Foreclosure Leaves Property Managers Without Pay for Weeks

March 26th, 2009 by Matt DiChiara| Posted in Multifamily Foreclosures | 1 Comment »

Last week, we wrote an article about the unfortunate circumstances that followed when a rental property was foreclosed on and a court appointed a receivership to run the property.

Our article focused on the unenviable position in which the renters were left because we wanted to highlight the variance on renter’s rights after foreclosures between states. To that end, will be summarizing a recent report by the National Law Center on Homelessness and Poverty in order to provide an easy reference for renters who have questions.

Now, what we did NOT mention in this article, which was brought to our attention via Twitter was that not only were renters adversely affected by the foreclosure and subsequent receivership, but the property management staff were also put in a similarly difficult position; not only did they not have money for the proper upkeep of the apartment, but there was no money for their salaries.

Much like renters, property managers are given little notice of a pending foreclosure. At least in some states, renters are protected to some degree, whereas property management staff, even those using sophisticated property management software, can often only rely on internal rumblings unless they have data to help them predict. As it turns out, the plight of the property management staff was even graver than the renters. Staff went unpaid for weeks and kept working.

Since a receivership had been appointed, things have improved; staff members have received emergency checks and sign on bonuses and have been promised positions with the new management companies, though they may not be given back pay.

Tomorrow, we are going to investigate further into why this transition to receivership was so difficult on both staff and renters.