Owners Frequently Asked Questions
Marketing Your Property
Usually we can start the process immediately. Once a contract has been signed and some basic information is given to us, we can get started. The speed is usually determined by how fast a client can get us the necessary information.
Just like the sales market, proper pricing is key in getting your property rented quickly. We’ll compare your property to similar ones in the area to determine the best rental rate to get your investment rented as fast as possible.
Prior to placing the property on the rental market, we’ll do a market analysis to determine the most economical and profitable rental rate. After a property has been exposed to the market for 2 weeks, we’ll reassess to see if the asking price is too high. We’ll then consider lowering the rent so the property doesn’t sit vacant.
In the local markets the MLS and online advertising are the most effective marketing tools. When a home goes on our website and the MLS it’s syndicated to 1000’s of other websites. Photos are professionally edited to show your property in the best possible light. We display the best photos first in the listing. All of our rental listings have a basic video walkthrough tour.
Wellspring uses a self showing system. Prospective applicants apply on our website to view your unit. They answer some basic questions and upload their ID to verify identity. If they qualify, they are invited to book a viewing of the property. They can schedule a viewing anytime from 8am - 8pm 365 days a year. Once at the property, they enter a code to access the keys. The codes are 1 time use only. If they are hesitant about entering their ID, we can book an in person showing.
Finding Quality Renters
As soon as a prospective renter views the property, we immediately send them an invitation to apply to rent the property. All applications must be submitted through our online website and the appropriate application fee must be paid. The application fee is retained by the company to cover the costs of processing the application. You’ll receive email updates when we receive the application and once a decision has been made. If the application is denied, you’ll be notified of the reason as well. We don’t take a home off the rental market until we’ve received a signed lease and all move in funds.
Wellspring Property Management abides by all Equal Housing Opportunity Laws. We do not discriminate against anyone on the basis of Race, Color, Religion, Sex, Handicap, Familial Status or any other protected class.
This is the most important aspect of the management of a rental property. As the saying goes, past behavior is often the best predictor of future behavior. In order to be approved for one of our rental properties, the applicant must demonstrate a history of being a good, responsible tenant and meet our financial criteria. All occupants over the age of 18 must apply.
We pull a credit report, verify income, rental history, employment, pets and any other data we need to make a good decision on who to rent to. If we receive more than 1 application, we run through them in the order received. We’ll only make a decision on full and complete applications. This means, if applicant A is missing something and applicant B has a full application and qualifies, we’d proceed running their application first.
- Credit Requirements
Applicants must meet our minimum score of 600 to qualify for a property. For applicants with a credit score of 600 - 615 we increase the amount of the security deposit based on their score. Applicants above a 615 generally have a 1x the rent security deposit unless they have pets.
- Employment and Income Verification
We verify job status, salary and likelihood of continued employment. All applicants must earn a minimum of 3x the monthly rent to qualify for a rental.
- Eviction and Criminal Reports
We pull a background check of public records to tell us if the applicant has been evicted.
- Other Verifications
As we process the application, we may need to gather additional information such as a landlord verification, pet verification etc. We make sure to gather all that information before we make a decision.
Security Deposits are based on a 3 Teird System:
- 615 + = 1x the monthly rent
- 600-614 = 1.25 the monthly rent
- Below 600 = Denial
- Pets = $250 per pet plus pet rent (we split the fee with you 50/50)
Wellspring Property Management also has a $1000 guarantee regarding pets. If we place a tenant in your property and that pet causes any damages in the first year, we’ll pay up to $1000 over the security deposit to cover the costs of those damages.
Wellspring Property Management will hold the security deposit to make sure we are in compliance with all trust laws. At the end of the lease agreement, any repairs would be itemized and refunded back to them. If repairs are deducted from the deposit, the owner would receive the funds to cover the cost of the repairs and the remaining balance would go to the tenant.
All leases are in writing and usually a minimum of 1 year unless otherwise agreed to. Longer or shorter lease terms are only approved after a discussion with the owner.
Rent is due on the 1st of each month and considered late if not received by 5:pm on the 3rd. New tenants pay a full 30 days rent upon move in and the second month is prorated. If they move in date is after the 20th, they pay the full 30 days plus the prorated second month's rent before move in.
Wellspring prefers to do all payments online by direct deposit. Upon set up either you, or Wellspring, will enter your banking information into your online portal. This portal will also be where you will view your monthly statements.
