All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Coronavirus Content & Resources Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Companies Hard Money Lenders Contractors Investment Companies

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowGeneral Landlording & Rental PropertiesArrowEarly PM contract termination
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Topic: 1031 Exchanges Topic: Akron Real Estate Forum Topic: Alabama Real Estate Q&A Discussion Forum Topic: Alaska Real Estate Q&A Discussion Forum Topic: Alberta Real Estate Forum Topic: Albuquerque Topic: Allentown Real Estate Forum Topic: Anchorage Real Estate Forum Topic: Ann Arbor Topic: Arizona Real Estate Q&A Discussion Forum Topic: Arkansas Real Estate Q&A Discussion Forum Topic: Arlington Real Estate Forum Topic: Asheville NC Real Estate Forum Topic: Ask About A Real Estate Company Topic: Athens Real Estate Forum Topic: Atlanta Real Estate Forum Topic: Aurora Real Estate Forum Topic: Aurora Real Estate Forum Topic: Austin Real Estate Forum Topic: Bakersfield Real Estate Forum Topic: Baltimore Real Estate Forum Topic: Bankers, Lenders, and Mortgage Brokers Topic: Baton Rouge Real Estate Forum Topic: Beaverton Real Estate Forum Topic: BiggerPockets Business Podcast Topic: BiggerPockets Exclusive PRO Area Topic: BiggerPockets Money Podcast Topic: BiggerPockets Real Estate Investing Summit Topic: BiggerPockets Summer Reading List Topic: BiggerPockets Webinar Discussion Forum Topic: Billings Real Estate Forum Topic: Birmingham Real Estate Forum Topic: Bismarck Real Estate Forum Topic: Boise Real Estate Forum Topic: Boston Real Estate Forum Topic: Bridgeport Real Estate Forum Topic: British Columbia Real Estate Forum Topic: BRRRR - Buy, Rehab, Rent, Refinance, Repeat Topic: Buying & Selling Real Estate Discussion Topic: California Real Estate Q&A Discussion Forum Topic: Cambridge Real Estate Forum Topic: Canadian Real Estate Topic: Cape Cod Real Estate Forum Topic: Cape Coral Real Estate Forum Topic: Casper Real Estate Forum Topic: Cedar Rapids Real Estate Forum Topic: Chandler Real Estate Forum Topic: Charleston Real Estate Forum Topic: Charleston Real Estate Forum Topic: Charlotte Real Estate Forum Topic: Chattanooga Real Estate Forum Topic: Chesapeake Real Estate Forum Topic: Cheyenne Real Estate Forum Topic: Chicago Real Estate Forum Topic: Chittenden County Real Estate Forum Topic: Cincinnati Real Estate Forum Topic: Cleveland Real Estate Forum Topic: Coastal NC Real Estate Forum Topic: Colorado Real Estate Q&A Discussion Forum Topic: Colorado Springs Real Estate Forum Topic: Columbia Real Estate Forum Topic: Columbia Real Estate Forum Topic: Columbus Real Estate Forum Topic: Columbus Real Estate Forum Topic: Commercial Real Estate Investing Forum Topic: Completed Deal Diaries Topic: Connecticut Real Estate Q&A Discussion Forum Topic: Construction & Remodeling Diaries Topic: Contractors Topic: Conway Real Estate Forum Topic: Coronavirus Conversation Topic: Coronavirus Government Assistance Programs Topic: Creative Real Estate Financing Forum Topic: Currently Under Contract Topic: Dallas Real Estate Forum Topic: Davenport Real Estate Forum Topic: Dayton Real Estate Forum Topic: Delaware Real Estate Q&A Discussion Forum Topic: Denver Real Estate Forum Topic: Des Moines Real Estate Forum Topic: Detroit Real Estate Forum Topic: Do it Yourself Topic: El Paso Real Estate Forum Topic: Eugene Real Estate Forum Topic: Evansville Real Estate Forum Topic: FAQ Forum Topic: Fargo Topic: Fayetteville Real Estate Forum Topic: First Time Home Buyer Topic: Florida Real Estate Q&A Discussion Forum Topic: Foreigners Buying in the USA Topic: Fort Collins Real Estate Forum Topic: Fort Lauderdale Real Estate Forum Topic: Fort Smith Real Estate Forum Topic: Fort Wayne Real Estate Forum Topic: Fort Worth Real Estate Forum Topic: Fresno Real Estate Forum Topic: General Foreclosure & Pre-Foreclosure Forums Topic: General Landlording & Rental Properties Topic: General Real Estate Investing Topic: Georgia Real Estate Q&A Discussion Forum Topic: Germantown Real Estate Forum Topic: Get Foreclosure Help - Stop Foreclosure Forum Topic: Gilbert Real Estate Forum Topic: Glendale Real Estate Forum Topic: Goals, Business Plans & Entities Topic: Grand Rapids Real Estate Forum Topic: Green Bay Topic: Greensboro Real Estate Forum Topic: Hammond Real Estate Forum Topic: Hartford Real Estate Forum Topic: Hawaii Real Estate Q&A