Property Manager Withhold Rent to Landlord

5 Replies


I own rental properties in Atlanta suburb and my PM has been late (paid after the 25th) paying the rent to me and my fellow investors for various reasons for many months. This month she upped the ante and demanded us to send her signed property management agreements before she pays us. It is obvious that she did not have her copy and is trying to hold our rent hostage to recover. I don't like her hardball approach and don't want to send her my copy just yet but wonder whether she has broken her fiduciary duty as my PM with this demand therefore has voided the PM agreement.

Thank you for your help.

@Tom Braddy always look at your contract to see if the PM has stipulated as the payment date for you as the client. It wouldn't be advantageous for the PM to do so, because they do have to collect the rent from the tenant in order to pay you the investor. Effective communication is the key to any PM/Investor relationship. If your PM isn't communicating late payments from the tenants and keeping you informed of the circumstance of your investment, then it is time to consider a change in management. Let me know if you need any other guidance

@Tom Braddy you would really need to consult an attorny that specializes in civil contract law. However most contract have a default clause which governs how a breach or contract is typically handled. Some contracts have a curing period where the defaulting party can make right by the contract, and cure the breach. Most of the time you will need to place the other party on notice that they are in breach of the agreement, and you would like to terminate for cause.