Acquiring fourplex, what happens to existing property manager?

[Gary Thao]

I will be closing soon on a fourplex with 3 tennants and I will be occupying one of the units. The previous owner currently has a property manager managing the three tenants. I was planning to start managing the units myself. Will I be able to cancel their contract? What about obtaining the deposits the PM has received? Can anyone provide answers to this scenario?

[Matt Devincenzo]

You need to request a copy of the management agreement that the previous owner signed, it will probably have something in there about if the property is sold. It should follow some sort of state law about how it should be terminated and what kind of notice you might need to give them, but I would definitely start by asking for a copy of the agreement and the current leases.

The deposits should be turned over as well and any rents that have been paid should be prorated for the date of closing. Meaning if your tenants pay $1000/mo total and you close on the 15th you should receive a $500 credit at closing for the rents that they paid the previous owner that cover the last half of the month.