Even though rent is due by the 1st, it can take a few days for the funds to post to our accounts. To be in compliance with trust funds law, we have to wait until the funds post to our account before we send any funds to an owner.
For rents paid by the 3rd, owner draws on the 6th or the next business day if the 6th falls on a weekend or holiday. Your emailed statement will immediately be posted once we process owner draws. If a resident pays late, we would process the owner draw the following Thursday after it posts to our account.
If payment has not been made by the 5th, we send a reminder email on the 6th. If we don’t see a payment or a request for a payment arrangement by the 10th, we post and mail a 3 Day Pay or Quit Notice. Whether or not we eventually have to proceed with a formal eviction depends on the specific circumstances. It is usually financially better, for all involved, if a solution can be worked out. If the tenant has experienced a one-time event which caused them financial hardship, and we have had no previous problems with them, we will normally give them a chance to catch up, if there is reason to believe they can do so. If the tenant has demonstrated an ongoing pattern of late payments, broken promises and/or evasiveness, eviction is usually the best course of action.
Each case is unique, and we make our decisions based on what is best for you and the property in the long run. We always proceed with the legal notices required for eviction regardless of any other factors. We will simply postpone the actual filing of the eviction if the tenant is showing favorable effort toward resolution. Evictions in California can be lengthy, so we recommend proceeding quickly especially if the resident isn’t responsive.
Yes, for military residents. If they are assigned to a new location, we’ll prorate the next leasing fee and credit your next lease.
Rental properties are similar to sales in the aspect that the more desirable locations, accurately priced, and move-in ready properties rent faster. We make sure your property is presented in the best condition possible to get a good, qualified tenant as quickly as possible.
Wellspring has a $500 limit when it comes to maintenance on your property before we contact you for permission. Unless it’s an emergency, we’ll do our best to contact you if any maintenance needs to be done that’s over $200. We generally do all reasonable maintenance a resident submits because we know maintenance is the #1 reason tenants leave and the #1 reason they stay.
We have strict control over keys. All keys are held in a locked safe that only key staff has the code to. All keys that are issued to vendors, tenants or agents are logged in and out. Wellspring will need 3 sets of keys when we take over the management. One for our safe and 2 for the tenants. We also require all exterior locks to be keyed to 1 key.
Wellspring is part of the California Association of Realtors and uses the standard CA Property Management Agreement .
We manage all types of properties. Single family homes, duplexes, tri-plexes, 4-plexes, small and large apartment complexes and HOA’s.
Wellspring doesn’t manage commercial properties or properties that have chronic repair issues that violate health and safety standards. HOA’s and short term (AirBnb) type rentals.
This fee covers the expenses associated with finding a new tenant for your property. Extra time is used in screening applicants, answering questions from prospective tenants and other day to day items associated with marketing the property.
Our fees are very competitive in our industry for the quality of services we provide. Most other companies charge a 50% leasing fee then 10% per month after that. Generally, they have high staff turnover rates, slow communication times, poor processes and chaos inside the office.
We offer 3 different options for management - GOLD, PLATINUM AND DIAMOND + placement only services. We understand the modern world of doing business and have designed our company to cater to those needs. Emails, showing, applications, move in/move out, inspections, owner draws and more can all be done electronically. It makes you wonder how an old-school property management company justify charging you the same rate for archaic processes that are inefficient and don’t serve you or the tenant in the best possible way.
All of our fees are outlined in our Pricing tables, however, sometimes things come up that aren’t spelled out specifically. We’re happy to help our clients with their needs, but anything that falls out of our normal scope of our Property Management Agreement may potentially be charges our hourly rates.
Landlords have the obligation to provide safe and habitable properties for their residents. Upon moving into the property it needs to be free from any pest, vermin, rodents, squirrels, birds etc. Residents are encouraged to procure their own pest control services if an owner doesn’t include them in the lease. For multi-family properties, we recommend having the exterior sprayed monthly and interior at an additional cost to the resident. For single family homes, we recommend having the resident be responsible for pest control. In either case, the resident is responsible for maintaining the property in a clean and sanitary condition.
Note: Emotional Support and Service Animals are not considered pets and cannot be subject to approval, additional deposits or pet rent, but the owner is responsible for making sure the property is kept clean and the animal is not dangerous.
Pets may not be kept on the property without the written consent of Wellspring Property Management. Pets include anything that’s not a human. Generally, we limit a property to 2 pets, unless otherwise specified or given written permission. Since the vast majority of renters have pets, we highly recommend allowing pets on the property.
