Can you amend the lease signed by property manager in the middle?
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3yQuote from @Ed Ju:
Welcome to the BiggerPockets forums!
You can't change the terms of the Agreement but you can terminate management and transfer the Agreement to the new Property Manager to enforce. All the new PM will do is send Tenants a notice of new management with instructions on how to make payments, communicate maintenance issues, etc. Your new PM should know how to handle this. If they don't, you should look for a different PM.
The DIY Landlord Book4.7247 Reviews
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- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3yAloha,
If you are not named in the tenant lease, you are not a party to it, and have zero authority to change it. It is however, fairly customary when changing management companies, for Owners to instruct their current management (IN WRITING) to notify tenants of a change to XYZ Property Management effective February 1, 2023. XYZ's contact info is: Phone, Mailing Address, email. Further, tenants should be advised by them to make (for example) January rent as usual to current company, but February must be paid to XYZ by the due date of your current agreement to avoid late fee or other costs. (The actual dates you choose will be dependent on the terms of your management agreement and/or decisions you make and communicate in writing to your current management regarding the actual cutoff date and local law for such tenant notices)
Also, regardless if you ARE or are not named on the tenant lease, you cannot change the current lease term, but whoever will be managing it will need to honor the stated end date and all other terms, other than change of payment location and contact info as above. It is always much cleaner to have the current management send a simple introductory notice of change, which the new management should follow up with a more detailed letter which might include how maintenance requests are made and other non-material, lawful, changes to routine operations. Changes of late fees, grace period, due dates, rental amounts, deposits and other material changes can only be made once the original term ends or is lawfully terminated. In the event the tenant is actually willing to sign a new agreement, the original should still be terminated in writing with current management and tenant both signing.
You need to read your new management agreement and understand the terms. If the contract states their duties are to "manage" the rental on your behalf, then you should not have any expectation that you would be named in a tenant's rental agreement. Typically one of the main reasons for hiring a PM is to separate you, as Owner, from the day to day operations dealing with tenants. By inserting yourself in the middle, you set up the management team to fail, as the tenant will inevitably play you vs. them, creating at best, significant additional effort and aggravation to all involved. - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Ed Ju:
Welcome to the BiggerPockets forums!
You can't change the terms of the Agreement but you can terminate management and transfer the Agreement to the new Property Manager to enforce. All the new PM will do is send Tenants a notice of new management with instructions on how to make payments, communicate maintenance issues, etc. Your new PM should know how to handle this. If they don't, you should look for a different PM.
The DIY Landlord Book4.7247 Reviews - 3yEd JuMember since 2022 · 8 posts · 1 voteOP
Thank you so much @Richard F., @Nathan Gesner, really appreciate detailed responses, it is very useful.
- Property Manager · California Washington North Carolina South Carolina, Georgia and Alabama · Member since 2020 · 71 posts · 27 votes3y
Hello Ed,
The information provided to you is correct you can switch from management company lease terms. For example as a property manager we have a Welcome notice that is posted to the door informing them of the new management company any owner's rights notices that may need to be served and letting them know of the new services available to them. If your rental is in the greater Sacramento area I would love an opportunity to see if our resources could benefit you, your rental asset and your tenants. PM if you are interested.
- 3yChad HalePro MemberProperty Manager / Investor · San Jose, CA · Member since 2013 · 780 posts · 301 votes
@Ed Ju As the others stated, you can't modify the lease but you can change management companies.
We do this all the time. We provide a notice for the owner to give the tenants and then follow up with our own notice and introductions.
We handle the communication with the previous management company to get all tenant information, application, lease, ledger, notices, keys etc. Every management company has been easy to work with in the transition, so far.
- 3yEd JuMember since 2022 · 8 posts · 1 voteOP
Quote from @Ed Ju:
Thank you so much @Richard F., @Nathan Gesner, really appreciate detailed responses, it is very useful.
Thanks Richard, Nathan, as a follow up, if I want to manage the property myself, what are the forms that I need to sign to terminate the property management agreement? and the forms needed to transfer the lease agreement be transferred into my name from property management?
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3y
Quote from @Ed Ju:
Quote from @Ed Ju:
Thank you so much @Richard F., @Nathan Gesner, really appreciate detailed responses, it is very useful.
