Lawsuit Against Management Co to Recover HOA Costs Associated with Bad Tenants

I want to know if there is anyone who has experience filing suit against a Leasing Agency who rented a house in our HOA to bad tenants. Our security and office staff spent many hours of time on these tenants who have now been evicted. I want to suit the Management Company for negligence to recover the cost of man hours spent by our security department and office staff. Any advice?

Thanks for the fast reply. I am a resident living near the rental property. It seems that the MC rented a property to a tenant who was not financially qualified to fulfill the entire 12 month rental contract. They did not move in with any furniture and were evicted 3 months later for non-payment of rent. In the interim, our security expended countless hours chasing the resident who was panhandling on the HOA property, annoying residents asking for rides, walking around the property intoxicated. All resulting in probably 30 or 40 "service calls" by our security in a 3 month period to address each incident. SAY a rental in our HOA averages about 2 security service calls a month. Why can't we sue the MC for negligence for all the man-hours responding to the security calls and time devoted to police actions. It is the man-hours over the average number that we are out, and the number of hours devoted to these particular tenants was significant. Isn't the MC responsible to QUALIFY a tenant in advance of signing a lease to make certain they can fulfill the terms of the lease. If a MC knowingly allows a portetial renter to sign a lease they know the renter can't pay for, that seems like negligence to me. Had that not occured, we never would have suffered our losses.

Good advice. Your contract is with the owner. Period. Does your documents give you the power to interfer with a tenant? Even then, everything you do must go thru the owner. You have no standing with the rental agency either. They would laugh at you. Again, it would be the owner who had the contract with the rental agency. If you were actively involved in evicting these tenants, I am surprised you were not sued. You might try collecting your costs from the owner, but unless your documents expressly give you this power, I doubt any court would rule in your favor. There have been many discussions here about controlling rentals. Do a search. Harold

Then go after the owner.

Is your security full time or do they respond when called? If full time, how can you justify charges? Do you charge others for security calls? For some of those incidents you described, why didn't you call the police? These are questions a judge would want answered. You should always use local authorities when possible - zoning, police, animal control, health dept, etc. Your quarrel is strictly with the owner. Harold

Good reply! But unless you already had existing rules in place to charge an owner for "...anything above the baseline average of time spent for other rental units..." I don't know how you could do that - especially in view of the fact your security is full time to begin with - so they earned their pay with these tenants from hell! Since it cost your HOA no more for these incidents, you are out of pocket nothing, and are not trying to recapture additional expenses, so actually what you are proposing is a fine. Does your fine structure cover this incident? You can't just make rules as you go. Harold

DaveM1: Is it possible your focus for the one to blame may be on the wrong person here. You say that you want to sue the Leasing Agency who rented a house to bad tenants who caused the security and office staff to spend hours and now they have been evicted.

The fault lies with the owner of the house who rented to an undesirable tenant. I don't know how a leasing agency got involved, but your only recourse to avoid this problem in the future is to ensure that the owner is monitoring his tenant--that the BOD is alerting the owner when/if the tenant is in violation against the CC&Rs, or is committing some other inappropriate action.

I agree with previous posters; you can't recoup cost for time spent by your security dept. and office staff who normally are on duty anyway. Unless the Management Company has it in their contract to monitor and ensure appropriate behavior from ALL community residents and tenants, it is not their responsibility. Their responsibility is to advise/counsel the Board as an Agent on behalf of the community association.

I find it interesting that you don't mention any action (or lack of?) on the Board's part in this situation. What was the process used to get the tenants evicted?

I run into bad management companies all the time. They lease homes and then take no responsibility for the tenants actions. There are requirements you can make for leasing. Approval by Board of Directors is common in CCR's. Now may be a good time to look for some amendments dealing with renters. The HOA is still the Owner's Association though. I regularly impose fines against owners for bad management. They contract with their management and it is up to them to correct the tenant situation. Our restrictions allow (after sufficient notice of a problem and the opportunity for a hearing)fines of $10 per day or $50 per occurrence. The tenant is not responsible nor is the management company. it brings it all home that the owner is responsible for making sure the subdivisions restrictions are followed.

Due to changes in Ohio law Condominium Associations now have the right to evict problem tenants if the homeowner fails to act. And If the BOD fails to act to enforce any of the CC&R's, a homeowner may do so on their own and recover legal fees (see last paragraph)

D.To initiate eviction proceedings, pursuant to Chapters 5321 and 1923 of the Revised Code, to evict a tenant. The action shall be brought by the Association, as the Unit Owner’s Agent, in the name of the Unit Owner. In addition to any procedures required by Chapters 5321 and 1923 of the Revised Code, the Association shall give the Unit Owner at least ten days written notice of the intended eviction action. The costs of any eviction action, including
reasonable attorney’s fees, shall be charged to the Unit Owner and shall be the subject of a special assessment against the offending Unit and made a lien against that Unit.

P.Compliance with Covenants, Conditions and Restrictions. Every Unit Owner shall comply strictly with the covenants, conditions and restrictions set forth in this Declaration, with the By-Laws of the Association and with the Rules and Regulations in relation to the use and operation of the Condominium, the Units, the Common Elements and the other Condominium Property. Failure to comply with any of the same shall be grounds for an action to recover sums due, for damages, or injunctive relief of all of them, as provided by Section 5311.23 of the Ohio Revised Code. In any case of flagrant or repeated violation by a Unit Owner, he may be required by the Association to give sufficient surety or sureties for his future compliance with said covenants, conditions, restrictions, By-Laws, Rules and Regulations.

Violations of the covenants, conditions, or restrictions shall be grounds for the Association or any Unit Owner to commence a civil action for damages, injunctive relief, or both, and an award of court costs and reasonable attorney's fees in both types of action. Any and all expenses incurred by the Association in enforcing any of the terms and provisions of the condominium instruments, including reasonable attorneys’ fees to the extent permitted by Ohio law, may be levied as a special assessment against the Unit Owner in question and his or her Unit.