Termination of Property management

4 Replies

I would like to know the process to terminate the contract with our property management before the term ends. Our contract end by July, but they are doing repairs and charges without seeking any approvals. Per contract they are suppose to get approval for all repairs above $250 dollars. Pls advise

Send them a copy of the contract with that clause highlighted . But then repairs will be $ 249.00 . Or if you are close you do the repairs .   If their contract is good , they will have an early termination clause .   

One way the management companies make money is the nickle and dime repairs . They add up nicely at the end of the week . 

I don’t see anything in the contract related to early termination.

I would like to know if I can send a contract termination because the contract is not kept on their end. Then why would I ?

Hello Moncy, Like any business relationship, the success with your property manager will depend on honest and respectful conversation.  There could be many reasons why they are performing maintenance without discussing it with you first; the most important determination is whether the work being done was necessary.  The most litigated issue in property management is always maintenance-related.  Georgia law is pretty clear in that an owner is responsible to keep their property maintained and property manager's role is about risk avoidance to save you potential legal dollars added on to the cost of maintenance.  No offense to Matthew, but I don't agree that a property manager will immediately resort to getting work done without discussion by lowering the price.  A good property manager is going to get the work done at the most reasonable price possible.  My contracts now put the threshold for a conversation prior to conducting repairs at $500 because my investors know that I'm a partner with them and will not perform work that doesn't need to be done, plus I care about the continuing value of their property.  

Bottom line, I would ask for an appointment, sit down and review the maintenance items with your current manager.. if it's all reasonable, then just ask how you can have better communication. If it's not reasonable, then you need to have a different conversation.

@Moncy Samuel I will start by playing Devil's advocate. Have you contacted your PM and asked for clarification? That's who your agreement is with. They have a responsibility to protect your interests and abide by the agreement you made. Maybe there's a good reason for what they've done. Maybe they're crooks. We can all give you suggestions but you generally won't know how to act until you've spoken to the agent and gathered the facts.

Your PM agreement may not have a clause pertaining to early termination but it should have something regarding termination for failure to comply, default, or something to that effect. If not, you need to learn more about contracts before signing the next one.

I recommend contacting your manager. Find out why they allowed these charges above the agreed limit. If they cannot provide a satisfactory answer, consider whether you want to clarify their responsibilities and give them the opportunity to get back on track or if you want to fire them. 

If you decide to fire them, line up a replacement manager first!!! And before doing that, educate yourself on what a good manager looks like. Review their contracts, ask to speak with some of their current Landlords and Tenants, ask questions about how they handle maintenance, inspections, late rent, evictions, renewals, tenant screening, etc. Once you have a new manager ready to go, give your current manager notice of termination.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.