Discussion Forum Topic: Henderson Real Estate Forum Topic: Hialeah Real Estate Forum Topic: Hilo Real Estate Forum Topic: Home Owner Association (HOA) Issues & Problems Forum Topic: Honolulu Real Estate Forum Topic: Housing News & Real Estate Market Discussions Topic: Houston Real Estate Forum Topic: HUD, VA, and Tax Sales Topic: Huntington Real Estate Forum Topic: Huntsville Real Estate Forum Topic: Idaho Falls Real Estate Forum Topic: Idaho Real Estate Q&A Discussion Forum Topic: Illinois Real Estate Q&A Discussion Forum Topic: Indianapolis Real Estate Forum Topic: Indiana Real Estate Q&A Discussion Forum Topic: Innovative Strategies Topic: Interest Rate Drops Topic: International Real Estate Topic: Investor Deal Diaries Topic: Investor Psychology Topic: Iowa Real Estate Q&A Discussion Forum Topic: Jackson Real Estate Forum Topic: Jacksonville Real Estate Forum Topic: Jersey City Real Estate Forum Topic: Job Loss/Company Closings Topic: Joliet Real Estate Forum Topic: Jonesboro Real Estate Forum Topic: Kailua Real Estate Forum Topic: Kānèohe Real Estate Forum Topic: Kansas City Real Estate Forum Topic: Kansas City Real Estate Forum Topic: Kansas Real Estate Q&A Discussion Forum Topic: Kentucky Real Estate Q&A Discussion Forum Topic: Knoxville Real Estate Forum Topic: Lakewood Real Estate Forum Topic: Landlord Problem Solving Topic: Las Cruces Real Estate Forum Topic: Las Vegas Real Estate Forum Topic: Lewiston Real Estate Forum Topic: Lexington-Fayette Real Estate Forum Topic: Lincoln Real Estate Forum Topic: Little Rock Real Estate Forum Topic: Local Real Estate Networking Topic: Long Beach Real Estate Forum Topic: Long Island Real Estate Forum Topic: Los Angeles County Real Estate Forum Topic: Louisiana Real Estate Q&A Discussion Forum Topic: Louisville Real Estate Forum Topic: Madison Real Estate Forum Topic: Maine Real Estate Q&A Discussion Forum Topic: Managing Your Property Topic: Manchester Real Estate Forum Topic: Manitoba Topic: Marketing Your Rental Topic: Marketplace Topic: Maryland Real Estate Q&A Discussion Forum Topic: Massachusetts Real Estate Q&A Discussion Forum Topic: Meads Real Estate Forum Topic: Memphis Real Estate Forum Topic: Meridian Real Estate Forum Topic: Mesa Real Estate Forum Topic: Miami Topic: Michigan Real Estate Q&A Discussion Forum Topic: Military Investing Topic: Milwaukee Real Estate Forum Topic: Minneapolis Real Estate Forum Topic: Minnesota Real Estate Q&A Discussion Forum Topic: Mississippi Real Estate Q&A Discussion Forum Topic: Missoula Real Estate Forum Topic: Missouri Real Estate Q&A Discussion Forum Topic: Mobile (Alabama) Real Estate Forum Topic: Mobile Homes & Mobile Home Park Investing Topic: Modesto/Merced Real Estate Forum Topic: Montana Real Estate Q&A Discussion Forum Topic: Montgomery Real Estate Forum Topic: Mortgage Payment Suspension Topic: Mt. Pleasant Real Estate Forum Topic: Multi-Family and Apartment Investing Forums Topic: Nampa Real Estate Forum Topic: Naperville Real Estate Forum Topic: Nashville Real Estate Forum Topic: Nebraska Real Estate Q&A Discussion Forum Topic: Nevada Real Estate Q&A Discussion Forum Topic: Newark Real Estate Forum Topic: New Brunswick Real Estate Forum Topic: Newfoundland and Labrador Real Estate Forum Topic: New Hampshire Real Estate Q&A Discussion Forum Topic: New Haven Real Estate Forum Topic: New Jersey Real Estate Q&A Discussion Forum Topic: New Member Introductions Topic: New Mexico Real Estate Q&A Discussion Forum Topic: New Orleans Real Estate Forum Topic: New York City Real Estate Forum Topic: New York Real Estate Q&A Discussion Forum Topic: Norfolk Real Estate Forum Topic: North Carolina Real Estate Q&A Discussion Forum Topic: North Dakota Real Estate Q&A Discussion Forum Topic: Northwest Territories Real Estate Forum Topic: Norwalk Real Estate Forum Topic: Nova Scotia Real Estate Forum Topic: Nunavut Real Estate Forum Topic: Oakland Real Estate Forum Topic: Off-Topic Topic: Ogden Topic: Ohio Real Estate Q&A Discussion Forum Topic: Oklahoma City Real Estate Forum Topic: Oklahoma Real Estate Q&A Discussion Forum Topic: Omaha Real Estate Forum Topic: Ontario Real Estate Forum Topic: Orange County Real Estate Forum Topic: Oregon Real Estate Q&A Discussion Forum Topic: Orlando Real Estate Forum Topic: Overland Park Real Estate Forum Topic: Pearl City Real Estate Forum Topic: Pennsylvania Real Estate Q&A Discussion Forum Topic: Peoria Real Estate Forum Topic: Personal Finance Forum Topic: