How do I get rid of a bad property manager

Question

Hello,

I have been in the rental business of and on since the 90s and now own more than 10 SFR rentals in 5 states with a yearly net income in the low six figures. So I consider myself pretty experienced/knowledgable at being an out of state landlord. But all too often this means that I need to fire another property manager (this time in Alabama). I am pretty careful at hiring PMs (unfortunately I've needed to fire quit a few over the years) though in some markets there are only so many PMs to choose from so my options were limited.

The PM that I hired in AL did a really nice job when I first hired them in 2022 to manage 2 houses (I am very glad that they only manage 2). The problem is that they've going downhill ever since (this has happened to me a lot with PMs the last time in Charlotte). In this business tenant screening is everything and they seem to rent to anyone with a pulse. Consequently I have one house vacant after the tenant left in the middle of Nov (without paying Nov rent) and the other house has only paid half the Dec rent (and it's now Dec 20). I have had candid discussions with the PM where I tell they need to improve their screening process because I not have these issues in other states and they excuse this by saying that bad tenants are unavoidable in the AL market (which seems like BS to me). Their communication with me has been terrible for the last 2 years now - they will ignore my texts for more than a week at at time (and I usually contact my PMs if I their is a problem I do not bother them when they are doing their job).

I've expressed my displeasure with the PMs performance with the co owner multiple times and clearly stated that I did not want to continue to do business with them because of their lack of communication and failure to screen tenants properly. The co owner's response was that the big corporate landlords had been poaching all their people so they are short staffed but they will hire good replacements. All PMs have a contract but whenever I've had this discussion the PM will usually let me out of the contract without any penalties (a lot of PMs have their self respect and do not want to work with an owner who does not want to work with them). Additionally most of the PMs that I talked to do not want to take on new properties unless the tenants have paid all their rent (and my AL PM rents to dirtbags so this is not the case). A year ago I posted a negative review online about their performance which upset the PM but he did improve a little so I raised it from one star to three.

My vacant property has been on Zillow for a few weeks now but I had zero feedback from the PM. After several tries I finally reached the current rep and asks her how many times the PM has showed my property. Instead of giving me a straight answer she replied that Dec is a slow month. I explained to her that I've been in this business for 30 years and I know that Dec is slow but I still expect to know how many times the PM showed the property. I asked her how many years she's been in this business and she said 10 months (from the way she talked I think they literally hired her from McDonalds). Then she cut our conversation short because she had to talk to someone else.

Yesterday I had someone go my vacant property on Zillow and request a showing. Not surprisingly that person has not received a response yet. I may have another person or two also request a showing on Zillow to document how the PM is not doing their job in case this goes to court.

So what's the best way to get rid of this PM? Has anyone sued a PM to break a contract (or been sued by a PM for breaking it)? Every PM contract states that the PM has an obligation to show the property to tenants so didn't they break the contract by not responding to the Zillow inquiries to show the property? It seems like a legal question.

I am considering downgrading my online review of the PM to 1 (which seems fair since it should be -10). On the one hand the prospect of this might give me leverage but on the other hand it will anger the PM and I will need to be very careful that I have proof for everything that I say so that I don't get sued over it (it's sad that I can't warn other landlords about this PM by telling the truth without having to worry about getting sued but that how things are).

Thank you in advance for your suggestions.

David

James Wise · Answer

I suggest you stop acting like a child. If you are unhappy with the performance, grow a set and terminate the contract with the PM. Hire a new one and move on. This is your business, not a relationship with your girlfriend. Act like a business owner.

Denise Evans · Answer

In Alabama, you must have a real estate license to manage a SFR. Send the PM a letter outlining their failure to represent you properly according to your contract and the requirements of Alabama license law. Request they terminate the contract without penalty. If they refuse, then terminate anyway and file a grievance with the Alabama Real Estate Commission. At a minimum, they will probably require restitution via refund of your termination fee.

Steve K. · Answer

I would sell and buy in a better location. You’ll find both the quality of tenant and quality of available PM companies much better in a better location. This is why bad locations often look good on paper but end up being cashflow negative.

Dan H. · Answer

If you can document the PM deficiencies, fire them for cause. Note simply not responding in a timely manner qualifies as cause as that is a primary PM responsibility.

One unit is empty. Serve the other tenant for eviction for missed payment.

Start over with a new PM and let them place the tenants. This way they have full responsibility.

