Correct Course of Action?

rmason

A former employee moved a tenant into a 10x15 unit.  Electronic lease was signed with rent and fees collected.  Later same day tenant needed a larger unit, a 10x25.  Same former employee transferred him to a 10x25 along with remaining rent from the 10x15.  Electronic lease for new unit was signed. Later on same day same former employee reduced to rent on the 10x25 to $0.00.  This error was not identified for several months.  As it now stands the tenant has been living rent free for several months, normally visiting his unit several times a week (according to the gate code).  Our plan is to bill him for the back rent, overlock his unit, and offer a payment plan while still collecting his monthly rent.  We now have an audit plan in place to prevent this from reoccurring.   Thoughts?

ESS

First of all...WOW! I see you're saying former employee and that's good! Even as the manager, I am restricted from making rate changes in SiteLink, so that would be a good idea to restrict with your other employees if you haven't already done so. If there is a signed lease with the amounts listed, I would definitely do as you described to collect the past rent that is owed! The tenant knows he owes and should be held accountable. Did the former employee know this person? Family/friend?

Orkocean

IMO you need to forget the past rent, the mistake was employee/company related, not the tenants so while yes they knew they should of been paying something it's not their fault it happened. Since it wasn't a rent increase letter going out to say their rent was $0.00 I would just set the rate back to what it should be according to their lease for the next rental period that hits.

I've seen this happen with someone putting rent increases in and missing a digit, so a 140.00 rent became 14.00 and went that way for almost a year before I took over the area and did an audit. Soon as it was found it was popped for a rent increase and I put them a bit over the standard to recoup some of the losses. The tenant knew it was a mistake as up until that point they came and paid in person, the second the new rent went into effect for $14.00 they suddenly always paid online but once again, it was a company error, not theirs. 

Orkocean

Also as far as an audit plan in place to check for this it only takes a moment to pull a report that shows complimentary units. Shouldn't need a full audit to check into. You could even setup corp control to run it automatically as often as you'd like.

i43storage

I'm with @Orkocean.  You need to - possibly legally - forgive the past rent.  Simply give him the 30-day notice of a rent increase, giving him the option to move out if he wants.

Orkocean

i43storage said:

I'm with @Orkocean.  You need to - possibly legally - forgive the past rent.  Simply give him the 30-day notice of a rent increase, giving him the option to move out if he wants.

I don't think a rent increase notice would even be needed from how I read this. If the customer signed a lease with a stated amount of rent listed and then somehow an employee went in and zero'd the rent amount after the fact you should be able to just put it back to that amount without any notice needed for the next period. If the customer even thinks to dispute or complain I would gladly point out due to a workers mistake they have been not had rent due in however long and you're honoring the mistake by not charging them the back rent due, they can pay their bill or kindly take their belongings immediately. 

i43storage

Ah - I over-read the part where the actual signed lease had the correct amount.  Sorry ... Friday. 

Self_Storage_Life

I agree with @Orkocean.  I am a owner and I had this happen years ago.  Employee rented the unit and I failed at checking the proper reports as I was young and fairly new.  The said tentant went for better than a year before I figured out what happened.  I just sucked it up as it was my fault that I should have been checking those things and not relying on my employee.

ASPTU

@rmason what did you decide to do?

teamcapitola

I'm afraid I'm with the majority on this; drop the past few months and move forward. trying to go back and collect isn't worth the potential hassle (legal & otherwise)

Now, with that said, another thought would be that your ex-employee knew, and knows what the actual rate is on that unit, and is totally taking advantage of you.

I'd make sure your current employee wasn't "in cahoots" with them first (although you say it was the Former employee who lowered the rate?!?), then I might have a "strong" conversation with the ex employee about trust, ethics, and the MASSIVE rent increase I'm about to make. 

AnitaJohnson1269

Do you take cash payments?  I had an assistant many many years ago who would take a cash payment, void the receipt, issue a credit or adjustment... (I caught her within a few weeks of being hired) and pocket the cash.  We did not use SiteLink though, so the reports were kinda vague.  The manager before me never knew.

teamcapitola

AnitaJohnson1269 said:

Do you take cash payments?  I had an assistant many many years ago who would take a cash payment, void the receipt, issue a credit or adjustment... (I caught her within a few weeks of being hired) and pocket the cash.  We did not use SiteLink though, so the reports were kinda vague.  The manager before me never knew.

Doing thorough walkthroughs and matching  your systems rented units to actual locks out on units, is essential to help prevent that sort of thing.

Unfortunately, I'm pretty sure everyone here has some story of shrink, or outright thievery.

At one job a long while back, I showed a group of new employees how the security cameras on the registers overlaid what was typed on that register (in real time)... not 2 hours later one of them was busted for pocketing about $40 cash that he didn't ring all the way through!

I asked him "Why in the hell did you do that RIGHT after I showed you that it was being watched?!?" 

"I donno"

CVSSSTORAGE

@AnitaJohnson1269
only the owner here can do adjustments and things like that. The only credit I can give is a referral credit or the 13th month free when a full year is paid 

AnitaJohnson1269

@CVSSSTORAGE same here.  I was just a part timer when I caught the Assistant Mgr. (we did not have a manager) The petty cash was always off too! Apparently she "borrowed" from that regularly.  Then here I come along with upteen years of retail, counting petty cash in and out every day.... that's pretty much when the red flags went up.  

rmason

Thanks for all the comments.  
Our Florida lawyer recommended the following course of action after correcting the rent rate:

1) Send tenant an invoice for the total amount due with a "friendly email" pointing out our bookkeeping error while also mentioning his frequent use of his rent free unit.  Ask him to call or stop by the office so we can correct the problem.
2) IF he calls or shows up offer him several options to repay the amount due with options to pay a reduced amount and remain a tenant.
3) If he rejects all options terminate his lease and turn account over to our collection agency.

At day 6 after invoice (coming soon) we over lock his unit and lock him out of the gate.  Should be interesting!!! 

P.S.  Former employee was "relieved for cause" - an old military term.

i43storage

Oohrah!

Orkocean

rmason said:

Thanks for all the comments.  
Our Florida lawyer recommended the following course of action after correcting the rent rate:

1) Send tenant an invoice for the total amount due with a "friendly email" pointing out our bookkeeping error while also mentioning his frequent use of his rent free unit.  Ask him to call or stop by the office so we can correct the problem.
2) IF he calls or shows up offer him several options to repay the amount due with options to pay a reduced amount and remain a tenant.
3) If he rejects all options terminate his lease and turn account over to our collection agency.

At day 6 after invoice (coming soon) we over lock his unit and lock him out of the gate.  Should be interesting!!! 

P.S.  Former employee was "relieved for cause" - an old military term.

To each their own  but I see this being a clusterf$%^ of a situation going that route. I wish you the best and hopefully it's a customer who responds the way you hope as I see that becoming a hornets nest. I also hope it's a customer who does not have a big friends/social network in the area to spread any bad word of mouth, a lot of people underestimate how much damage that can do to a site. 

teamcapitola

I'm actually surprised that you allowed a Terminated employee rent at the facility... what would stop them from badmouthing to other tenants, or committing any number of things to sabotage (or just prank) the facility?

I guess it depends on what they were "fired, with cause" for, but if they are classified as "not rehirable" I don't want them on the property ever again. 

i43storage

This thread makes me glad I do not have employees.