Philadelphia Real Estate Forum Topic: Phoenix Real Estate Forum Topic: Pittsburgh Real Estate Forum Topic: Pocatello Real Estate Forum Topic: Portland Real Estate Forum Topic: Portland Real Estate Forum Topic: Prince Edward Island Real Estate Forum Topic: Private Lending & Conventional Mortgage Advice Topic: Property Insurance Questions & Discussions Topic: Providence Real Estate Forum Topic: Provo Real Estate Forum Topic: Quad Cities Real Estate Forum Topic: Quebec Real Estate Forum Topic: Questions About BiggerPockets and Official Site Announcements Topic: Raleigh Real Estate Forum Topic: Rapid City Real Estate Forum Topic: Real Estate Agent Forums Topic: Real Estate Crowdfunding Forums Topic: Real Estate Deal Analysis and Advice Topic: Real Estate Development & New Home Construction Topic: Real Estate Events and Happenings Topic: Real Estate Guru, Book & Course Reviews and Discussions Topic: Real Estate Investor Marketing Help & Advice Topic: Real Estate News & Current Events Topic: Real Estate Not-So-Successful Stories Topic: Real Estate Quizzes Topic: Real Estate Rookie Podcast Topic: Real Estate Success Stories Topic: Real Estate Technology, Social Media & Blogging Topic: Real Estate Wholesaling Questions & Answers Topic: Rehabbing and House Flipping Topic: Reno Real Estate Forum Topic: Renters Discussion Topic: Rent to Own a.k.a. Lease Purchase, Lease Options Topic: REOs Topic: Rhode Island Real Estate Q&A Discussion Forum Topic: Richmond Real Estate Forum Topic: Rio Grande Valley Real Estate Forum Topic: Riverside Real Estate Forum Topic: Rochester Real Estate Forum Topic: Rockford Real Estate Forum Topic: Sacramento Real Estate Forum Topic: Saint Paul Real Estate Forum Topic: Salem Real Estate Forum Topic: Salt Lake City Real Estate Forum Topic: San Antonio Real Estate Forum Topic: San Diego Real Estate Forum Topic: Sandy Springs Real Estate Forum Topic: San Francisco Real Estate Forum Topic: San Jose Real Estate Forum Topic: San Luis Obispo Real Estate Forum Topic: Santa Fe Real Estate Forum Topic: Saskatchewan Real Estate Forum Topic: Savannah Real Estate Forum Topic: Scottsdale Real Estate Forum Topic: Seattle Real Estate Forum Topic: Short Sales Questions Topic: Short-Term and Vacation Rental Discussion Topic: Shreveport Real Estate Forum Topic: Sioux City Real Estate Forum Topic: Sioux Falls Real Estate Forum Topic: South Bend Real Estate Forum Topic: South Carolina Real Estate Q&A Discussion Forum Topic: South Dakota Real Estate Q&A Discussion Forum Topic: Southeast NC Real Estate Forum Topic: Spokane Real Estate Forum Topic: Springdale Real Estate Forum Topic: Springfield Real Estate Forum Topic: Stamford Real Estate Forum Topic: Starting Out Topic: St. Louis Real Estate Forum Topic: Stockton Real Estate Forum Topic: St. Petersburg Real Estate Forum Topic: STR Strategies Under Travel Restrictions Topic: Surprise Real Estate Forum Topic: Tacoma Real Estate Forum Topic: Tallahassee Real Estate Forum Topic: Tampa Real Estate Forum Topic: Tax, Legal Issues, Contracts, Self-Directed IRA Topic: Tax Liens, Notes, Paper, & Cash Flows Discussion Topic: Tempe Real Estate Forum Topic: Tenant Screening Topic: Tennessee Real Estate Q&A Discussion Forum Topic: Texas Real Estate Q&A Discussion Forum Topic: Thornton Real Estate Forum Topic: Toledo Real Estate Forum Topic: Topeka Real Estate Forum Topic: Tucson Real Estate Forum Topic: Tulsa Real Estate Forum Topic: Tuscaloosa Real Estate Forum Topic: Upstate New York Real Estate Forum Topic: Utah Real Estate Q&A Discussion Forum Topic: Vancouver Real Estate Forum Topic: Vermont Real Estate Q&A Discussion Forum Topic: Virginia Beach Real Estate Forum Topic: Virginia Real Estate Q&A Discussion Forum Topic: Waipahu Real Estate Forum Topic: Waipahu Real Estate Forum Topic: Warren Real Estate Forum Topic: Warwick Real Estate Forum Topic: Washington D.C. Real Estate Q&A Discussion Forum Topic: Washington Real Estate Q&A Discussion Forum Topic: Waterbury Real Estate Forum Topic: Westchester County Real Estate Forum Topic: Western NC Real Estate Forum Topic: West Gulfport Real Estate Forum Topic: West Virginia Real Estate Q&A Discussion Forum Topic: Wichita Real Estate Forum Topic: Wilkes Barre Scranton Real Estate Forum Topic: Wilmington Real Estate Forum Topic: Wisconsin Real Estate Q&A Discussion Forum Topic: Worcester Real Estate Forum Topic: Wyoming Real Estate Q&A Discussion Forum Topic: Yukon Real Estate Forum
Create post