If the PM sues you for you firing them (very unlikely if you have multiple documented issues - by the way I fired a pm once for simply not responding to me in a timely manner repeatedly. They are a national PM with a horrendous reputation. They threatened to sue, I basically said I would look forward to it. They did not sue. If they sued and lost, it would be posted on every social media platform their deficiencies that were proved in court.).

I do not cower with the threat of lawsuit. They are bogus threats. I get a threat of being sued semi regularly. I have yet to be sued over anything RE related.

Good luck

Denise Supplee · Answer

Hello @David L.

It is true that most PM contracts have early termination penalties, however, there may be conditions listed as just cause for termination. And either way, there will be terms and if either party breaches these terms, the non-breaching party may terminate the agreement with written notification.

First, it is important to go through your agreement and check for all said conditions.

Secondly, If there is a breach, make sure ALL occurences are documented and all communication documented as well.

Last, Send notification of cancelation. Stop all payments. This may mean to reach out directly to your renters and have them change you as the payee for rent going forward.

Now, this could mean they may take you to court. And each state also has its own laws. So, be sure you also contact a legal professional (they even have online experts that will review your contract for less the cost).

Please know, I am not an attorney. Just been there done that. And this is precisely why I now only invest passively in real estate.

Good luck to you and I wish you the best!

Deni

David L. · Answer

I wish it was that simple. These contracts are expensive to terminate unless you terminate it before the annual renewal date. Also most of the prospective new PMs do not want to take over when the tenants are not paying (as is the case on one of these properties).

Drew Sygit · Answer

What Class are these properties - A, B, C, or D?

Doubt they're A, and if you're having the tenant challenges you mentioned that leads me to believe they're Class C.

What quality of managmenet and tenants do you expect for Class C properties?

Before you fire this PMC, you may want to look for a BETTER alternative- IF you can find one.

Not sure what your PMC screening process is, but you obviously need to do a better job at it.

James Wise · Answer

For a guy who's been in the business 30 odd years you sound like you're clueless.

You think suing the PM because some rando said they didn't respond to their Zillow inquiry yesterday is cheaper and or makes more sense thean paying the termination fee you agreed to?

You're crying that they rent to anyone. How do you know that the reason they didn't reach out to your Zillow lead is because they dont think they'd be a good tenant?

Have you ever actually been involved in a lawsuit? You are looking at 10's of thousands in attorney fees for a nonsensical muddy argument that won't go anywhere.

Act like an adult business owner for Christ's sake man. Pay your contract term fee and move on if you dont like working with them. It's prolly like $1,000.

Account Closed · Answer

After 30 years and properties across multiple states, you’ve probably already identified the real issue: this sounds less like a bad month and more like a breakdown in operations and accountability.

If I were in your position, I’d focus first on the management agreement. Most contracts have termination clauses, notice requirements, and performance obligations. Before thinking about a lawsuit, I’d document everything:

• Unanswered communications• Delayed responses to prospective tenants• Vacancy timelines• Rent collection issues• Any written promises regarding leasing activity• Screenshots and records of showing requests that went unanswered

The bigger concern to me isn’t even the delinquent tenants—it’s the lack of communication and inability to provide basic leasing metrics. A property manager should be able to quickly tell you how many inquiries, showings, applications, and qualified prospects a property has generated.

Personally, I’d start interviewing replacement PMs immediately and ask whether they’ll take over properties with existing tenant issues. Some won’t, but many will if they understand the situation upfront.

As for online reviews, I’d be cautious about using them as leverage. I’d focus on getting control of the assets first and then leave a factual review supported by documentation after everything is resolved.

One lesson I’ve learned is that the cheapest way to handle a bad PM is usually to replace them quickly. A few months of poor tenant placement, weak collections, and extended vacancies can cost far more than any termination fee.

Curious what the management agreement says regarding termination without cause and what notice period they require. That language will likely determine your easiest path forward.

Amit Patel · Answer

Hey David,

The cleanest way to move on is to send them a formal written termination notice exactly as outlined in your management contract. Most agreements in Alabama allow either party to terminate with thirty days written notice. Keep the letter professional and to the point. Make sure you document everything including the ignored Zillow inquiries and lack of showings and request all keys tenant files and security deposits in writing.

I would be very careful about updating or lowering your online review. Stick strictly to facts if you decide to do it.

If you need at any point a PM in Ilinois, we'll be happy to help and chat.

How do I get rid of a bad property manager

How do I get rid of a bad property manager

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