Terminating Property Manager Mid-Contract

[Andrew Steinhaus]

Hello all, 

Long-ish post- reader beware:

Currently having many issues with a PM that is bringing me close to firing them after only three months of the contract and looking for advice. 

Background: Hired PM in October, property was not leased until December 15th. PM failed to "actually" post the property on market for 6 weeks, finally got rented after lowering price at the same time the property hit the mainstream listing sites. Total cost to me (two months mortgage). Upon listing, details were inaccurate, communication was inconsistent (overall frustrating). 

First month of lease, tenant was double charged for rent- sorted out issue, no follow up to see if move in was good (small things that matter to me). 

January- Tenant double charged again, overpayment was pushed to me- took 17 days for response. Found out yesterday that not only have I been having excessive issues with communication with the PMC and getting simple tasks taken care of, coupled with extensive delays in reply (avg 12 days), but upon requesting the move-in inspection report, I found out that the tenant, ALSO requested the move in inspection documents... to which I realized the PM lied to me about having completed it back in December. 

Overall I was not pleased with their service but I wanted this relationship to work out for everyone's sake, but I am finding that perhaps even my tenant is having an equally troublesome time with the PM and that is something that I cannot tolerate. 

Caveat: Based on the PMA- I owe the PM all monthly management fees through the end of the contract if I terminate early, which amounts to about $3,000. I could pay it and be done with this headache, not sure if that's what ill do. 

At the moment, my #1 concern is that the tenant is being taken care of/ the inspection potentially requiring legal recourse due to the PM not performing it at time of move in and there potentially being damage done to the prop-thus resulting in a legal fight that I don't care to get into if not needed. 

The Question: Has anyone ever had this issue where the PM appears to be unable to take care of the property and the tenant? Has anyone approached the tenant to discuss if they are having issues with the PM on the same level that I am and attempted to work out some sort of deal/is this even right to attempt? And if anything similar to this has happened, how have you approached it? 

I am weighing all options for now but need to gather some viewpoints or considerations that I may be missing. This company will be terminated at end of contract no matter what, but I do not want this to snowball into anything worse. The number of incidents/and issues are far beyond the scope of this post so I'm not going to note every single one. 

Please and Thanks! 

Drew

[Nathan Gesner]

Quote from @Andrew Steinhaus:

If the PM fails to perform, you can fire them for cause and without termination. I would send the PM notice that you are unsatisfied with their performance and lack of communication. Give them notice to terminate the PM Agreement - without penalty - in 30 days. Instruct them to notify the Tenants of the pending change, then transfer all records, keys, deposit, and everything else to you or your new manager.

My recommendation is that you find a new manager first, then give your manager notice. The new manager should be able to help you with collecting everything from the old PM, notifying Tenants, etc.

If the old PM refuses to comply, tell them you will file a complaint with the state board. That should be enough to motivate them. If it doesn't, follow through on your threat. The state will usually respond to your complaint by calling the PM first and seeing if they can negotiate a settlement of some sort.