Thanks Richard, Nathan, as a follow up, if I want to manage the property myself, what are the forms that I need to sign to terminate the property management agreement? and the forms needed to transfer the lease agreement be transferred into my name from property management?
To be clear, I am not an attorney or offering legal advice, but, to terminate the existing management agreement, simply deliver or mail certified, return receipt requested, a letter simply referencing the property address, the date and parties to the management agreement, and a date (based on actual termination terms of the management agreement, if any) which their management will end. It is customary for ANY type of service contract to provide at least 30 days written notice. NOTE- there will still be much for them to do in order to actually close out your account and transfer all funds after that end date. It easily takes 60 days or more for last invoices (for work done while they were managing) to be received and paid, finalize their accounting, close the month end reports and provide your final reports, and any remaining balance due, to you. Security deposits, current rental agreements (and/or estoppel letters confirming current terms) with move in condition form and all addenda, current rent roll, and any current delinquencies should be turned over, along with all keys in the possession of management, within a very few days of the official end of their management. You also need to confirm and get copies of any other service contracts for the property such as yard or pool service, pest control, etc. You will need to send change of address notice to those contracts that you will keep in place, and send notice of termination to those you will not keep. Utility service billing may also need to be changed, if any are provided to the tenant such as water/sewer, gas, electric, (internet or cable tv for many condos).
With regard to "transfer the lease agreement", there is no specific "form", but a written notification needs to be properly delivered or mailed to each tenant as I described in the first paragraph of my initial response to your post.
It is "Best Practice" for any and ALL agreements, and most communications to be in writing with regards to Real Estate. Get in the habit. - 3yEd JuMember since 2022 · 8 posts · 1 voteOP
Quote from @Richard F.:
Quote from @Ed Ju:
Quote from @Ed Ju:
Thank you so much @Richard F., @Nathan Gesner, really appreciate detailed responses, it is very useful.
Thanks Richard, Nathan, as a follow up, if I want to manage the property myself, what are the forms that I need to sign to terminate the property management agreement? and the forms needed to transfer the lease agreement be transferred into my name from property management?
To be clear, I am not an attorney or offering legal advice, but, to terminate the existing management agreement, simply deliver or mail certified, return receipt requested, a letter simply referencing the property address, the date and parties to the management agreement, and a date (based on actual termination terms of the management agreement, if any) which their management will end. It is customary for ANY type of service contract to provide at least 30 days written notice. NOTE- there will still be much for them to do in order to actually close out your account and transfer all funds after that end date. It easily takes 60 days or more for last invoices (for work done while they were managing) to be received and paid, finalize their accounting, close the month end reports and provide your final reports, and any remaining balance due, to you. Security deposits, current rental agreements (and/or estoppel letters confirming current terms) with move in condition form and all addenda, current rent roll, and any current delinquencies should be turned over, along with all keys in the possession of management, within a very few days of the official end of their management. You also need to confirm and get copies of any other service contracts for the property such as yard or pool service, pest control, etc. You will need to send change of address notice to those contracts that you will keep in place, and send notice of termination to those you will not keep. Utility service billing may also need to be changed, if any are provided to the tenant such as water/sewer, gas, electric, (internet or cable tv for many condos).
With regard to "transfer the lease agreement", there is no specific "form", but a written notification needs to be properly delivered or mailed to each tenant as I described in the first paragraph of my initial response to your post.
It is "Best Practice" for any and ALL agreements, and most communications to be in writing with regards to Real Estate. Get in the habit.Thank you Richard, greatly appreciate the guidance.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Ed Ju:
Again, the original contract stays in place. All you need is a notice to the Tenant that says you are transferring management to a new property manager. The new PM should then contact the tenant with instructions for payment, reporting maintenance, and other communication. It should also let the Tenant know that the original contract remains in place until termination.
You could create a new lease as long as all parties agree in writing, but it is unnecessary.
The DIY Landlord Book4.7247 Reviews - 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Most states require a lease to identify the owner of a leased property, whether a person, trust, LLC, IRA, etc.
Landlord = Lord of the Land = Owner
Agent = someone legally representing the owner
Property Manager = agent
You may want to confirm this with an attorney as it sounds like your current PMC is clueless.
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