Firing Property Manager mid-lease - is there a how to checklist?

Question

CA SFH, tenants in the property for 2+ years. All seems great with the tenants as far as I know. No late payments or maintenance requests.

My issue is with the Property Manager. Specifically 2 areas:

1. Ive asked multiple times for an inspection since the 18 month mark. They also wont allow the owner to attend though there is nothing in the agreement about this. In fairness I would have been ok with not attending if the inspection had of taken place in a decent time frame and some communication provided, but now Im wondering if they can be trusted with my asset and want to see it for myself. Feeling a little paranoid about the 'why no inspection'.

2. Im bothered at the number of days it takes for rent to hit my account. It has slowly blown out over the 2 years to 10-13 days. What is the norm?

Ive contacted them by phone and email multiple times on both issues. My gut says to get rid of the PM and self-manage. This would be the first time firing a PM and Im wondering about the actual logistics of the change over for the tenants mid-lease and how to best manage that for them and myself?

Im thinking of the changes required to update clauses where the PM is specifically noted in the lease, change of payment info and a few other clauses to clarify.

I don't have their application or credit reports, will a PM usually hand these over? I will need their contact information as a minimum going forward.

Thanks

Kenny Dahill · Answer

@Natalie Z.,

If you haven't had maintenance issues in 2 years, rent payments are getting further delayed and they are bad at communicating... time to move on.  I'm using the type to suggest corrective actions first, but sometimes it makes sense to move on.

A few notes.

• Owner can't inspect:  This is a common rule with PM's.  They don't want the tenants bypassing them and communicating directly with the landlords.  Also, they don't want the landlords to get emotional about small things (i.e. clutter).Solution:  While you can't go inside with them, that doesn't mean you can't meet them outside.  This way you know an inspection is being done.
• Solution:  While you can't go inside with them, that doesn't mean you can't meet them outside.  This way you know an inspection is being done.
• Credit Check / Background Report:  Due to FCRA regulations, PM's are not allowed to share those documents with you.  The tenant themselves would have to hand you their reports.
• Lease Amendments:  Upon terminating the PM, you will need to amend the leases to update payment method and 'property manager'. You must honor their lease but you can change who the rent checks go to.
•

• Solution:  While you can't go inside with them, that doesn't mean you can't meet them outside.  This way you know an inspection is being done.

The best way to self-manage your rental is having a standard system in place.  Always collect rent online, never in-person or cash.  Too much risk.

I always suggest providing the household a gift card of $25 as a 'thank you for your patience as we transition'.  Small token that goes a long way.

If you don't feel comfortable giving your tenants your personal number, consider a Google number.

Best of luck!

Bjorn Ahlblad · Answer

@Natalie Z. I let my PM go last year. It was not difficult. Read your contract; notice period is probably 30 days. Get the leases-you will have to honor those for the remaining term. Meet your tenants and give them your banking info. My tenants were relieved and wanted to kiss my ring! Make sure you are familiar with LL tenant laws. Maybe join a local REI group for networking and support-leases, notices, tenant screening etc. All the best!

Bjorn Ahlblad · Answer

I emailed all the tenants to make appointments. Check your statements to see who has the security deposits. PM's are supposed to deposit them to your account; but check anyway.

Steve Milford · Answer

@Natalie Z.

Here is what I do:

1) Use Cozy.co for rent collection. I pay the $2.99 for 3-day transfer (basically equates to interest they might earn). I get notified when tenant starts process. Also, automatic tenant notification of late fee, which also adds to account. No other fees to me. System can also handle messages, repair requests, background checks etc, though I allow tenant to text me. If rent is going to be late and there has been no communication, then I reach out to have a discussion of expectations. If done by text, I archive save and print discussions. Otherwise done by email.

2) I arrange a home inspection annually through a residential home inspection firm to look for maintenance issues.

3) I use forms from local landlord association.

* It's a trade off, pay someone else because my time is more valuable, or do it myself with efficiency. Expectations are defined in the contract, one just needs to enforce it. I also use local contractors/repair persons for fixes, and have a lawyer I can call if needed. Last year, I spent time and money equivalent of $1,000 on management AND repairs, 60/40. Before this system, area PM's I contacted wanted 10% of rent and still wanted to pass on all "costs" to me. I just didn't see the value of them, plus I didn't feel like raising rent higher to "pay for" PM, providing less service and costing me more. It's a business, treat it as such.

Good luck.

Ronan Donnelly · Answer

If your property manager isn't working out it is definitely time to move on. It is however also time to reflect on why it didn't work out.

My personal experience has been that in order for the relationship to work I need to be very clear up-front about what my expectations are e.g. get 3 quotes for every expense above $1k, get my approval for any expense above $350, rent paid by x date, late fees, eviction process etc.

If you take time to reflect on how you could improve your odds of success working with a property manager going forward you will be ready to scale when the time comes. Good luck!

Mathew Wray · Answer

@Natalie Z. @Susmitha Pranitha

I’d make sure you have a reasonable grasp on what’s expected of you from a legal standpoint as well. Look for local LandLord advocacy groups-here in Portland we have Metro Multi Family and I’m sure there’s something similar in California.

Not only do they have forms that are vetted by lawyers annually to keep up with changes to the law, they often have overviews and classes on the law changes. Oregon has layers of LL/tenant law including statewide rent control, city ordinances, changes to rental screening and security deposits, etc. Would be shocked if the same types of law aren’t being considered in California as well.

Best of luck in your transition!

Mathew

Pranitha Shandi · Answer

What's the best place to find the local laws.  Presume it's county-based... I have searched on Google... and wasn't sure.

The area where my property is: 97229 (Portland, OR)

Jonathan Swartz · Answer

Managing your own properties is that not hard. Lot of advice on these forums. Agree with above, but start building your processes and systems and you'll be fine. Make sure you have the local laws down. Ask for help if you don't know. Best of luck!

Natalie Z. · Answer

@Bjorn Ahlblad thanks. I only have names. If I cant get other contact methods Ill just snail mail something. The PM has the deposit - I believe they hold it in trust in CA.

Natalie Z. · Answer

@Susmitha Pranitha similarly, Ive had no maintenance requests in 2+ years, which is why I likely held off for so long. But I also haven't been able to see the inside condition of the property and that worries me. Best of luck with your decision!

Firing Property Manager mid-lease - is there a how to checklist?

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