As a property owner, there are times when you need to change property management companies. The reasons can range from poor management, or just the need for more services than your current company provides. Whatever your reasons, we have some helpful ideas on how to make the change more effortless and your outcome a success.
Contract review: Look over your current contract to be sure you are aware of any clauses that stipulate restrictions on termination. You may have certain dates by which you have to give notice or suffer penalties. If you need to terminate due to your current manager not fulfilling the contract, be sure you have documented the instances of mis-management. Make sure your contract allows for such causes and be prepared to cite those.
Research new management companies: While this one seems obvious, the timing is critical. It is important for the return on your properties that you have as little lag time as possible in between management. Decide on your new manager before you terminate the current one and your transition will be more seamless.
Write a termination notice: If you suspect there may be issues or tension with the termination, consider consulting with a real estate attorney for review of the letter. You should detail your reasons for termination, citing the clauses in the contract that provide for this, and also provide info regarding any mismanagement, if appropriate. If you simply need to go with a different company for other services, note that the current manager has been favorable, but that you just have other needs at this time. This is a basic template of such letter.
Prepare Change of Management forms: The forms needed may vary depending on the type of properties involved, but that can include a change of lessor form, or forms for notifying utilities companies of management change. The WLA (Washington Landlord Association) is a great resource for a variety of forms, as well as assistance for landlords in a wide variety of areas.
Clarify the current management’s duties upon termination: These can include a financial report on rents, agents’ fees, and other funds. All other records and security deposit obligations, as well as copies of leases.
Deliver your letter: Include associated forms and deliver in person to help ease the transition along. Be prepared to answer questions or concerns at that time. Make sure to not let this be personal and focus on your practical needs as a property owner. This is, after all, your business.
Allow reasonable time for receive any funds owned. This time frame is typically addressed in the original contract. Tenants security deposits need to be transferred to you or the new company and tenants notified of this.
Inform your tenants: As soon as possible after informing your manager of your intent to change, inform your tenants in writing. Include the name and contact information of the new management company as well as start dates and new address for the new management for receipt of rent.
With some forethought and a detailed understanding of your contract, you can operate accordingly and make the transition to your new management company stress free. Start off the new relationship right, call us today.
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