Property Managment Fees for Selling to Tentants

[Ian I Leinwand]

I'm a professional property manager and we were just informed by one of our property owners that they are selling the home to the tenants today. 

Our property management agreement that owners sign has clauses that state that the property owner must pay the remaining management fees for the contract year if they break the management agreement. We also have a clause that states that if an owner sells to a tenant we placed that we get a 1% commission on the sale. Most owner wait to sell prior to renewing or re-renting a property. 

I think these clauses are pretty standard for the PM industry. My issue is our owner is very upset about the fees associated with breaking the property management agreement despite having signed the contract. I get it... no one likes fees but we are only asking the owner for the lesser of the two fees which I think is fair. 

We manage one other property for this owner and we don't want to upset them further but we also want to stand behind our management policies. If owners could take back and sell properties without any fee for breaking the contract PM businesses would not have much security and have seriously reduced value. 

I would love to hear from other PM on how they would handle the situation.