How to Replace Property Managers in VA

[John Lawrence]

Hey all,

I have two properties in the Hampton Roads, Virginia area and they have been managed by the same company for many years.  It's a very small company, and I've just really never had a great relationship with them.  Being that I'm a long distance owner, I can't just stop by the office and talk to them, but communications with them are unreliable at best.  E-mails go unanswered, responses are vague when they come, and they just don't have the energy I need to feel comfortable that they are looking out for me.  They don't have the best manager portal, and I don't even think their accounting manager is very good at her job either.  The broker sent me a new management agreement recently because he didn't know the agent he had working with me had already signed one earlier in the year.  The new contract gave me the feeling that the entire point of the agreement was to protect him and his business against me, the owner.  Nothing in it felt good, so fortunately I was able to send him the previously signed agreement that was much more amicable to both parties.

All that said, it's created a learning situation for me over the years because I've had to constantly harass and poke them when things didn't make sense or I didn't understand what they did.

I have been an unskilled investor and am finally taking control of everything and pouring tons of energy in to fixing the issues I have so I can make better deals moving forward, but I think one of the things I need to address is this property management company.  How does one fire a company and hire a new one?  Is it a lengthy process or a fairly smooth transition?  I'm on a management contract for one property through February 2019, and I'm not sure about the other property but I may just be in an at will agreement at this point.

Any advise or recommendations would be appreciated, as well as any leads for great property managers with good communication skills and financial practices would be awesome.  Thank you!

John

[Patti Robertson]

As a PM I'll share that usually when the relationship gets to that point is it mutual that you split. First check your agreement to see what your termination options are.  Almost always the PM has earned their management fee for the term of any tenant they procured, even if you terminate the agreement.  That's really a commission that they agree to spread out for the term of the lease.  Sometimes you can negotiate that, and sometimes they play hard ball.  The best thing to do is to give them a call and see how agreeable they are to terminating.  If they cringe every time they see your call come in, they may jump for joy.  You won't know until you ask.  If they are not open to terminating, look at your agreement to see if they are meeting all their obligations.  If they are, you may be stuck until either the term ends of the current lease ends, depending on your contract.  If they are not meeting their obligations, you have a leg to stand on to push for a mutual termination.

This is something that happens in the business.  PMs are generally gracious people during PM transitions.