I'm going to purchase my first multifamily property and learned that the seller currently has a contract with a property management company that expires in 1 year. This is an issue because as a newbie I want to learn how to manage the property myself as I will be occupying a unit. When I went to view the property, tenants were already complaining about issues reported to PM that had not been addressed so I'm definitely trying to take on a bill for a under performing service, when I believe in my ability to do things myself.
With all that being said, I want to end the contract and want to know if it is my responsibility to pay for the cancellation fees or should the seller pay for cancellation since the contract is with the seller, not me? At this point I don't even know what the fee will be, but I know there is one.
@Danielle J. I would think that the seller would have to pay the fee. I don't see how you can be held responsible for a contract you were never a part of. If it were one of my sellers, I would just let them out with no fee, but I'm probably too nice for my own good :)
@Dawn Brenengen yes girl you probably are too nice because these folks out here in Cali want all their coins lol. I am hoping the seller will handle this matter. I know if it were my contract I would take full responsibility for it, but it's not :)
I would think the seller would be responsible but I would also think that the management contract would be null and void if the property sold.
Here in AZ a Mgmnt contract can usually be cancelled with 30 day notice and I believe a sale would void the contract.
This would be lovely if it's null and void @Dick Rosen I will find out the nature of the contract and whether or not there are fees within a few days..
I would probably talk to an attorney, realtor or even title company. i have a feeling it follows the house, just like a lease does with a tenant UNLESS it says other wise in the contract. I know when I worked for large (300+) apartmetn complex we always took out the language obligating the next party. If we didn't than the next party was required to take over the responsibility.
Elizabeth C. Honestly my gut tells me it follows the home especially based on the vibe I got from listing agent.
@Danielle J. normally the new buyer is bound by existing contracts on the real property if it has been disclosed prior to the sale. Part of your due diligence should have been a thorough reading of that contract and an evaluation of your rights under it. I would talk to the management company anyway before cancelling anything to get their side of the story. Maybe the prior owner would not agree to pay for the repair.
Update: the seller was able to cancel her PM contract without any cancellation penalty. Glad I didn't have to deal with that!
For what it's worth, I don't think you are "too nice" because you would let someone out in a situation like this. I think it makes you credible and it is simply good business. RE is a relationship business and such actions will pay off in the long run.
Agreed, @Andrew S. . I prefer for my clients to work with me because they want to, not because they are stuck with me!
@Dawn Brenengen agreed! It's better to give people choices and room for flexibility.
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