Property Manager Charging Unfair Termination Fee After Poor Service – Advice Needed

[Caroline Na]

Hi Everyone,

I’m a landlord in Texas and terminated my property management agreement with a management company after the one-year term ended and it went month-to-month. I gave proper 30-day notice, but they’re now demanding an $800 termination fee, citing a clause that charges management fees for the rest of the tenant’s lease.

The contract technically allows it casue it's unclear whether the penalty defined for the primary term is applicable for the month-month renewal stage, but it seems like a bad-faith trap — basically forcing me to keep paying as long as the tenant stays , even after the primary agreement ended. 

I’m planning to file a TREC complaint, but has anyone dealt with similar termination fee abuse?

Would love to hear how others handled this — or if it’s worth taking to small claims court.

Here is the details of the penalty term:

If the property is leased to a tenant on the date this agreement ends, and the owner terminates the agreement (for any reason), then the owner agrees to pay the broker the greater of:

• The management fees that would accrue over the remainder of the tenant’s lease,
  OR

• A flat fee of $500.

[Drew Sygit]

@Caleb Brown & @Theresa Harris the management contract went MTM, not the lease.

@Caroline Na you should really go over the management contract to see if there is an excemption for the poor service reason you're terminating them for.

Otherwise, if you signed the contract, then you have to abide by it.