What is a standard early termination fee

Question

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?

Drew Sygit · Answer

"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.

Jennifer Hoyer · Answer

Some contracts don't get into the nitty gritty which opens up the door for negotiation. If the contract doesn't state a termination policy, then you shouldn't have to pay as they have no basis for stating it's "their policy". As a property manager, depending on how qualified the applicant you rejected was, they could say that they found a viable tenant to justify the marketing fee be owed.

Russell Brazil · Answer

If its not in the contract, then dont pay it. If they charge it to you, let them know youll be reporting their illegal charge to the state authority that oversees property managers.

Adam Bartomeo · Answer

We charge $500 per unit. A lot of companies charge the commission for the remainder of the property management agreement.

Brittany Stradling · Answer

Echoing another user - it's what the contract states. If the contract says you can terminated with no fees because you are the primary resident, then you can. The negotiation stage is over as you hold no power. The time to negotiate was prior to signed the contract.

Peter Mckernan · Answer

This was posted by something else (the same thing basically). It really comes down to what the contract says and what you signed too.

What is a standard early termination fee

What is a standard early termination fee

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