Upon approval, we charge an increased deposit of $250 per pet + additional pet rent based on the Paw score from Petscreening profile. Residents are responsible for any damages caused by pets. Unauthorized pets found on the property is a serious violation that can be cause for eviction.
Petscreening is a service we use to verify the pet is who the resident says it is, has all applicable documentation like vaccinations and is required to update the information annually. The report comes back with a Paw Score between 1-5 and we base the monthly pet rent on the score. The higher the score the higher the higher the risk, the higher the pet rent. Pet rent is $10 per paw score and split 50/50 between the owner and Wellspring Property Management.
If you don’t allow pets, it may double or triple your time on market to find a resident. If you will not allow pets, please let us know on your owner intake survey, otherwise we assume pets will be allowed.
Rent is due on the 1st and considered late at 5:00pm on the 3rd. Late Fees are posted on the 5th, rent reminder emails get sent on the 6th. If we haven’t received payment by the 8th, we send 3 Day Pay or Quit Letters to anyone who owes more than $100.
After the 3 days have passed, we’ll contact you to verify you want to move forward with eviction. At this point, if the resident has a history of being late, we highly recommend not allowing payment arrangements and moving forward towards eviction.
An eviction can take as little as 30 days or as long as 90 or more depending on how much the tenant fights it and the courts schedule.
Thankfully, evictions are not that common; and usually they aren’t for residents we place in the property and if at all possible, we’ll try to mitigate the owner’s losses by encouraging the resident to move out on their own by offering “cash for keys” or some other incentive to move.
Wellspring Property Management offers owners the opportunity to have their residents conduct a walkthrough complete with video or photos depending on the type of walk through we do.
In our in person walkthrough, one of our agents will walk through the property with the resident taking photos of the interior and exterior of the property. We’ll note any maintenance issues as well as any items that the owner will want to plan for in the future.
With the new COVID world we also give the residents the option to do a virtual walkthrough of the property. An agent will “meet” the resident on a zoom call and record them walking through the property. They will be asked to zoom in on anything that needs an extra look or we should make note of. This walkthrough is recorded.
Once the walkthrough is completed, you’ll receive an email with the link to the walkthrough and any notes we have regarding the property or maintenance. If there are any health and safety maintenance items, we’ll take care of those immediately.
This inspection is only for areas we can visibly see, anything behind furniture or not easily seen won’t be included in the walkthrough. If you’d like a detailed walkthrough we can recommend a home inspector to do a more thorough inspection at an additional cost. If you’d like more than one walkthrough per year, the cost for each additional walkthrough is $195.
When a tenant purchases a home and their lease is still active, they fall under the same rules as if they are breaking the lease. They are responsible for all rent payments until the lease expires or a new qualified tenant is placed in the property.
While the property is vacant, we’ll do periodic checks to make sure the interior and exterior are in good condition, the property is presentable and no vandalism has occurred. During periods of vacancy, the utilities will be turned on either in your name or the company's name if we have a reserve on file. If you need services like yard maintenance during vacancy periods, we’re happy to recommend some vendors.
We begin the rent increase and lease update process 90 days before the expiration of the current lease if you own a single family home by sending you an email asking what your plans are for the property. If you don’t want to continue leasing the property or want to sell it, we ask you let us know then so we can begin that process with the resident. If you own a multi family complex or want to continue with the current resident we begin the lease update process at 60 days before the lease expiration.
Generally, after the first year, we allow the leases to go month to month. In our experience, tenants who want to move, will move regardless if they have a lease or not. By having a month to month tenancy it helps us coordinate the move out more smoothly and keeps tensions lower.
A normal lease is a 12 month term and if the resident wants to move before the term is over, they are responsible for either the remainder of the lease term or until a new qualified tenant is found.
The only provision for this is if the tenant is active duty military and received orders to report elsewhere. At that point, they are only required to provide a 30 day notice accompanied by their military orders or a letter signed by their Commanding Officer.
Wellspring Property Management opiates extremely lean to make sure we can give you the best service at the best price while offering fair compensation to our employees. Sometimes an owner may want us to do other things not outlined in our normal scope of services which requires an additional service fee.
All normal day to day management duties are outlined in our pricing page on our website, anything that’s outside of our normal scope of management services will incur additional service fees.
