Getting out of a Management Agreement w/ Horrible Client

Getting out of a Management Agreement w/ Horrible Client

Chicago, IL · Member since 2015 · 414 posts · 94 votes

I had to give 30 days' notice per our management agreement to a client I have 13 units with on Friday after having to hang up the phone on him Thursday afternoon and telling him if he ever speaks to me that way, it will be our last conversation. Well he did it again the next day, so I blocked his number. He's been bombarding me with emails with everyone he can think of CC'd all day saying how he's going to sue me for everything under the sun and accusing me of all kinds of made up nonsense. I have actual work to do and don't need 30 days of this.

He never paid me the expense deposit in my management agreement and I never pushed on it because I'm always holding enough of his rent at any given time for it not to matter. I did hold onto $2,500 of his that was going to be a cash-for-keys deal that fell through and he acknowledged this. That's still $1,300 short though. I told him he has 24 hours to send me the remainder as I'm not floating a dollar for him given the state of the relationship. He accused me of stealing and said he needs proof that he did not pay the deposit. That's not how proof works.

Am I legally in the right to cancel the contract for breach of contract in a day as soon as I get this last lease-up fee if he doesn't pay the deposit?

This is really disappointing. I'm his 4th PM in 3 years and they all fired him. I knew this would be a project and so did he. I took on 4 buildings - 2 of which were highly distressed. They are all doing so much better than they were. Rents went up on all renewals. All new tenants placed have worked out great. 2 of the properties are in the hood and had tenants who weren't paying. He insisted on micromanaging them and communicating with them himself, put them on "payment plans" that resulted in them getting even further behind, ignored my suggestions to serve 5-days, then looked at his account one day and realized just how far behind they were and that they would need to be evicted (we've already been through one - a few of them I was able to get on track), and blew up blaming everyone but himself. I won't be another grown man's emotional punching bag for any amount of money. The kicker is he now realizes he's out of options and is emailing me that he's going to "win be back" and "convince me to stay" like this is some high school romance. It's disappointing because we've put a lot of work into these buildings and we were so close to the finish line of them being stabilized and would have been there already if he wasn't such a meddler.

I've watched this guy use the same tactic of trying to threaten and intimidate delinquent and outgoing tenants with zero success and he never follows through. This guy is a kidney surgeon. I have reams of texts and emails of him saying wildly inappropriate and racist ****. Part of me just doesn't want to deal with him anymore. He's bad for my blood pressure. I've never lost sleep over a client before and the fact that I have now makes me mad. And the other part of me just wants to leave him hanging as thoroughly as possible. I am very much not a forgive and forget kind of guy and I like that about myself.

Last 2 paragraphs are just a vent. Question is in bold. Thanks for coming to my Ted Talk.

And yes I'm asking lawyers too.

0Reply
29 views

Most Popular Reply

Peter TverdovBusiness Member
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
2y

Sorry to hear you're going through that. For some reason people treat PMs like slaves sometimes. I don't understand it. We have been churning out a lot of bad clients the last 18 months. None that we lost I have been upset over. This business is hard enough, if you're not rowing in the same direction just cut bait and move on. 

Also learn to do a better job of screening them. Its not impressive me to have a bunch of doors that are slums with bad owners. Quality over quantity. Focus on revenue per door, not door count. 

See this reply in the discussion

3 Replies

Jump to latestLatest
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Art M.:

    I don't know what your contract says, but you should have the right to terminate if their is a breach in the agreement. He agreed to pay an expense deposit and didn't, so that's a breach. I also know of no legal requirement to work with someone that is abusive.

    I wouldn't spend any money on an attorney, but that's because I'm confident in my skills. I definitely agree with you firing them. Make sure all your documentation is in order in case he decides to sue (unlikely) or file a complaint with the state.

    Once you get rid of him, it may be worth eating the $1,300 shortage just to be done with the guy. Again, I would take him to small claims because I document everything and know it would be worth my time. Your mileage may vary.

    The DIY Landlord Book4.7247 Reviews
  • Attorney · Pensacola, FL · Member since 2023 · 178 posts · 106 votes
    2y

    It depends on the terms of your agreement. What do the termination provisions say?

  • Peter TverdovBusiness Member
    Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
    2y

    Sorry to hear you're going through that. For some reason people treat PMs like slaves sometimes. I don't understand it. We have been churning out a lot of bad clients the last 18 months. None that we lost I have been upset over. This business is hard enough, if you're not rowing in the same direction just cut bait and move on. 

    Also learn to do a better job of screening them. Its not impressive me to have a bunch of doors that are slums with bad owners. Quality over quantity. Focus on revenue per door, not door count. 

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