The last time Dan Neal saw Terry Shockley, it was Feb. 5 when they met near Neal’s newest property, the Patterson Tower apartment complex, for their monthly catch-up session.
It was a normal meeting, according to Neal, where the two casually discussed the properties that Neal owned and Shockley’s company, Eugene Rentals or TS Property Managements, oversaw.
That same day, Shockley’s company was forced into receivership after an investigation revealing the cash shortages in its trust accounts for owners’ rental payments and tenants’ security deposits. Lane County Circuit Court gave Shockley’s firm to Washington-based financial company Pivotal Solution Inc. to determine the amount of leftover cash.
One week later, Shockley was reported missing with an estimated amount of $4 million. His company manages rent for 3,500 units in the University of Oregon’s campus area, including Neal’s two apartment complexes, the Patterson and the Coho.
“It was a shock,” Neal said. “Looking back, it is really hard to comprehend what was really in his mind.”
When it comes to housing properties, property management companies are responsible for a lot: they fill apartments with occupants, provide maintenance services when tenants request them, and handle lease contracts after they’re signed.
They’re also responsible for collecting rent and deposits from tenants on the behalf of the property owner — which is the money that Shockley took with him when he disappeared.
Now, the owners of those 3,500 units are not only scrambling to look for a new property manager, but also trying to piece together a puzzle with many stolen pieces.
Brian Deveraux, who owns a fourplex apartment on East 18th Avenue and Hilyard Street that was managed by Eugene Rentals, estimated that he lost $15,000, including multiple security deposits and two months of rent.
“According to what I have heard, no way I’m going to get paid back,” said Deveraux. “And I will have to pay out of my pocket for my tenants’ deposits.”
With the middleman no longer in place, property owners now have to work closely with their tenants to facilitate damage control — who had previously interacted mostly with Eugene Rentals employees.
UO student Trevor Lan, who moved into a unit managed by TS Property Management last December, thought an email he had received from his landlord was a “scam.” Ping Song, a student resident of Patterson Tower, received an email from Neal’s company Paradigm Inc. on Feb. 11 saying the building’s property manager had changed but that the living conditions, rental rate and their security deposits would remain the same.
By law, tenants managed by Eugene Rentals will be credited for their deposits and rent paid for previous months. But that’s about the only thing that’s guaranteed. Since documents relating to units are normally handled by property mangers, students who have already signed a lease contract with TS Property might not be guaranteed the apartment they were hunting for, said Deveraux. This is because property owners typically receive applications only after they are approved by property managers.
Charlie Durrant, manager of Campus Connection, another UO-area property management firm, said that situation can be avoided “as long as the tenants have their copies of the contract.”
Until Pivotal Solutions can decipher how much is left in Eugene Rental accounts, all property owners can do is move the pieces around.
After getting the email from Pivotal Solution about the receivership, Neal immediately sent out a notice to tenants and arranged to transfer his properties to Von Klein.
“It’s a financial pain for us,” Neal said. “But I can assure that (rental) rates are not going up because of that.”
Deveraux made arrangements to switch his fourplex over to Campus Connection, where two of his other properties are currently managed.
“It has been in limbo since last week,” Deveraux said. “All we could do is wait for Pivotal Solution to come out with what is left.”
Terry Shockley’s case is being transferred to the FBI for further investigation, the Register-Guard reported.
“At this point, all I want is Terry to show up so people could ask him directly,” Deveraux said. “For me and other owners, we are ready to move on and put this behind us; it’ll be nice to talk to him and plan forward in the future.”