Example 1: An owner has coordinated a delivery of an appliance themselves and wants Wellspring to coordinate the property access, delivery, and installation with the company. We’ll charge a service fee to cover the additional time, personnel, and gasl to accommodate this request.
Example 2: An owner is refinancing and wants us to coordinate with the appraiser to view the units. A service fee in this circumstance covers the additional time, personnel, gas, and 24 hour notice of entry service.
Example 3: Sometimes an owner wants additional photos of a new roof, fence or other repairs. We’re happy to accommodate this request, but must charge a service fee to cover the additional costs associated with this request.
Our management agreement requires us to be named as an additional insured on your insurance policy.
The First and best line of protection an owner has in the event of a lawsuit brought on by a tenant being injured on the property by faulty wiring or a faulty appliance or anything else is to carry adequate insurance. Additional insured is a person or organization not automatically included as an insured entity under an insurance policy, but for whom insured status is arranged, usually by endorsement.
A property owner’s reason for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., employees ) or to comply with a contractual agreement requiring the named insured to do so (e.g., Property Management Agreement or others working in behalf of the owner).
The Property Management Agreements requires the owners to name the property management company as additional insured because the management company does not hold title to the rental property that they are managing and cannot acquire general liability insurance on property that they don’t own to cover the management company. Ordinarily there is no extra premium charge to the property owner to add the management company as additional insured.
We have several packages designed to fit your budget and needs. To view our packages go to the Pricing page on the top of our website.
Tenants are a valuable asset to you and Wellspring. Once you sign the Property Management Agreement, we’ll help you with the transition including notices to send to them. As the owner of the property, you can expect your tenants to give some pushback the first couple of months. If your tenant calls you, kindly remind them that you’ve turned over all management to Wellspring Property Management and to call us on the office number. We’re now the buffer between you and the resident. It’s not uncommon for residents to “cry” to you if they don’t like what we say. For instance, if we charge them a late fee because they paid rent late and “the owner has never done that”, they’ll call you and tell you how unfair it is that we’ve charged the late fee. If you give in to their complaints it ruins our chances of enforceability and defeats the purpose of why you hired us in the first place.
You and your resident will have a single point of contact. Your point of contact is the local Senior Community Manager and your tenants point of contact is the Resident Service Coordinator. The Senior Community Manager is a licensed realtor and oversees the day to day of the local area portfolio. They help to ensure you are well informed about your property, the resident is adhering to the lease and the property is being maintained properly. The Resident Services Coordinator deals with all things tenant related. They handle the application process, maintenance requests, walkthroughs and other tenant related items. This is by far not an exhaustive list and not as simple as it may seem.
Should an owner feel the need to look at the property and have someone meet them there, we can accommodate that. However, we feel it’s a bit unnecessary and may need to charge a trip fee to cover the Senior Managers time. In the past, we’ve had owners show up in town and ask to view the property that day. California law requires we give a minimum of 24 hours notice to the resident and the Senior Manager will need to make sure they have time in their schedule. Any walkthroughs need to be done during normal business hours.
There are exceptions to this rule, but we feel that if an owner wants to see the home – we can arrange it with the tenant so the owner can make a quick walk thru with the tenant present in the home. WORD OF CAUTION: We advise owners not to attempt to engage in a walk through of their home without pre-arranged permission from the tenant. In addition, at the walk thru, we advise the owners to NOT give any of their contact information to the tenants as this will lead to tenants wanting to contact the owner for something that should be handled by the company the owner has hired to manage their home.
This program is to help a landlord who’s in over their head with a tenant who hasn’t paid rent, an eviction, property destruction, and more.
We give custom quotes for each scenario due to the varying circumstances and need for help. An owner must sign a Property Management Agreement with us to qualify. If you’re interested in this program, call the office at 760-371-4282.
In short, no. Our guarantees only cover tenants we place in properties and are on our lease. We thoroughly screen and stand by our decision for tenants we place, but cannot guarantee an owner or former manager has the same standards we do.
Of course!. We encourage owners to view their property at least once every year or two. A minimum of 3 days notice is required so we can give the tenant property notice as well.
While you decorated your home beautifully, the tenants may not like the lime green wall in the bedroom and hot pink in the kitchen. We’ve found properties that have custom decorator colors tend to stay on the market longer each time it’s available. We highly recommend painting the unit a neutral off white color such as Swiss Coffee.
