Voiding Contract with Property Manager: How to go about it???

Question

I own a rental property out of state in a college town, so I am utilizing a property manager. This manager has been a problem from the beginning.

Now its December 20th and I have not received the tenants checks, she's blaming the post office and new PO box. I did not get communication about this until the 20th, I have no lease agreement for the current tenant, no communication, no rent collected. The problems are recurrent and at this point I think the effort I am putting into managing her could be better put into managing the property myself until this lease is up, then I will transition to a property manager in town that I have first hand experience with.

To clarify, I know that things happen and I am generally fair and understanding, but when there are recurring problems, and no communication about it, this is when I have a problem. Specifically, there is no excuse for being 20 days into the month and having no sign of payment. I think a competent PM would have the lost checks voided and new checks collected, especially during holiday months when bank accounts can easily be overdrawn.

Other problems:

1. Could not get the house leased to tenants, likely due to poor communication. Now it is leased at below market rate to non student tenants.

2. Poor communication with me, hard to get a hold o

3. Only collected half rent at the beginning of the month for November and the other half at the end of the month and did not collect a late fee despite us making it clear that the tenant will be charged with a late fee

My question is: Our contract does not have any wording for ending a contract, can I send her an email and letter via certified mail requesting the tenant file and to end our contract since she is not doing her job? Do I need to post 30 days notice of ending contract and begin managing myself for February rather than January?

Thanks in advance

Nathan Gesner · Answer

I'm not surprised to see your PM doesn't include termination instructions. Send them 30 days notice of termination with a demand for the transfer of all tenant files, keys, security deposits, and other items no later than (DATE) and a consequence for failure to meet the deadline (report to their broker, report to commission, etc.). 30 days should be plenty of time.

At the same time, send written notice to your tenant introducing yourself as the owner. Let them know how to verify ownership (county map server online is usually sufficient), at that the PM has been fired. Give them instructions for paying rent, communicating, and reporting maintenance/emergencies.

Peter Tverdov · Answer

You own the property, not the PM. Take ownership. I'd follow @Nathan G.'s advice.

Shawn Wainsely · Answer

I just wanted to update everyone. I spoke to the owner of the management company who was extremely apologetic and unaware of the problems within the company. She took full control of the problem. I agreed to give them a chance, mostly for them to handle the eviction. We went on to evict the tenant who really was a horrible tenant, left the house in awful shape, did not pay rent, etc.

Management company is under close watch and has since rented out the property. Will keep everyone updated as time goes on.

Shawn Wainsely · Answer

Now the story has changed, now the tenant is getting the blame when prior to this the full blame was on a change of po box and mail man blame. I received an email saying the tenant hadn't paid on time, he will be charged a late fee, etc. I didn't get any additional income from late fee last month. Further, a change of story means the PM is lying when we should be on the same page and working together. My stance has not changed.

Based on what Im seeing, I think its PM laziness and I don't personally think the tenant is being irresponsible and think that he would pay on time. In case he doesn't, I will do research on eviction process as an out of state owner. I will be canceling my agreement with PM this weekend with a 30 day notice. Making February the first month I'll self manage. I appreciate all the advice and info from you guys. Its a learning process, more that goes wrong the more I learn, hope to level out the process and have better systems in place moving forward.

Theresa Harris · Answer

@Shawn Wainsely  Make sure you get the deposit and a copy of the move in report.

Shawn Wainsely · Answer

Thank You everyone, this is amazing advice. As of now I have requested tenant file for my records and for tax purposes, my goal is to get this information before hand. I have no contact from pm and have a feeling that Im going to get pushback for the month of December.

As of now, as soon as I get tenant information, Im going to give 30 days notice this week by which I will need tenant file, deposit, December and January rent. From there I will make tenant contact and let him know how to pay rent and make maintenance requests.

Am I missing anything?

I will be new to managing and specifically managing out of state but at this point Im spending more time trying to manage the PM. Any advice is welcomed and thanks again!

Mike McCarthy · Answer

My understanding is if your contract doesn’t state otherwise, there’s no need for a timeframe for termination, you can terminate immediately.  Also read your contract closely. If they failed to perform what it says (not what you think they should have done), use the term terminate for default. Basically they aren’t holding up their side of the contract.

As stated by Nathan, provide a detailed list of exactly what they need to give you - including the rent you’re missing, with a 15-day deadline. Don’t leave it up to them to do the math correctly or remember to transfer the security deposit to you.

Aaron K. · Answer

Depends on what your management contract says and any applicable state laws.  However if late fee collection is in the contract and they failed I don't see you having any penalty terminating for cause.

Voiding Contract with Property Manager: How to go about it???

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