Working with managing agents in New York? Here are some debt collection tips for when it comes to working with managing agents.
Many of the buildings in New York are managed by an outside agent known as a managing agent. The managing agent receives a management fee in return for managing the building. Managing buildings as an agent is a business like any other – you get a fee for service. A successful managing agent will manage many buildings.
The building and the managing agent will have an underlying agreement that gives the agent the authority to bind the building, and may limit the dollar amount for any and all transactions.
Working With Managing Agents in New York
Managing agents secure goods and services for the building(s) they manage. The managing agent may issue a formal request for vendors to bid to work with one or more buildings or look to providers they regularly use for other buildings they manage. They may use different vendors at different buildings.
Our clients who provide goods and services to buildings in New York look to solidify relationships with managing agents because of the agent’s ability to contract the services for more than one building. The service provider can increase their book of business exponentially by having a successful relationship with a managing agent and their various representatives.
Billing, Invoicing, and Debt Collection
Generally, when working through managing agents, vendors bill the agent for the services or goods provided to the building.
If working with more than one building, the various balances may be broken down by property manager and/or building. More often than not the invoice goes to only the managing agent and not the building. The client’s internal collection efforts are also generally targeted towards the managing agent.
Here’s the problem. A managing agent is a disclosed agent for the building. Although the agent contracted you to provide goods and/or services to the building, they are not ultimately responsible for payment, assuming the managing agent acted within the scope of their agreement with the building.
Assuming they acted within the scope of the agent’s agreement with the building, did not guarantee the debt, and there was no fraud in securing the goods or services, the principal, the building, is liable for the balance owed.
What does this mean for collection efforts? It means that your customer is the building that benefited from your product or service. Debt ollection efforts should be directed towards the building or buildings individually, not the managing agents.
As a debt collection firm that works with clients that provide services to rentals, co-ops, and condos in New York, we attempt collection from managing agents and the building itself.
Mechanic Liens and Litigation
If timely, you can file a mechanics lien against the building if your services improved the value of the property, regardless of whether it was the building or managing agent that contracted your services. Doing so will not preclude you from filing a civil suit for money owed from the building. You do not need to foreclose on the lien to collect from the building and, sometimes, to increase your chances of collection, it’s best not to.
Questions about how to collect a debt from a building or managing agent? Contact us for a consultation.
