Real Estate Investor · Corpus Christi, TX · Member since 2016 · 2 posts · 1 vote
I am the owner of a rental property. I have been having troubles with my current property management company. The PM is completely aware that I do not like how they conduct business. I talked to the state realty commission about the PM and the state investigator made a call on my behalf to the PM.
Currently there is a tenant in the home with a lease that expires in 5 months. I have asked for the cancellation of the property management contract. The PM contract states that I will give them 90 notice.
Both the PM and I agree that we should terminate the contract immediately because the business relationship is not working. The PM claims that he needs to terminate the lease because he doesn't want his name on anything regarding the disposition of the property down the road. Is there a way end my current PM contract, keep fulfill the obligations of the current lease, and absolve the current PM from being liable in the property disposition for the current lease or extension of?
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
@James Paulson That is total BS. The lease is not between the PM and the tenant. It's between the tenant and you with the PM acting as your representative. Period. Once you terminate the PM agreement, you, or your new PM, will send a notice to the tenant that the property is under new management and explain where rent payments, maintenance requests, etc. should go in the future. That's all you have to say. You don't have to air out your dirty laundry with the PM to the tenant.
Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
10y
@James PaulsonWhy not talk to your tenant and explain the issue. Have them sign a new 5 month lease on your lease form, keeping all of the terms and details of the existing lease. The tenant will have to know about the change in PM, as they will have to pay someone different and know who to call in the event of an issue.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
@James Paulson That is total BS. The lease is not between the PM and the tenant. It's between the tenant and you with the PM acting as your representative. Period. Once you terminate the PM agreement, you, or your new PM, will send a notice to the tenant that the property is under new management and explain where rent payments, maintenance requests, etc. should go in the future. That's all you have to say. You don't have to air out your dirty laundry with the PM to the tenant.
Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
10y
I agree with Fred,the tenant is not involved in this dog fight so don't drag them into it.Simply tell the tenant that you are now in complete charge of the property and any questions should be directed to you personally.
Real Estate Investor · Corpus Christi, TX · Member since 2016 · 2 posts · 1 vote
10y
Thanks for your responses. There is a clause in the contract that the PM has to agree with whom a lease is turned over to. I am currently making the claim that vacating the property in not in my best interests and therefore in violation with state real estate laws. He wants me to sign a document having any responsibility to either me or the tenant. Initially the dispute I had with the PM was dishonesty in his relationship with a contractor. What can I do to stop them from evicting the tenants in the mean time?
Flipper/Rehabber · Orlando, FL · Member since 2015 · 15 posts · 8 votes
10y
Seems like this is being overthought. Why not just terminate your current agreement with your property manager and then send a notice to your tenants stating that there is a new manager in place? Am I over-simplifying the situation? Good luck!
Developer · Portland, OR · Member since 2014 · 732 posts · 490 votes
10y
@James PaulsonI recommend taking a step back to look at the larger picture.
1. You can fire your PM. Even if the contract says 90 days, you can still fire them immediately. I can guarantee you that they don't need 90 days to unwind this property from their portfolio. If you both agree to do it quickly and amiably then there is no need to dwell on this aspect.
2. Ultimately that is your tenant in there, not the PM's. They may have executed the lease but that doesn't mean that it is their tenant. The PM is your agent, but the lease runs with the property.
3. If the PM attempts some bogus eviction I would slap them with a lawsuit. That's ridiculous.
4. A simple change of management lease addendum is all is really takes to update the tenants on the new management and how the system will be run from now on.
5. I don't know what exactly the PM is trying to make you sign but if it is a liability waiver then I would strongly recommend that you don't sign it. Red flags start going off, especially if your problems with the PM stem from outside contractors.
Take control of your property and get your rental back on track. Good luck!
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
10y
Read the PM contract carefully. The PM could:
literally be the lessor to the tenant(s)
OR be an agent acting in your behalf
Would be surprised if (1) and if so, you will need them to Assign the Lease, Rents and deposits to you.
If the more normal (2), then you can reassert your ownership, advise tenants to sent all payments directly to you and to ignore the existing PM as they no longer are your agent.
You will still need to payout the 90 day term for the PM, but at least YOU have control again.
Thanks for your responses. There is a clause in the contract that the PM has to agree with whom a lease is turned over to. I am currently making the claim that vacating the property in not in my best interests and therefore in violation with state real estate laws. He wants me to sign a document having any responsibility to either me or the tenant. Initially the dispute I had with the PM was dishonesty in his relationship with a contractor. What can I do to stop them from evicting the tenants in the mean time?
This reminds me of that Seinfeld episode where he wanted to break up with a woman he was dating, but the woman refused to accept the breakup. The PM can put any kind of clause in the contract that they want, it doesn't mean that the clause is legal and/or enforceable. I wouldn't sign anything, just give proper written notice (as prescribed by local law, not your PM contract) to the PM that you are terminating services, then take the lease (which is yours and between you and the tenant) to another PM. Your current PM does not have to like it or agree ...