Sunday, May 12, 2013

Beware of Michael Mackay

Michael R. Mackay and his wife Darla do business as "The HomeXchange" in the Cincinnati, OH area. I've recently had the unfortunate experience of conducting business with these folks.  I will cover the full details at a later time, so for now all I wish to bring attention to is the complete disregard Michael has for the contracts that he signs. I don't know if he is so careless with all of his contracts, but he certainly was with mine.

Michael and I signed a contract wherein he would lease my house. He would then be able to turn around and sublease the house to someone else, who hopefully would buy the house at the end of the contract period. Michael would profit both on the monthly rent, and on the final sale price of the house. I don't begrudge him this profit; he offered a service and I felt that service had value. The problem I have is with the way Michael conducts his business. Michael had 1 key obligation to me for the duration of the contract, and that was to pay me rent by the 1st of the month. That's it. Given our modern era of electronic banking and automatic payments, this should have been no problem. But as you'll see for yourself, it turned out to be a constant problem:

 Contract Due Date  Actual Date Paid  Business Days Late  Calendar Days Late 
Feb 1, 2011 Feb 22, 2011 15 21
Mar 1, 2011 Mar 8, 2011 5 7
Apr 1, 2011 Apr 5, 2011 2 4
May 1, 2011 May 6, 2011 5 5
Jun 1, 2011 Jun 13, 2011 8 12
Jul 1, 2011 Jul 8, 2011 4 7
Aug 1, 2011 Aug 5, 2011 4 4
Sep 1, 2011 Sep 13, 2011 7 12
Oct 1, 2011 Oct 7, 2011 5 6
Nov 1, 2011 Nov 9, 2011 6 8
Dec 1, 2011 Dec 19, 2011 12 18
Jan 1, 2012 Jan 17, 2012 10 16
Feb 1, 2012 Feb 2, 2012 1 1
Mar 1, 2012 Mar 14, 2012 10 13
Apr 1, 2012 Apr 20, 2012 15 19
May 1, 2012 Apr 20, 2012 0 0
Jun 1, 2012 Jun 6, 2012 3 5
Jul 1, 2012 Jul 5, 2012 3 4
Aug 1, 2012 Aug 6, 2012 5 5
Sep 1, 2012 Sep 7, 2012 5 6
Oct 1, 2012 Oct 9, 2012 6 8
Nov 1, 2012 Nov 13, 2012 8 12
Dec 1, 2012 Dec 17, 2012 10 16
Jan 1, 2013 Not Paid -- --


Some key points regarding the above:

  • The contract specifies that after 10 business days of no payment, the contract is in default. The red boxes above are the times he was late with his payment beyond this deadline. The yellow ones are basically right at the last possible moment, and I would need a lawyer to confirm whether or not those also constitute default. I will talk later about the reasons I allowed this to happen more than once, but in short there was a second contract in play.
  • The green box represents an actual on time payment. Note that it only happened once, and was largely because the previous month was so late he decided to pay two months at once.
  • The average is a little over 6 business days late.
  • Note that he was late from the very first month. He had sub-leasers in my house already, and I would later learn that he had collected a substantial down payment from them, but still he could not pay even the first month on time.
  • My contract with Michael was in no way related to when the sub-leasers would pay him. I would later learn that their payment was due on the 25th each month, and the Mackays were very diligent about making sure the payment was received. Even if they had ever been late, my contract did not care, so their behavior should have in no way affected Michael's ability to pay on time.
  • Michael still has not made the final payment, and it is 5 months overdue as I type this.

At the time we first met, Michael lived in a large, luxurious house and drove a big BMW. The amount that he owed me each month was probably less than his car payment, so this is not someone who is hurting for money.

Michael specifically hand wrote a clause into our contract such that there would be no penalty for late payment until the 10 day deadline. I wasn't too worried about it at the time, thinking it was more of a "in case of emergency" kind of thing. I have now come to understand he did this quite deliberately because he enjoys being late with his payment.

Michael and Darla conducted an interview of me and my wife initially, effectively to determine if we were trustworthy enough of doing business with them. This has turned out to be quite the farce, as they are the ones who have revealed themselves of being unworthy. Michael proudly includes his military service in his profile. I'm guessing he has been away for too long, as he has clearly forgotten the meaning of terms like duty and honor.

So if you are considering entering into a business relationship with Michael and Darla Mackay, either individually or through their "The HomeXchange" business, I strongly suggest that you run quickly the other way. In my experience, they do not honor the terms of their contracts. As shown above, not only are they routinely late with their payments, they didn't bother to make the final payment. I am now in the position of deciding if legal action will be worth it to get the remaining money. If you do not heed this warning and wish to do business with the Mackays anyway, make sure you have a lawyer review every single line of any contract before you sign. And do not take Michael's word on any matter. Make sure all claims are written down.

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