Early PM contract termination

12 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Analyze Deals, Residential, and Taxes & Accounting
  • Posts 261
  • Votes 97

Simon Stahl
Rental Property Investor from Oakland, CA

posted about 1 year ago

I have a triplex in San Antonio, TX that is managed by a PM. There are still a few month left until the PM agreement ends, but I am pretty unhappy with their services and would like to get a new PM before that time. There is a clause saying that I have to pay them for each rented unit at the time that I switch, but that is after it has expired. Anyone has an idea about the implications of me terminating earlier? Nothing is mentioned about that in the agreement.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Analyze Deals, and Real Estate Finance
  • Posts 11K
  • Votes 16K

Nathan G. (Moderator) -
Real Estate Broker from Cody, WY

replied about 1 year ago
Originally posted by @Simon Stahl :

I have a triplex in San Antonio, TX that is managed by a PM. There are still a few month left until the PM agreement ends, but I am pretty unhappy with their services and would like to get a new PM before that time. There is a clause saying that I have to pay them for each rented unit at the time that I switch, but that is after it has expired. Anyone has an idea about the implications of me terminating earlier? Nothing is mentioned about that in the agreement.

I would have to read the actual agreement to answer your question fully.

They can't charge you a termination fee after the management agreement has already terminated. My guess you've read it wrong. What they most likely said is that if you terminate three months early, then you will still have to pay three months of management fees.

NOTE: if they have somehow violated the agreement or failed to perform, you should be able to terminate without penalty. If you're just unhappy with them because they don't communicate as well as you would like or don't do things the way you would, then you may be subject to the termination fees.

Here's what I recommend:

1. Talk to your current PM. Tell them you are unhappy and that you intend to leave when the contract is up. Don't say a lot. just tell them you are unhappy with their service and would like to terminate without penalty. See if they'll accept that or negotiate a lesser penalty.

