Maybe you thought that the expertise of a property management company would help you run your properties more smoothly and allow you to expand your business, but things didn't work out as planned.
Now you want to end your contract before the proposed date, but are wondering how, and even if it is possible at all.
Terminating a property management contract can be a tricky situation, but if you are not getting the results that you think you should be, stop spending money on the service as soon as possible.
Give Notice of Termination
Unless the property management company has made an obvious breach of contract, which would allow you to cancel their services immediately, you need to give them at least 30 days notice that you are bailing out.
You also need to make the notice in writing, stating the specific reasons why you no longer want to hire them, even if they're not ones that are stated explicitly in the contract as reasons to break it.
While reputable property management companies should offer a "satisfaction guarantee", some will want to be sticklers with the legalese, which means you will need to take further steps to break the contract.
If you have given them a deposit, this can be even more difficult.
Pay the Fee
Many property management companies charge fees of several hundred dollars when you cancel a contract before it has expired.
This money is used to pay for whatever costs, including extra employees or equipment the company had to invest into service your properties.
In most cases, the exact fee amount will be stated clearly in your contract, although it can also be a variable amount or a percentage of your overall yearly charge.
If you signed the contract, then you must pay the fee in order to terminate the agreement, unless your main reason for dropping their services is a specific contract-breaching action by the property management company.
Notify Your Tenants
When terminating a property management company, you need to let your tenants know what is happening, and whether there will be a replacement or not.
Sometimes the fact that a property management company is used to maintain the rental is a positive factor in the tenant's decision to lease your housing option or pay the required rent.
The termination of these services may amount to a change of the rental agreement in the mind of a tenant.
Ask For Copies of All Records
Before completely parting ways, ask the property management company for copies of all of the paperwork that they handled for you so that you have them in your records.
Also obtain a copy of your agreement with them and the paperwork that accompanies the termination of your agreement.
Watch Out For Automatic Renewals
Think you are done with your property management company just because the length of time stipulated in the contract has run out?
Not so fast.
Many companies have automatic renewal clauses which mean that unless you notify them in writing of your cancellation, your contract continues for another set length of time.
When terminating your contract with the company, even if the contract is over naturally, give notice in writing and keep copies of all paperwork involved.
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