California state law is very specific on Smoke and CO Alarms. There must be one smoke alarm in each bedroom and in the hallway outside of the bedroom. There also must be a CO detector in the hallway outside of the bedroom. If the property is a 2 story, there must be at least 1 on each level even if there aren’t any bedrooms on that level.
All smoke alarms must be replaced once they fail to operate. Any replacements need to be a 10 year sealed unit.
Wellspring Property Management requires all exterior doors to be keyed to one single key for easy access. When a property has 7 different keys to access the different locks, it makes it hard on management as well as the tenant. A single key is easier to track and makes more sense. We also require 3 copies of that key. 2 will go to the tenant, and 1 will be kept at our office for emergencies.
We typically hold $500 per property as a reserve for repairs. This amount allows us to pay our vendors in a timely manner so they want to continue to work on your property. If a repair is a non-emergency we will contact you before we move forward to get your permission. If a repair is a health or safety concern, we will move forward with the repair since a landlord has the duty to offer housing that is healthy and safe to live in.
In short, no. We have access to various vendors who are specialized or “all around” vendors. Depending on the repair needed, we may call out a specialized vendor ie. HVAC. For normal day to day maintenance we use the best quality, best rate we can find. The cheapest vendor may not provide the best quality service which may be detrimental to the property in the future.
We believe this approach saves the owner money by only having to have the maintenance item taken care of once, as opposed to a cheap repair that needs to be done again in the future.
If the home is vacant, you can use your own vendors, but you’ll also be responsible for payment to them. If the home is occupied, we will use our own. All of our vendors are held to specific standards and we want to maintain the integrity of those standards.
Unless otherwise stated in the Lease, all utilities will be the tenants responsibility. New residents are contacted by our utility concierge service to help with the connection in their name. We turn off all tenant related utilities as of the start date of the lease. During periods of vacancy, the utilities will be transferred to our name and the owner’s account will be billed.
First, we give them the opportunity to correct the situation by serving them a Notice to Cure or Quit, and most of the time they correct the problem. If a problem persists, we’ll make a decision based on that specific situation to take more drastic measures that could include eviction if needed. If they fail to cure the issue, we’d then serve them a Notice to Quit and proceed with eviction from there, if necessary.
Maintenance costs are the biggest concern for owners. In our Property Management Agreement, we state we’ll get approval for any repairs over $500 unless it’s a health, safety or habitability issue, the property will be damaged if immediate action is not taken, or management deems it necessary to do the repair. Ordinary repairs are usually less than the $500 limit, but if we believe the cost will be over $500, we’ll send you an estimate from our vendors and get your permission. However, if we are unable to reach you after multiple attempts, we’ll move forward with the repair.
Sometimes an owner will complain that the repair was a few dollars over the limit and we didn’t get permission and the maintenance item was not an emergency. It’s likely we chose to move forward with the repair to save additional trip costs from the vendor just for the estimate, then the repair later on. In some instances, it makes more financial sense to have the repair taken care of immediately rather than send the vendor out again. This saves the vendors time, tenants time and the owner money. Imagine if you were a tenant and you took time off work to have the plumber look at a leak and the cost is $505 to repair and the vendor said they had to come back to get approval for $5. You’d have to take more time off work later on, the owner would have to pay an additional trip fee and the time it took to get the approval and repair done could be days or weeks. You’d remember that at renewal time, and may give a 30 day notice.
We always ask the maintenance companies to alert us if the repair will be more than $500, and after all these years, we have a pretty good idea what will be over the cost anyway. Sometimes the repair is going to cost less and in the process, more needs to be done causing it to go above the amount. Leaving the repair half done to get approval may cause a safety issue as well as an additional cost to you for trip charges.
Our policy when a tenant owes late charges is to hold that from the next months rent payment and pay the vendor. If the tenant fails to pay the full amount due, we serve them a 3 Day Pay or Quit for the amount of rent that wasn’t paid in addition to the late fee that would be charges on that amount.
Tenants may submit maintenance requests through our website, email, mail, or our preferred method of entering in requests through the tenant portal. After receiving a repair request, we will contact the tenant and ask them questions in order to help us determine the exact nature of the problem before sending a service technician. We make sure it is not something the tenant can fix themselves (ex: reset button on the disposal, tripped breaker etc.) before your money is spent on a service call. After determining that it is a legitimate problem, we will send the appropriate service vendor. We tell our tenants that we are able to handle most repair requests within 1 to 3 working days, and, in fact, are usually able to do so. Comfort items such as air conditioning, no hot water or heat, receive highest priority and are usually attended to the same or next business day.
