Getting rid of my property management company

Lender · St. Augustine, FL · Member since 2015 · 120 posts · 26 votes

I am going to get rid of my property management company because they are not doing the best job. I only have one single family house under management so I believe I will be able to handle it myself, because I have been dealing with the issues all along. The only thing they have been useful for was collecting rent. My question is how do I go about letting them go? What happens to the contract the tenant signed, because it was the property management company's rental contract? What about the deposit my tenant put down, will they have to transfer that over to me? Also, does anyone have a free and easy way I can collect rent from an out of town tenant? Thanks everyone! Jaren

0 Reply

43 views

Most Popular Reply

JD MartinBusiness Member

Moderator

Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

10y

Your contract with the PM company should spell out the divorce terms. If not, you'll have to wing it to some extent. If they are a professional management company with other clients, getting the deposit shouldn't be that difficult. The lease the tenant signed with them is the legal lease, so whatever that lease is (you do have a copy, right?) is what you'll follow until it's up. As for collecting from the tenant, it depends on what your lease says and how the PM was collecting. My leases require tenants either deposit directly into my account or use one of two different electronic services. If your tenant can pay by check, have them mail payment to your business address. If they pay cash, set up a bank account with a bank that is local to them and have them deposit it directly into that account.

Podcast Guest on Show #243

Skyline Properties

View Page

1 Reply

See this reply in the discussion

4 Replies

Jump to latestLatest

Sort by

JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
10y
Your contract with the PM company should spell out the divorce terms. If not, you'll have to wing it to some extent. If they are a professional management company with other clients, getting the deposit shouldn't be that difficult. The lease the tenant signed with them is the legal lease, so whatever that lease is (you do have a copy, right?) is what you'll follow until it's up. As for collecting from the tenant, it depends on what your lease says and how the PM was collecting. My leases require tenants either deposit directly into my account or use one of two different electronic services. If your tenant can pay by check, have them mail payment to your business address. If they pay cash, set up a bank account with a bank that is local to them and have them deposit it directly into that account.
Podcast Guest on Show #243
Skyline Properties
View Page
1 Reply
Jaren Woeppel
OP
Lender · St. Augustine, FL · Member since 2015 · 120 posts · 26 votes
10y
Thanks, JD. Yes, I have a copy of the lease, I'll comb through it and see if there are terms in there if we decide to part ways. Also, the tenants lease is up in a few months and she has already described her interest in extending the lease another year. Would it be easiest to part ways then or better to cut ties now and get it over with?
0 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
10y
review your management agreement to see what conditions apply. Some managers charge a termination fee, so watch out for that. If they do charge a large amount, you may be better off waiting for the management agreement to expire.
Your notice to the PM should be in writing. It should include a specific termination date with at least 30 days notice (your agreement may require more). Specify the following:
1. Transfer tenant security deposit, last month's rent, or any other funds held. If you have a reserve, request that be returned, as well.
2. Return all keys, openers, etc.
3. Provide a copy of the entire tenant file, to include the lease agreement, applications, correspondence, payment ledger, etc.
4. Provide current contact information for the Tenant(s).
5. PM should notify the tenant of the pending change with YOUR contact information and an effective start date. You should receive a copy if this notice.
Based on your dissatisfaction, I would be very clear with them and stay on top of them so it doesn't fall through the cracks. Try to communicate only in writing, keep it brief, and stay professional.
If your current tenant is part of the problem, let them know you do not intend to renew and give them the opportunity to leave early. Keep in mind they may be bad tenants because the PM allowed it. Maybe you can set a new standard and get them back on track.
The DIY Landlord Book4.7247 Reviews
Website View Page
1 Reply
Fred Heller
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
10y
There should be some clause for early termination of the contract. It will probably involve some sort of fee paid to the company.
The lease is always yours. The PM company may have signed it as your representative, but the lease belongs to you. Any security deposits they collected should be turned over to you upon termination of the contract. You should lock those deposits away in a trust account That money is not yours. It belongs to the tenants until such time as you are able to deduct from them due to damage, unpaid rent, etc.
Personally, and I know I'm the odd man out on this, I don't like long-term contracts. All of my property management agreements have an initial term of three months, and then they convert to month-to-month. I do this because I don't want to be stuck with some dog property. I figure that three months is long enough to determine if a deal works for me, and likewise for the owner. And yes, I have canceled agreements after the three months because it became obvious to me that the property was more trouble than it was worth.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.