2. If they refuse to let you go without penalty, confirm that the agreement terminates in three months and that there will be no penalty for failing to renew. If they tell you there will still be a penalty, go to step 3.

3. Contact the Texas Real Estate Commission and explain your situation. They can probably advise you on whether a termination fee is legal and, if not, may be able to put pressure on the PM to let you go.

In the meantime, you need to start looking for a new property manager. I can personally recommend RentWerx or Liberty Management.

Remember: cheaper doesn't mean you'll make more money.

You can start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. Regardless of how you find them, try to interview at least three managers

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 1.7K
  • Votes 1.2K

Guy Gimenez
Investor from Corpus Christi, TX

replied about 1 year ago
The best place to get legal advice for a legal document (not included in the post) is legal counsel.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Finding & Screening Tenants
  • Posts 23K
  • Votes 15K

James Wise
Real Estate Broker from Cleveland, OH

replied about 1 year ago
Originally posted by @Simon Stahl :

I have a triplex in San Antonio, TX that is managed by a PM. There are still a few month left until the PM agreement ends, but I am pretty unhappy with their services and would like to get a new PM before that time. There is a clause saying that I have to pay them for each rented unit at the time that I switch, but that is after it has expired. Anyone has an idea about the implications of me terminating earlier? Nothing is mentioned about that in the agreement.

 I would assume you are misinterpreting it. Likely that you'd need to keep paying them the agreed upon monthly PM fee for each of the units until the contract expires. So if you were to cancel it 6 months early you'd get hit with 6 months of PM charges on the way out.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Analyze Deals, Residential, and Taxes & Accounting
  • Posts 261
  • Votes 97

Simon Stahl
Rental Property Investor from Oakland, CA

replied about 1 year ago

@Nathan G. Wow, thanks a lot for that wealth of information. I actually already talked to Rentwerx and also looked at Liberty. Both have minimum monthly payments of around $120 per unit. My units are small 1/1s and are not in the best area, so rents are too low for such a PM fee. I've already talked to others as well though and found one that would work and is listed on the NARPM page. Btw, the current PM is not really breaking the agreement, they just really suck at their job. I am not informed about tenants vacating units, 2 of the 3 units are empty for the last 2 month and they are not even rent ready yet. We ended up having squatters in one unit because a window AC got stolen and they did not close the hole. I keep on asking for pictures of repairs, but never get any. They cannot tell me what repairs they did just a year ago. And so on and so on.

@Nathan and @James Wise I don't think that I misinterpret that. See the exact wording below. They want at least $500 per unit if it is rented after the agreement ends.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Finding & Screening Tenants
  • Posts 23K
  • Votes 15K

James Wise
Real Estate Broker from Cleveland, OH

replied about 1 year ago
Originally posted by @Simon Stahl :

@Nathan G. Wow, thanks a lot for that wealth of information. I actually already talked to Rentwerx and also looked at Liberty. Both have minimum monthly payments of around $120 per unit. My units are small 1/1s and are not in the best area, so rents are too low for such a PM fee. I've already talked to others as well though and found one that would work and is listed on the NARPM page. Btw, the current PM is not really breaking the agreement, they just really suck at their job. I am not informed about tenants vacating units, 2 of the 3 units are empty for the last 2 month and they are not even rent ready yet. We ended up having squatters in one unit because a window AC got stolen and they did not close the hole. I keep on asking for pictures of repairs, but never get any. They cannot tell me what repairs they did just a year ago. And so on and so on.

@Nathan and @James Wise I don't think that I misinterpret that. See the exact wording below. They want at least $500 per unit if it is rented after the agreement ends.

 Looks like the agreement you've agreed to has you paying that amount whenever you end the relationship with the PM. So given that you said you wanted to get a new PM and there isn't an additional early termination fee I see no reason why you'd need to wait to cancel your agreement with them. Looks like you're gonna pay the same today as you're gonna pay when it expires.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 813
  • Votes 543

Michael King
Rental Property Investor from St. Louis, MO

replied about 1 year ago

So if your property is tenanted when you terminate the agreement with the PM, you are on the hook for at least $500?  Per door? Wow what scumbags. On principle, I'd wait and kick the tenants out. Remember, it said "leased to a tenant".

So my strategy would be like said, not renew the tenant's lease and terminate the agreement (no fee that I see). Before or during the tenant's notice that you're not re signing the lease, have your new PM (or you) sign them to a lease for one of your other properties. 

