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How to Sue a Property Management Company

Claudia Diaz - Security Deposit - September 24, 2023

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    In many cases, landlords hire property management companies to serve as intermediaries between them and their tenants. However, if a property management company fails to properly handle a tenant situation or violates its agreement with the property owner, the owner, and the tenant in certain situations, may be able to seek legal action to resolve the dispute.

    Did you know we have a free tool powered by AI that helps you create a demand letter to a property manager? This is usually the first step before suing them. Check out our demand letter tool.

    In the article below, we go over how to sue a property management company, common lawsuits filed against property management companies, and go over the small claims process. 

    Quick Facts: Suing a Property Management Company 

    Most common lawsuits against property management companies 


    Maintenance issues.

    Breach of contract.

    Negligence. 

    Unlawful eviction. 

    How much can you sue a property management company for? 

    The maximum amount you can sue for in small claims court is called the small claims limit

    This amount varies by state and even by court. 

    For the most part, the maximum you will be able to sue for is $10,000. That means if your claim is worth more than the small claims limit, you need to waive any additional amount over the limit. 

    Or you can sue in a regular civil court (however, small claims courts are more affordable and efficient than other types of courts). 

    By when should you file your small claims lawsuit against a property management company? 

    You don’t want to wait too long to file your small claims lawsuit against a property management company because you don’t want to miss the deadline to file, known as the statute of limitations

    Do you need to hire an attorney to sue a property management company in small claims court? 

    You can choose to hire a landlord/tenant attorney to help you with your dispute against a property management company. 

    However, some small claims courts don’t allow attorneys to represent you. In those instances, the attorney would only help you prepare your case and help you understand the law around the claim you want to bring. 

    An attorney may not take your case if it is for a relatively small amount. Attorneys are looking for cases that are worth several thousand dollars, as they usually spend a significant amount of time helping you.


    Common Types of Lawsuits Filed Against a Property Management Company in Small Claims

    Both tenants and property owners can sue a property management company for a variety of reasons, some of those reasons being the same. 

    Here are some examples: 

    • In cases where a property management company has violated the terms of its contract with a property owner, the owner may choose to take legal action against the company. 

    • However, since tenants typically do not have a direct contractual relationship with property management companies, breach of contract cases involving tenants are less common

    • Nonetheless, both property owners and tenants may have grounds for similar types of claims against property management companies. For example, both owners and tenants may want to file a negligence lawsuit against a property management company.

    Property Owners Suing a Property Management Company 

    A property owner may sue a property management company for a variety of reasons related to the management of their property

    Here are some common disputes between property owners and management companies: 

    • Breach of contract. If the property management company violates a term in the management agreement, a property owner can sue a property management company for breach of contract. This may include issues such as failure to collect rent, failure to pay bills, or failure to maintain the property.

    • Failure to perform services. If the property management company fails to provide services outlined in the management agreement, such as screening and selecting tenants, the property owner can sue for services not rendered. Note, most small claims courts don’t allow you to sue to force someone to do something. For instance, if a property management company is failing to collect rent in accordance with the contract, the court cannot force them to collect rent. However, if you have paid for services that were never rendered, the court may be able to award you damages for the amount paid.

    • Fraud. If the property management company engages in fraudulent or deceptive practices, such as making false claims about the finances of the property, a property owner can sue for fraud. 

    • Negligence. If the property management company fails to maintain the property or respond to tenant complaints, causing damage or injury to the property or tenants, the property owner can sue a property management company for negligence. Note, negligence claims are quite nuanced because they require you to prove certain elements. Further, if the negligence in question has caused physical harm to someone, you will need to show additional elements. In these instances, consider contacting an attorney that specializes in negligence or personal injury. 

    Tenants Suing a Property Management Company 

    There are also several reasons why a tenant may want to sue a property management company, including:

    • Failing to properly maintain or repair the rental property. In some cases, this may not be the property management company’s responsibility.The obligation to make necessary repairs may fall on the property owner. Before suing for this type of claim, review your lease agreement, as it may say who is responsible for maintaining and repairing the rental property

    • Negligence. A tenant may also sue a property management company for negligence. 

    • Unlawful eviction. If the property management company tries to evict a tenant without following the proper legal procedures, a tenant may sue for unlawful or illegal eviction.

