages. This is only one possibility of a potential course of action a brokerage could conduct.

I've encountered this activity on several occasions myself. It was a major reason for me getting out of apartment locating. It's hard enough to make a living conducing locating, but to get repeatedly burned by apartments is a death knell. I've also witnessed fellow agents who are still awaiting payment over a year past due.

Obviously try referring to the lease if your name is indicated upon the document (referred by section). Any additional documentation would be helpful, e.g. agreed commission amounts, statement from customer/client depending on the tenants relationship to you.

Failing that here are some suggestions I offered to my broker, they have not been employed as they were viewed as aggressive. Brokers have to contend with image and I understand that, but if their agents have over $5,000 in unpaid commissions and $2,000 from a single apartment company it's time to take action. Agents should not do this course of action without first consulting and consent of their broker. Policy actions I recommended to brokers in my firm for difficult accounts:

Clarify a payment due date to the brokerage, say 30 days after the tenant's move-in date. Get the highest manager's name, email, number, and ask for a business card. Send a confirmation fax asking to confirm the tenants move-in date, unit number, lease amount, and state the commission amount to be paid. Even if they do not respond you have a document with a fax that confirms it was sent/received.

Next Step: Send all correspondence certified registered mail. Address all letters to the apartment complex attention management or the manager's name. First action, send first invoice to company the day the tenant signs the lease. Include a copy of the fax confirmation.

After 30 days send second invoice (note as Second Notice) to company with copy of lease (with your name in the referred section) or other documents indicating your claim to commission. Include a dated letter referring to the documents and that it was indicated that you would be paid a commission for your services. Include the certified registered mail number at the top of the letter.

After 60 days (from date tenant signed lease) send a third notice referring to your previous correspondence citing both the date of the letter and the certified registered number. Also indicate the account as past due 30 days. Include at top the certified registered number.

After 90 days send a fourth notice indicating 60 days past due. Indicate that the account may be referred to a lawyer or collection agency, but that you would prefer to avoid such action and that immediate and full payment will mitigate any issues. Refer to previous letters/notices and include the certified registered mail number.

After 120 days send a fifth notice indicating 90 days past due and if the amount is not immediately paid it will be referred to a lawyer or collection agency for collections and that the apartment company may be liable for collection costs/lawyer fees.

At the 150 day mark contact a lawyer or collection agency and place the account in collections. If you go this route I'd recommend going with an attorney specializing in debt collection.

The above noted actions should not be conducted without first consulting an attorney as it is very easy to violate federal law with regards to attempting to collect a debt. Also the attorney may recommend another course of action. Some brokers/agent think the commission is not worth hiring a lawyer, but this is exactly what some apartment complexes are counting on. If enough brokers acted against apartment complexes burning them and their agents these companies would get the hint to stop doing such actions, hopefully.

I know that brokers are concerned with how this will affect their relationship with the apartment complex in question, but the issue is that such a company is not paying you anyway so why care? I'd like to hear from others on this concept. Do you think it too aggressive to demand payment for services rendered? Other professional organizations and people engage in collections why not real estate professionals? If we keep letting such companies run us over they will continue to do so with impunity. Oh and when I become a broker you can bet that my policy will be aggressive for any company attempting to cheat my agents or company out of hard earned commissions. Just my two cents.
1 vote Thank Flag Link Fri Dec 12, 2008
Only once have I been unable to collect - but since your inquiry has brought that back to front of mind, I'll put my new assistant on it tomorrow. Usually apartments are great, especially when the resident is advocating on your behalf. It requires persistence, documentation of your resolution attempts thus far and escalation to the next level. I've only had to go to the second level of a corporate structure in my worst case but I'd assume there is someone at the top that will eventually say pay him or not and be prepared to stand behind their decision regardless of what you "threaten" - legal or just sharing your experience with others using names. Never a need for hostility. You can always earn additional revenue by helping their occupants find a more suitable home for today's needs elsewhere.
1 vote Thank Flag Link Thu Dec 11, 2008
I had to turn over a late pay to my broker who followed up client placed in 9/08 still not paid stated "tough times".... If not paid you have have broker attorney send a demand letter, possible lien on property of contractor not paid. Usually grabs their attention.

Forward all via certified mail and etc. therefore you have record. Your statements sound like OH NEVER RECEIVED invoice, most complexes dont pay till approx. 90 days later at least here in Dallas. If they are 100% I dont mind wait if only 50% commission I can be paid via a single owner property thru broker to broker in less than 10 days.

Lynn911
~ National Featured Realtor and Consultant, Lecturer regarding Credit Repair, Mortgage Loan Officer
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Apr 9, 2009
Just an update.

That apartment complex finally did pay the invoice.. 8 months later!! But hey..at least they paid it.. I've now bought a starbucks giftcard and will go personally give it to the manager as my peace offering.

Thanks for all the advice.

Josh
Web Reference: http://www.eXposedHomes.com
0 votes Thank Flag Link Wed Apr 8, 2009
Josh,

Apartments are notorious.

There are some excellent management companies that pay their bills.

There was one in town that appeared to be doing an episode out of the Sopranos (take the rents and pay no bills).

The only way I know to make this work is to continue to fax the bill to them.

There is no successful aggresive approach, just persistance.

Oh yeah, Sam is right, the Board has no power over the apartments. Actually, the Texas Apartment Association, TAA, is a very strong lobby in its own right and is not really LOCATOR or REALTOR friendly in my opinion.

On the other hand, some management companies aggressively court our services. It pays to know which ones.

Don Reser
0 votes Thank Flag Link Mon Mar 2, 2009
Hello Randall,

You will encounter a major issue with reporting an apartment complex. Not all of the apartment complexes are associated with a Board of Realtors and not all real estate agents are Realtors. In fact very few of the apartments in the town where I use to work had Realtors working as property managers, or licensed agents for that matter. Even if the apartment complex did have a property manager that was a Realtor it would not have done me any good since I was a licensed real estate agent but not a Realtor. As for trusting the apartment complex staff, well I learned quickly to document everything, but even that is useless if the broker will not pursue the issue. Way to much headache for so little reward. The only leasing I handle now is commercial leasing with signed contracts and agreements.
0 votes Thank Flag Link Fri Dec 12, 2008
My first thought would be to report them to the board of realtors and file a complaint. I would assume they have a property manager that is listed with the board and see what that does. Hard part is, most of us do not get anything signed in regards to rental commissions, we just trust the other agent on the complex. best of luck

Randall Sandin
843-209-9667
rsandin@carolinaone,com
0 votes Thank Flag Link Fri Dec 12, 2008
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