Taking over management after my PM terminated our relationship

[Ryan Cleary]

I plan on selling the first rental property I purchased in 2020 (Palm Beach County) to 1030 into a nicer area.   I am very loyal to a realtor I met here on bigger pockets and since the PM I was using is a "full service" company, he is charging me a $500 early termination fee (I have used him over 1.5 years) and dropping his services since I won't use him to list the house.  The termination is amicable, I understand he would be taking on extra work as a PM and not benefitting from any listing commission.

These are my concerns:

-Is it normal for management companies to drop you as a client during a sale?  If so what about a $500 fee?

-Is there anything I should be aware of during the transition?  (Deposits, ledgers, etc)  I have never self-managed before and since I look like I am a toddler, I have never told the tenants I am the owner.

With any luck I will only be self-managing for less than two months

[Jay Hinrichs]

Quote from @Nathan Gesner:

Quote from @Ryan Cleary:

This is absolutely reasonable, particularly if it's explained in the lease. I'm a property manager and do the same thing.

When you list the home for sale through another brokerage, additional work is required to coordinate entry by the REALTOR, other REALTORS that want to show the home, the home inspector, vendors, and appraisers. These extra tasks are related to the sale of the home, not property management. It's outside the scope of what you hired the property manager to do and it's unreasonable to expect him to take on this extra work and then hand all the commission to your sales agent.

My PM Agreement gives the Landlord three options:

1. Sell through my office and we'll take on the extra work as part of the sale;

2. Sell through another office and pay me $500 to compensate me for the additional work involved;

3. Terminate management with me, then list the home with another brokerage after we've terminated.

Imagine you hire a painter to paint the interior of your home. He calculates his time and materials, bids the job, and you hire him to start on Monday. He shows up on the third day and finds you have someone else installing new flooring. The flooring guys get in his way, keep moving his ladder when he's not in the room, remove some of his tape, etc. The painter's job is more difficult because you've changed the situation, and he should be compensated for the additional work required to complete the job.

selling a house with a tenant in it is very difficult.  WE always wait to market the house until the tenant leaves.