    What To Do Before Suing a Property Management Company in Small Claims Court

    Review Your Lease 

    You will want to review your lease or management agreement first before suing a property management company for a couple of different reasons: 

    •  To make sure you are suing the right entity. This is especially important for tenants as we often see cases where tenants should be suing their landlord instead of a property manager. For example, if you are a tenant and want your security deposit back, you want to sue the person that has your security deposit which is usually the landlord. 

    • To make sure you followed proper procedures before suing. Your lease or management agreement may discuss how disputes should be handled in case they arise. Make sure you are actually able to sue in small claims court before going through the process and paying legal costs. 

    • To gather evidence for your claim. Your lease or management agreement may contain important information that can be used as evidence in your claim. For example, if you are suing for breach of contract, your lease agreement can be used as evidence of the property management company's obligations. 

    Collect All Evidence

    The evidence you will need to sue a property management company will depend on the specific circumstances of your case. However, here is a general list of evidence you should consider collecting: 

    • Written documents. Any written documents related to your tenancy or relationship with the property management company, such as the lease or management agreement, notices or letters sent to you by the property management company, etc. 

    • Photographs or videos. If there are any issues with the rental property, such as damage or unsafe conditions, taking photographs or videos can provide evidence to support your claim.

    • Any receipts or invoices from any repairs or cleaning you paid for.

    • Financial records. For example, if you are suing as an owner who hasn’t received rent collected by the property management company. You will want to provide evidence that shows you haven’t received any payments. 

    Communicate Directly With the Property Manager by Sending a Letter

    Consider sending either a complaint letter or demand letter to your property manager before suing in small claims court. A demand letter and a complaint letter are both formal written document that requests payment or some other action from a recipient. Need to send a demand letter to a landlord instead? Check out our article here.

    These letters typically outline the facts surrounding the dispute or claim, and the requested remedy or relief sought

    Did you know we have a free tool powered by AI that helps you create a demand letter to a property manager? Check out our demand letter tool.

    Steps for Suing a Property Management Company in Small Claims Court

    There are generally 4 steps in the small claims process:

    1. Prepare the lawsuit. 

    2. File the lawsuit.

    3. Serve the lawsuit.

    4. Prepare for the hearing.

    We break down each one of these steps below. 

    How to Prepare Your Small Claims Lawsuit 

    You will need to fill out the required forms for your small claims lawsuit. The small claims form will typically ask these 3 questions: 

    1. Who are you suing? 

    • This means you need to know the property management company’s legal name. Your lease or management agreement should state the correct legal name of the property management company. 

    • However, make sure if you are a tenant and looking at your lease that you don’t confuse your landlord or apartment complex for the property management company

    • If you aren’t sure whether your lease or management agreement has the company’s legal name or instead has a trade name, assumed name, or, fictitious business name, you can search for the property management company on your state’s Secretary of State website

    2. How much are you suing for? 

    • Remember, there is a maximum you will be able to sue for in small claims court.

    • You will need to write down a specific dollar amount you are suing for. For example, if you are suing over unpaid rent collection, you would list the amount of rent the property management company owes you. 

    3. Why are you suing the other party in small claims court? 

    For example, are you suing for breach of contract or negligence? 

    How to File Your Small Claims Lawsuit 

    Once you have prepared your small claims forms, you will need to file them with the court. Depending on your local small claims courts, you may be able to file your claim using one of the various methods below:

    1. In person at the small claims court,

    2. Online,

    3. Mail, or 

    4. By Fax. 

    People Clerk can help you prepare and file your small claims lawsuit against a property management company. 

    How to Serve Your Small Claims Lawsuit 

    The next step after filing your lawsuit is to notify your tenant that you are suing them. This is called "service of process" or "serving."

    Who can serve a small claims lawsuit?

    • NOT YOU. You cannot serve your own small claims lawsuit.

    • Court Clerk. The court clerk may be able to serve the lawsuit by mail. 

    • Process Server. A process server may be able to serve your lawsuit. A process server is someone licensed to serve lawsuits. This is what they do for a living, so they are pretty good at it. 