In most of our leases, the tenant is responsible for yard maintenance which includes watering, cutting grass, weeding, reseeding if needed, trimming shrubs and flowers. Owners are responsible for trimming limbs that are on or near roofs. The area around the driveway, sidewalks, curbs and gutters are considered to be part of the yard and need to be kept free of weeds, grass, and leaves. For security reasons, hedges and bushes should be trimmed so they do not block the view from windows. In some cases where an owner has put a lot of money into landscaping, we recommend doing the yard work for the tenant with a professional landscaper as well as paying for water. This would be built into the lease and would afford the owner to ask for more in rent.
NOTE: Owners should not expect tenants to perform the type of upkeep that owners would do such as leave removal, fertilizing, heavy trimming, mulching, and annual type of clean ups. Tenants will usually cut the grass and trim. Unfortunately, the courts have taken the same opinion in the matter. Judges would not expect tenants to pay thousands of dollars to trim trees on the property they have lived at for 12 months.
First, careful tenant selection protects your property from being rented to unqualified people.
During the lease term, we may have occasion to enter the property for repair or maintenance reasons and will use that opportunity to examine the property. In addition, upon request, we can schedule a 6-month property inspection to see how the tenants are maintaining the property. We make sure the air filter is being changed, that the smoke alarms have batteries, and that there are no unreported problems at the property.
The right for us to make routine inspections of the property is part of the tenant’s lease agreement and can be exercised by the owner or the property manager at any time. Courtesy would dictate we offer some sort of approved notice to the tenant.
We believe that you hire a property manager to manage the property for you, not to assist you in managing it yourself. We offer a turnkey style of property management service which is most appreciated by those property owners who prefer to be “out of the loop” on all but the most important matters related to the management and leasing of the property. We don’t have to pester you with small details, questions, information or “updates” about your property or tenants, except for those matters which will have a significant impact on your monthly cash flow. Instead, we can simply take care of the things you have entrusted us to handle on your behalf.
If you have any questions, you can always reach out to us and we’re happy to get back to you within 24 business hours.
The actual maintenance expenses for the home are the responsibility of the homeowner. Every effort is made to control maintenance costs while maintaining the integrity and value of the property. While the property is occupied, the tenants are required to notify our office of any problems. If the estimated cost to repair exceeds the maximum that is allowed in the Property Management Agreement, the owner is contacted for permission to make the necessary repairs. (Except as outlined in the agreement)
We realize it can be rather upsetting when you receive an unexpected bill from us for repairs made to your property; however, some repairs are urgent and must be corrected immediately. Emergency repairs are made in accordance with our Property Management Agreement. If, in our opinion, the expense was due to tenant negligence, the tenant will be billed and become liable for the entire amount. We do not do bids or estimates on repairs under $250.00. On larger jobs, a bid will be presented to you for approval before work can begin. In addition, we would require a 50% payment up front to cover any costs of material to begin the work.
We ask that owners deposit $500.00 for a maintenance reserve upon signing the Property Management Agreement. A copy of any bills will accompany your statement explaining the type of work/repair accomplished on the property and posted to the owner portal.
If the home is vacant, you can use your own vendor. If home is occupied, then we will use our approved vendors.
If you have a pool, we highly recommend you hire a professional to service the pool. We can recommend a couple of companies and give those costs to you if requested.
No smoking of any substance is allowed inside the property.
We prefer that the owners do not use a Home Warranty Company to make repairs at their rental property. It is possible for us to accommodate a home warranty – but read this first!
There is a HUGE problem in the home warranty industry, and the public is becoming savvy to it.
Try searching Google with the name of your favorite home warranty company and the word `complaints’ or `fraud’. You will be amazed. Find out how many people feel like they got burned, turned down wrongfully, or got seriously bad service. Furthermore, feel free to visit www.my3cents.com for even more examples of this currently growing problem THERE ARE MANY OTHERS…..
Almost Every time we call a home warranty company for a problem, they deny the service either on grounds of lack of maintenance, the issue isn’t covered or abnormal wear and tear. How do you define abnormal wear and tear and lack of maintenance? When it comes to exclusions and small print, Warranty contracts say a claim can be denied for lack of maintenance, improper maintenance, improper installation, pre-existing problems, code violations and numerous other reasons.