You don't lose a tenant this way, and you don't pay above and beyond what you are already getting screwed for. 

Follow it up with a factual review on yelp, google, etc etc. 

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Analyze Deals, Residential, and Taxes & Accounting
  • Posts 261
  • Votes 97

Simon Stahl
Rental Property Investor from Oakland, CA

replied about 1 year ago

Yup, $500 per door. I unfortunately didn't pay enough attention to the details when I signed. The thing is that 2 of the 3 units are empty right now, so it would be a great moment to switch. Sounds like if the agreement does not mention anything about an early termination fee, then I should be good. That is mostly why I asked here. 

Thanks everyone for the input. I appreciate it.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Analyze Deals, and Real Estate Finance
  • Posts 11K
  • Votes 16K

Nathan G. (Moderator) -
Real Estate Broker from Cody, WY

replied about 1 year ago
Originally posted by @Simon Stahl :

Yup, $500 per door. I unfortunately didn't pay enough attention to the details when I signed.

I would file a complaint. If your contract naturally terminates on a certain date, I don't think they can make you pay management fees for leases extending beyond that date.

i would file a complaint with the Texas commission. These are state-developed firms and they should be able to guide you. I would also write down any potential violation of the contract between you and the property manager, collecting ammunition for a complaint of violation which should be grounds for termination without penalty.

 

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Team and Flipping
  • Posts 1.1K
  • Votes 892

Michael Ablan
Real Estate Broker from Watertown, NY

replied about 1 year ago

@Simon Stahl - Are they failing to meet their obligations under the terms of the contract?  If so, then you need to have that conversation with them and then give them an in writing request to re mediate within a certain period of time.  If they fail to do so, then you would have a case to break the contract due to their failure to meet their obligations under the contractual agreement you two entered into.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Flipping and Analyze Deals
  • Posts 274
  • Votes 67

Adrian Fajardo
Rental Property Investor from Killeen, TX

replied about 1 year ago

@Simon Stahl I'm in the same boat as you. I'm shopping around for PM in the Killeen area and I found 2 of the contracts that have these fees. 

@Nathan G. Thank you for bringing those questions up. I first asked each PM to send me their Terms of Agreement and prepped my questions. I'll add all of yours to my telephone interview! I find them very helpful! 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 20
  • Votes 6

Curtis Lewis
Rental Property Investor from Dededo, GU

replied about 1 year ago

I have that same clause and I have seen over 5 contracts and they all have them. I spoke with the PM about it and they all say it is if I decide to "terminate" the agreement, not if it naturally is fulfilled... They are claiming fulfilment and termination are different... 

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Analyze Deals, Residential, and Taxes & Accounting
  • Posts 261
  • Votes 97

Simon Stahl
Rental Property Investor from Oakland, CA

replied about 1 year ago

In my case it unfortunately specifically says that the fees are due when the agreement ends and I was stupid enough to sign it. At least I've learned something.

I think I will just call the Texas commission to see if there is anything that I can do about it. But I guess if I want to terminate early, then I will have to pay them anyways.

Rotate Log in or sign up to reply
  • 1
Related Resources General Landlording & Rental Properties
Have Top-Notch Tenants? Here’s How to Keep Them
5 Essential Property Maintenance Tasks To Keep Your Rental in Tip-Top Shape
Rental Arbitrage: The Secret to Making a Fortune on Airbnb Without Owning Property
8 Reasons the Best Landlords Always E-Sign Rental Agreements
6 Tips for Listing Your Rental Property Online
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Nathan G.
Nathan G.
Cody, WY
9.76
Score
Supada L.
Supada L.
8.16
Score
Bjorn Ahlblad
Bjorn Ahlblad
Shelton, WA
6.32
Score
Joe Villeneuve
Joe Villeneuve
Plymouth, MI
6.21
Score
Joe Splitrock
Joe Splitrock
Sioux Falls, SD
6.16
Score

General Landlording & Rental Properties Trending Discussions

  • Raising Rent: Good idea or bad business practice
    19 Replies
  • POLL: Rent delinquencies, January 2021.
    13 Replies
  • Tenants moving out, want refund of sec deposit on moving out
    12 Replies
  • Bank Accounts for Multiple Properties
    39 Replies
  • Property Manager in Chicago
    9 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

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

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.