    • Sheriff. Not all sheriffs serve small claims lawsuits, this will depend on the county where 

    • Friend or Family member. You can have an adult friend or family member serve your small claims lawsuit. Make sure they are not part of the lawsuit or aren't involved with what happened with the lawsuit. 

    How to Prepare for Your Small Claims Hearing

    To prepare to win at your small claims court hearing: 

    • Research the law. Depending on your claim, you may want to research a specific legal topic. At this stage, you can also consider consulting with an attorney if you have questions about the claim you want to bring to court. 

    • Prepare your evidence. Your evidence should be geared towards showing the judge why the property management company owes you money. You also want to have your evidence organized with titles, dates, and why that piece of evidence is important. We have seen people with really strong cases fail to win at their hearing because they couldn’t find the right piece of evidence to support their claims. People Clerk can help you organize your evidence in a judge-friendly evidence packet.

    • Prepare what to say. During the hearing, the judge will ask you why you are suing. The judge will then turn to the property management company, and ask for their side of the story. Start by addressing the judge as “your honor,” and from there, explain in a clear and concise manner what the dispute is about.  

    • Print enough copies of all your evidence. Make sure you have enough copies for yourself, the property management company, and the judge. 

    Learn about the 5 mistakes you should avoid making during your small claims hearing. 

    Alternatives: File a Complaint Against a Property Management Company 

    Besides suing in small claims court, you can also file a complaint against a property management company with one of the following government or nongovernment organizations

    Need to file a complaint against a landlord or apartment complex instead? Check out our article here. 

    How to File a Complaint With the National Association of Residential Property Managers 

    The property management company you are dealing with may be registered with a national industry organization like the National Association of Residential Property Managers. NARPM is a trade organization for the residential property management industry, not a federal agency. 

    NARPM allows tenants and property owners to register a complaint against a property management company employee. All complaints are taken to the NARPM Board of Directors, which determines whether or not the company you have complained about adhered to the organization’s ethical standards. 

    Here is how to register a complaint with NARPM:

    1. Check if the property management company you want to register a complaint against is a member of NARPM using the link here

    2. Use the link here to download the complaint form.

    3. Once filled out, mail the complaint to the mailing address below:

    NARPM National

    1403 Greenbrier Parkway, Suite 150,

    Chesapeake, VA 23320

    How to File a Complaint With the U.S. Department of Housing and Urban Development 

    If you have experienced some type of housing discrimination by the property management company you may want to file U.S. Department of Housing and Urban Development (“HUD”). This federal agency is responsible for national policies and programs that address America's housing needs, HUD also enforces fair housing laws, along with much more. 

    Complaints of housing discrimination are handled by the Office of Fair Housing and Equal Opportunity (an office under HUD) at 1-800-669-9777. Or you can submit a complaint online, by mail, or by email by following the instructions here

    How to File a Complaint With the Better Business Bureau

    The Better Business Bureau (“BBB”), is a non-profit that serves as an intermediary between property management companies and consumers. If you have a complaint you would like to file against a property management company, the BBB allows you to file complaints and reviews against a property management company online

    Reasons why a property management company would respond to a BBB complaint: 

    • If the property management company is accredited with the BBB and they don't respond to a BBB complaint, its accreditation may be revoked, and the complaint becomes part of its BBB profile.

    • Property management companies know that a BBB rating can be an important determining factor when a prospective renter is making a decision to rent with an apartment complex managed by it. 

    Learn how to file a complaint with the Better Business Bureau (BBB).

    How to File a Complaint With Your State Attorney General 

    State attorneys general are tasked with investigating and prosecuting businesses that engage in deceptive or fraudulent practices. Additionally, many state attorney general's offices have established dedicated units or programs to specifically address consumer protection issues. These units usually handle a variety of consumer complaints, as well as provide educational guides to help consumers navigate different industries.  

    Filing a complaint with the attorney general is usually as easy as completing a complaint form online or calling their complaint hotline.

    Did you know we have a free tool powered by AI that helps you create a demand letter to a property manager? Check out our demand letter tool.

    Author

    Claudia Diaz

    Legal Educator @ People Clerk. Claudia holds a J.D. degree and is a certified mediator in New York and Florida. She has participated in dozens of small claims mediations in New York City courts.

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