Breaking Up with Management Company?

Question

Anyone ever fired a management company? Have six properties they are managing- none of them well. Have existing tenants in 4 properties, 2 vacancies. Would love to hear from anyone who has done this about things to look out for, things you wish you had known, things you wish you had done differently, etc. Any advice is appreciated.

Bjorn Ahlblad · Answer

When we had OOS properties we naturally had a local PM. A while later we moved into one of our OOS rentals. We bought more properties and ran those ourselves, at which point we no longer saw the need for a PM and gave them 30 days notice.

The transition was quite smooth and business like. We scribbled our name on the leases and gave the tenants new payment instructions.

Drew Sygit · Answer

@Armistead Johnson

1) Get copies of all leases & ledgers BEFORE letting them know about termination

2) Try to get tenant contact info also

3) Read contract to know termination process

Richard F. · Answer

Aloha,

Send a letter, Certified, Return Receipt 
Requested terminating their management effective X DATE. Check your Management Agreement to see if it specifies how 
many days notice are required to terminate the contract (30 is 
customary, but your agreement and/or local law may state otherwise) and what, if any, penalty there is. 
Once you know what the earliest lawful termination date will be, send a 
notice to tenants informing them of the change in management and how to contact you, where to make payments, how to request maintenance etc. The rest 
of their terms will remain the same until the end of their current agreement. You should inform them their current agreement WILL be terminated at end of term, and they will need to submit a new application if they want to remain. Also, they will need to sign a new Rental Agreement with YOUR terms if approved. The 
transfer of documents, funds, keys, financials etc. will take time, but 
you must do everything in writing so you have a record of it.

Theresa Harris · Answer

Read your contract with the PM.  Talk to other PM to see what they offer and if they would be better.  Talk to your current PM about the problems you are having with them.

Jeff Copeland · Answer

1. Work with your current PM to make it a smooth and amicable transition. Check your property management agreement to fully understand any early termination fees. Better to check now than to get caught by surprise later on.

2. One thing people often don't think about is the fact that the timing is important. It's generally best to allow your current PM to collect all of the rent for the month, then make the transition. This allows you and/or your new PM 3-4 weeks to get notices out to your tenants advising them of new management, new payment methods, new maintenance processes, etc. You don't want to do this on the 28th of the month, then find that half of your tenants already paid the old PM for the next month's rent.

3. Make sure your security deposits and any prepaid rent get transferred to you (or to your new PM) by the old PM. You don't want to realize 9 months from now when a tenant moves out that you no longer have their last month's rent and/or security deposit to disburse.

Manco Snead · Answer

I fired a PM and contract required a 30 day notice, so I paid them the 1 month management fee in lieu of waiting the 30 days because I wanted them out of my life asap. Having to pay for the remainder of the year doesn't sound right. If that's what the contract says try to have a civil conversation with them to change that.

I've used 3 PM companies; all horrible.

Eliott Elias · Answer

You most likely will have to pay the management company a management fee for every property for the remainder of the year to cancel.

Nathan Grabau · Answer

Management is a brutal business, but they are the ones who signed up to by PM's. With the 2 vacancies are they listed on websites like apartments.com or zillow? Have they recommended a price cut? If they are listed publicly and are not moving, they are likely over priced. We are seeing rents come down in some places.

That being said, a lot of PM's just totally suck, and it is very normal to move on to yourself or a new one. I am very happy with my PM, but I know that is not the norm.

Their fault: No listed online, slow response time to issues, expensive repairs, not telling you to cut the price

Your fault: Not cutting the price when they tell you, buying properties that are run down and expecting a low maintenance expense, buying properties in crappy neighborhoods and expecting good tenants

I do not have enough info to figure out which category this falls into, but this would be how I would determine whether its a property issue, a you issue, or a them issue.

Breaking Up with Management Company?

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