Topic: New Owner/Management Takeover Spending for Manager

I know a lot of you have been through this and I need advice NOW! I'm having deja vu from a previous experience that I don't want to repeat.

I expect a new owner/management company to takeover by next Wednesday. I sent them information about transferring utilities and telephone 2 weeks ago, which the current owner will cut off the day of the sale closing. It hasn't been taken care of, as of Friday. I have a tenant upstairs in my "office," so the power cannot be turned off!!!

I will not have a computer or printer to start. I'm already getting invoices for next round of pest control, etc. Also, turn expenses for painter, cleaner, etc. will be due soon.

When this happened before, I spent $600 of my personal money to keep things going and it took 3 months to get it reimbursed.

How do I approach them about "start-up" funds and how do I say "NO!" when they ask me if I will cover it?

I already spent $185 on a new all-in one to scan them the information they requested to set me up in their software.

HELP!!!!!!

Sandy

Oh gosh, I feel your pain and have been in this situation. How I handled it was push it all back to the person who's responsible for it. I've never had anyone get upset or mad because I wasn't willing to pay for business expenses out of my pocket.

This was what happened with us: Even after receiving shut off notices, the correct billing still wasn't addressed and the bill(s) went unpaid. The electricity was cut off to an employee's apartment, I was at the brink of calling the utility company myself and decided I wasn't going to take this on. No one in the apartment was on a lung machine, it wasn't dead of winter, etc. When I learned of what happened, it wasn't during business hours either so getting hold of someone wasn't too easy. But I did get hold of someone who called the utility immediately and made the payment. The second time the power to the property (laundry rooms, lights) was cut off. There was no way I was going to cover a several hundred dollar electric bill.

Although I hope it doesn't go that far, keep in mind that it takes minutes, not hours or days for services to be restored. It's not always necessary to be brutally honest, you can tell the tenant(s) there was a glitch and services will be restored shortly.

I know this will eat you up, but you just can't carry the whole load yourself. You've made them aware of the situation and it's now up to them.

As far as your vendors, all of them have experienced a payment delay or two without cutting off services. However, if they require immediate payment this is another bargaining tool for you - can't complete turns for move in if the vendors aren't paid.

If the owners ask you to cover expenses yourself, it's OK to tell them no. On many occasions when expenses have come up and that questioning silence followed, I made sure to say I'll need a check for expenses, they'll need to put the purchase on the credit card for me to get the material, etc. Tell them that you've not in a position to take money out of your pocket or put expenses on your credit card. If you start paying for things yourself, you're already telling them that it's OK to take advantage. Do know though that there are times when I do make purchases when I'm out of petty cash but it's for small things that won't affect me.

When the owner or whoever starts getting the calls about power shut offs or you tell them you can't send them what they need or process rents or get turns done for move ins, I guarantee you things will start happening.

Hopefully it's a situation of they've just haven't got to it yet but it's on the list. Good luck.

I guess this is just me, but I would make sure that all electric accounts that are in the former owner's name I have the account numbers for. Then I would inform the new owner that shut offs will occur which will impact the business and daily productivity, SO, I would then set up the accounts in the new owners' name (just need their tax ID and billing address) myself. I've done this a few times so that the transition goes fairly seamlessly. You may have to do this for each account individually.

I also write a letter to all my vendors informing them of the impending sale of the property and where to send their final invoices (to the old owner) and if I want to keep them, I tell them I need their certificates of liability insurance, "bid", and their I-9 for the new owner so we can keep doing business together.

All the petty cash should be reconciled to the old owner and I let the new owner know I expect my petty cash check the day of the takeover. If it's too late, then you have every right to submit a Petty Cash Check Request.

Prior to the takeover, I would request my Chart of Account codes, too, and a date for the new budget to be uploaded to the system. Basically, I to reassure the new owner I am looking out for their best interests in keeping daily operations smooth. I want the old owner to know I don't want him facing any potential lawsuits with vendors nor do I want him to incur a property tax fight if the new owner fails to properly report the sale, etc. Mostly, I just don't want that stress of dealing with problems that are completely preventable!

LOL makes me think that I have to clarify a little further. The particular experience I was referencing was when WE were the takeover company, were provided all the info, but "someone" couldn't find out what they did with it. I think it was because they didn't know what to do when they received the info. Sad, but true.

Sandy, I seen this late. How did this all turn out?

Well, Nate, the property hasn't changed hands.

The electricity has been in the name of the future owner for 2 weeks.

I don't have a maintenance man, haven't for over a week and probably won't for awhile.

Only one person has threatened to early terminate due to poor maintenance response, so far.

I'm picking up trash and unclogged a disposal last week. We've only had A/C calls, which I'm using an outside contractor for.

By the way, do you think 5 days without a/c with temps under 75 degrees is too long? The tenant does.

Not going to touch that one Sandy. I am talking about the a/c one. So, is their a/c fixed now and are they in good humor? Just me being a busy body :)

Their A/C is fixed. I learned a lesson from it, too. The only problem was that the cover had been knocked loose and it wasn't making good contact. It was cause by a lamp that sits there, that I told them previously to move. I should have checked it before calling a contractor. I normally do, but the description of the problem sounded electrical (and it was!)

They got ants the next day. So, I bought a can of ant spray and treated outside around their apartment foundation, windows and doors. I did not see one single ant, anywhere!!! Must be coming in through plumbing pipes.

They have had one issue after another. They may not break their lease, but they will not renew, I'm sure of it. I don't blame them, either.

AND doesn't look like the buyer is going to close on the property, either.

Is there a preventative maintenance plan in place?

I have a preventive maintenance plan, just no one stays long enough to carry it out.

Property is scheduled to change hands the 15th.

The current owners have had to replace 3 HVAC units in the past 2 weeks, plus 2 others with repairs needed.

It is going to be challenging to see how long it takes to get service for my tenants with me sharing a maintenance person with a property 25 miles away.