How to terminate your contract with a property management company?

terminating contract

 

Do all property managers deliver similar results? Certainly No!

When you hire property managers, you must focus on many factors. Even when you are careful about whom you hire, mistakes can happen. Many landlords are unsatisfied with the results produced by property management companies. This is when they end contracts and move on. “Termination” is an important clause in any agreement. The agreement signed between the landlord and the property management company must have a termination clause. Don’t sign the agreement without a termination section.

In addition to the termination clause, you must stick to few do’s and don’ts of termination.

#1 Always give Time and Notice

Contracts cannot be terminated overnight. If you decide to terminate a contract overnight, you will pay hefty charges. According to management contracts, you must give some time and notice to the company. In general, the notice period ranges between 30 and 90 days. When you decide to terminate the contract, you must have this window. Else, your termination request will not be taken into consideration. Many property managers consider this as a breach of the contract. You will be asked to pay a huge fine or involved in a lawsuit.

To avoid such problems, you must give proper notice.

#2 All the Discussions Must be in Writing

Termination should not be done by word! Instead, you should document the decision. Everything about your contract should be documented. The moment you want to cancel a contract, write it to the property management company. This document should be both simple and to the point. If you are unable to draft a professional document, approach an attorney. A professional attorney can help you write a “perfect” notification letter. They will make sure the right concerns are raised and recorded.

This document should have an effective termination date included.

#3 You cannot terminate without a clause

As mentioned previously, your agreement plays a very important role. In fact, you cannot terminate if the agreement doesn’t have a clause.

The moment you decide to sign an agreement, look for the termination clause! As funny as it sounds, this clause can save you from lots of trouble. One, the clause should be properly spelled. Two, nothing should be missed in this clause. It must talk about everything: security deposit, duration, special cases, and services. According to state regulations, the property management company must not have any security deposit after termination. If the property manager holds back your money, you can always raise a case.

#4 All Costs Involved Must be Resolved

Property management companies are expensive organizations. They don’t offer their services for free. Even when you terminate the contract, they are likely to ask for money! This is when the contract termination clause becomes useful. This clause defines if the landlord must pay money to the property manager, especially when proper notice is given. Some property managers will ask for a fee on all scenarios. This fee will be few hundreds of dollars. But, the final value depends on the property manager.

#5 Change in Management? Should the Tenants be informed?

Property management companies have many roles and responsibilities. When you sign the initial contract, you will agree on a set of terms and conditions. Apart from the landlord, tenants play a crucial role in the agreement. After all, property managers are expected to manage tenants. This is why you should inform tenants about the termination. They should be aware of why and when the change would happen. In case the tenant has given their security deposits to the property manager, the funds must be handled accordingly. The best way to inform is through word and writing.

#6 Did you notice breaching? If yes, terminate!

If the property manager has breached the initial contract, you must terminate immediately! Don’t let the property management company handle your assets anymore. To feel secure, approach an attorney and ask for advice. A real estate attorney can help you handle the situation. They will ensure if your property is intact and no funds are lost.

#7 Give some time for settling money and documents!

When you terminate a contract with the property management company, you will be eligible for knowledge- and fund- transfer.

Landlords must give reasonable time to the property management company. The property manager must have adequate time to transfer funds and gather documents. Don’t be in a hurry! At all times, ensure if the documents and funds are correct.

Terminating contracts is a big move! Never take it personally. Keep the outcome and your experience professional.