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Updated 1 day ago on . Most recent reply

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Mahmuda L.
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What is a standard early termination fee

Mahmuda L.
Posted

My management company is charging me one month’s rent plus management fees for the remaining six months after I informed them I need to terminate the contract early. My family will be living in the house. I have been with the company since 2022. They are now demanding nearly $2,800 for termination, despite there being no early termination fee in the contract. They claim this is a standard fee. 

The property was listed for rent after our previous tenant gave a 90-day notice, and they advertised for three months. After significantly lowering the rent, they received one application, which I rejected. Now, they are asserting that because I want to end the contract, they are owed one month’s fee plus six months of management fees. 

I want to know how others handle similar situations. The management contract states it can be ended for cause, and my reason is that the house will be the owner's primary residence, but they claim this is not a valid cause. What should I negotiate?

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Drew Sygit
#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
5,870
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Drew Sygit
#2 Managing Your Property Contributor
  • Property Manager
  • Royal Oak, MI
Replied

"Ended for cause" typically implies that you have to prove the PMC did something wrong or you are facing financial hardship.

Don't believe that?

Go look up all the new legislation being passed in multiple states/cities, requiring landlords to prove, "just cause" to NOT renew a tenant's lease or face penalties!

This is no different.

Suggest you really study your management contract termination language in general and not just assume that because nothing is labeled, "early termination" that no termination fees apply.

If there are truly ZERO termination penalties then they may not legally be able to collect what they are asking for.

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