Warranties are typically purchased by home sellers or their real estate agents to avoid lawsuits if something breaks in the first year.
Not to be confused with a builder’s warranty, a so-called home warranty — Actually a service contract — is typically purchased for existing homes, especially homes sold by real estate agents. These service contracts generally cost $400 to $600 for a year-long basic-coverage plan that includes items like ceiling fans, water heaters and furnaces.
The contracts come with loopholes. You need to carefully read your service agreement to determine what is and what isn’t covered. Coverage for plumbing, for example, typically ends at your home’s foundation, so leaks or breakages beyond that would be your responsibility. “Pre-existing” problems typically aren’t covered, nor are breakdowns that result from poor maintenance or improper installation. The contract also may require that a system be upgraded to current building code standards — at the homeowner’s expense — before they agree to consider repairs. People who have had problems with the home warranty companies say that the more expensive the repair or replacement, the more likely home warranty companies are to invoke these exclusion clauses.
You don’t have control over who does the work. The home warranty provider contracts with local service companies to perform the actual inspections and repairs. You don’t get to choose, and scheduling repairs can sometimes be a trial taking days for immediate service.
The service technician may also try to sell you unneeded services.
So what is a homeowner to do? Many consumer advocates would say it’s better to “self-insure” — setting aside a reasonable sum each year to cover routine maintenance and finding reliable local contractors to do the work. You can’t shift all the risk of home repairs to a home warranty company because, as noted above, many repairs won’t be covered by your agreement.
So when might a home warranty make sense? If you are trying to sell a house, a home warranty can give buyers some peace of mind and may reduce the chances of your being sued should an appliance or system break down after the sale.
We have had hundreds of problems with home warranties.
An example: we had an HVAC go out on a property. We contacted the home warranty company, paid the $75 deductible and they assigned a vendor not from the area and they came 2 weeks later to “look” at the problem. Their assessment was a part needed to be repaired. After trying to reach them for 2 weeks and multiple calls to the home warranty company, they finally scheduled with the tenant repaired the part.
About a week later the tenant called in to say the AC wasn’t working again. We went through the process again, called, paid, scheduled etc, but this time the owner would need to pay $1000 out of pocket to get the repair done by the home warranty company's assigned vendor. This time the vendor had to order the AC and it would take 4-6 weeks to get the unit in. Meanwhile the resident hasn’t had AC for over 2 months at this point and is getting quite frustrated and we were having the same communication issues with the assigned vendor.
In the end the tenant got a hotel for 3 months, received a rent credit for those months and terminated his lease. After all was said and done the owner was out over $5000. If we would have contacted our preferred HVAC vendor the issue would have likely been resolved in a few days, costing the owner way less and probably would have kept a good tenant.
On another property, a leak needed to be repaired. The home warranty company took 2 months and made more than 5 trips to the property due to having to get additional approvals from the home warranty company. If you were the tenant how would you feel? Would you be renewing your lease with this landlord anytime soon?
If, as a property management company, we wanted to damage our reputation with as many tenants as possible by providing the lousiest repair service possible, there is no better way to accomplish that than by using a warranty company on all service calls. They simply are not compatible with the level of service we demand of our vendors.
Our owners and vendors have been burned so many times in years past that we finally decided we had enough, and said “no more”. Nothing affects the reputation of a property management company more than the manner in which repairs are handled. Tenants judge us by almost no other measure. It therefore makes little sense to entrust vendors we don’t know, whom we have no relationship with or control over, with the reputation of our company and the relationship with your tenant. Instead, when repairs are needed, we will send our trusted vendors with whom established relationships exists, and they will provide the quality service we require in a professional and timely manner. That said, if we determine through our own vendor that a covered mechanical item in your home has failed, or is in need of costly repair, we will endeavor to get whatever Home Warranty company you have out to honor the warranty, provided that they accomplish the service call and repair in a time frame and manner that is reasonable and just to all parties.
Tenants have more rights now than they ever have had in the past and Judges are normally on the side of the tenants and if repairs are not made timely, owners can find themselves on the wrong side of the legal system. It is hard enough to try to use a home warranty on the home that you live in. It is not cost effective or practical to use a home warranty on a rental property.
Insurance: You must advise your insurance company that the property will be a rental unit and also name Wellspring Property Management as an “additional insured on the policy” Also, be certain that you have adequate Property and Liability Insurance coverage no later than ten (10) days after signing the Property Management Agreement or we will add you to our master policy at an additional cost.