Case Study: Accounting and Property Management Neglect

Multi-Family Property Management of 12 Complexes in Texas

We took over the management of twelve multi-family complexes in Texas, in the Dallas Forth Worth Metroplex and Houston and Pasadena, for a Canadian group. The property management company which had managed the DFW real estate for about 9 months before Protea, delivered to Protea a number of large boxes full of invoices and statements, some of which were several months old, and these had never been entered into any accounting software for the properties. Protea’s new client therefore had a very inaccurate idea of what was owed to creditors of the properties. Protea’s staff worked overtime for about six months to get the accounting records properly written up. Previous management had not bothered to do this. But they paid themselves their management fees every month.

After taking over the properties in Houston and Pasadena, Protea’s area supervisor traveled from Dallas to Houston, at first every week, and then every second week, and spent two days at the three properties concerned. The on-site managers of the properties informed Protea that the previous management company’s supervisor, who had been based in Houston, had physically attended at the properties no more than an hour a month each. But the management company paid itself it’s management fees each month.

When Protea took over management of these properties, they became insured under Protea’s master policies and the owners’ premiums were decreased by over one third and their deductibles decreased by eighty percent!