In this article I will tell you on how to deal with a bad Property Management company. Here, I will also provide you an in-depth detail on why landlords choose to fire a property management company.
Are All the Property Management Companies Good?
Working with a property management company will help minimize the stress levels and simplify the business of becoming a landlord, no matter how many years of experience you have as a landlord or how many properties you own and rent out. However, not all property management companies are the same.
Here, I will provide you with the steps on how to deal with a bad property management company but before that let’s take a look at why most people decide to remove their property managers.
Why Fire a Property Management Company?
1. Lack of Effort
Some services that property managers require may not meet your needs and expectations. Some property management companies may provide you with the services such as repairs and maintenance or rent collection but may not take initial responsibilities for other different services. A good property management company should be capable of fulfilling its duties and responsibilities as a property manager.
2. Lack of Maintenance Service
Maintenance is one of the most significant services offered by a property management group.
If yours does not cover the maintenance provisions specified in your contract, because of the negligence or unresponsiveness of your manager, you could face thousands of dollars or more in repair costs.
3. Lack of Communication
When it comes to concerns or incidents that arise, you and your property manager need to behave like best friends. If a resident has moved out, you should know.
If people are not paying rent, you should know. You should know if regulations are changing inside the building or if a repair is taking place. You will begin to lose faith and confidence in the property manager through lack of contact.
4. Lack of Time Value
You can fire a property management company if they’re taking too much time completing your work and following their responsibilities. These can include collecting rent late from the tenants, slow service and even taking a lot of time fulfilling your and tenant’s need.
How to Deal With a Bad Property Management Company?
1. Cancellation Policy
Most property management companies have a cancellation policy. It means you can remove them right before the work starts or even if the work is being carried on and is in process.
Most of the cancellation policies also don’t make you pay extra money if you’re terminating them. You can use this cancellation policy and remove the property management company if you no longer want them or if you are unsatisfied with their work.
Other expenses, such as work orders or bills that have not yet been paid for, could exist. Be prepared after the deal is terminated for these to roll in.
2. Possible Costs and Paperworks
Some termination provisions require a charge for breaching the contract early, even though you have adequate notice. It may be as little as a few hundred dollars or as much for the duration of the deal as the management fee.
Some funds are also owed to you, expect to wait for one to two months before obtaining them. Before deciding the amount you are owed, administrators must make sure they have sufficient funds to cover all the expenditures owed.
It is also the duty of the management company to pass the security deposits of the tenants to you or the new management company you are using.
3. Inform the Tenant
Make sure you inform the tenant about the changes that the property management company has now changed. As a landlord, it is your full responsibility to take care of your tenant. Property management companies take care of your tenant on your behalf.
Hence, you should notify the tenant about the removal of the property management company and that they no longer have to follow any requirements towards them.
4. Notice of Termination
There could be a few steps you need to take to cancel the contract once you have agreed to part ways with your current property management business.
The business might need notice, such as 30, 60, or 90 days, depending on the terms of the contract. Some contracts say that you can only terminate them for a reason, such as the company’s breach of contract. Notice of termination of a property management company may not be familiar to a lot of people compared to sending a termination letter to tenant,
Here’s a link that provides samples that can be used by a landlord seeking to terminate their deal with a property management company
Steps of Sending a Notice of Termination
Step1: Read the contract
Step 2: Be formal
Step 3: Send the notice with proper terms
Step 4: Write the reason for termination
Step 5: Write an appreciation letter
Step 6: Send the message
Read the Contract
Carefully read the terms of the contract with the property management firm. The terms should specifically indicate how much advance notice the business needs and to whom a termination letter should be sent. If some of the directions are vague, contact the company for clarification.
Open your message, using the full name of the company president, managing partner or other intended recipient, with a formal salutation.
Send the Notice With Proper Terms
Make it clear that you are compliant with your contract’s terms. You may say, “The contract terms require that I give you 30 days’ notice of my intention to terminate the contract.”
Write the Reason for Termination
If you wish, give a short statement as to why you are terminating the contract. This is strictly optional, but from the property management company it can head off an inquiring phone call.
An Appreciation Letter
Add a special thank you, if you are so inclined, for the company’s services. Mention the reaction of the organization to a particular event or episode that impressed you.
Send the Message
Proofread and carefully edit your message. Ensure that it is free from grammatical mistakes and pronunciation. By certified mail, send your message. A receipt will provide evidence that the letter has been delivered.
5. Switch to Another Property Management Company
You can always look for an alternative. If you’re starting to realize that you are no longer satisfied with your property management company, you can start looking for another property management company.
Here, you can compare the services provided by two of the management companies and decide if you really want a new property management company or not.
If you have the experience of managing a property of your own through any past experience from tenant screening, routine maintenance, solving tenant issues then, just go for it. This will also help you have personal growth as it will make you an expert in this field.
For this, you also require a good knowledge, ideas and on property management. Here’s a useful video on property management marketing ideas that’ll help you give idea on managing property by yourself.
You can self manage your property by:
- Purchase a property
- Set up the criteria for rental costs & tenants
- Find the tenants and rent them a home
- Rent collection and paying taxes
- Make the profit
7. Negotiate With the Property Management Company
Talk to your property manager and put your statements forward about the statements on how you want them to handle your property and take their responsibility if you think you are capable of convincing them.
Here, you can also put your points further on firing them if they do not do the work properly.
The Final Step
If you can show that you are ending things because the organization violated the contract, you can have to pay a charge for early termination. It is a good idea to put everything in writing so that if there are any issues later on, you have a paper trail of your correspondence with the company.
After you terminate the partnership with the management firm, gather some documents or data concerning your assets that the company had. You would want a record of the security deposits made, reports on the revenue and expenditures of your house, such as repair bills and maintenance costs, and copies of the leases signed by your tenants. Any outstanding rent owed by the company should also be sent along with it.
How do I report about a bad property management company?
Landlords may file their allegations with the rent control board of their city or county, the local tenant association, the rental housing association, the district attorney, and the consumer protection agency.
Can I sue a property management company?
Yes, you can sue a property management company in the same manner that you can sue the owner of any form of company.
How do I fire a property management company?
Hire another property management company
What should I do about a bad property management company?
Sue a property manager who is not receptive to your lawsuit by hiring an attorney skilled in local real estate and tenant rules.
What are the reasons for firing a property management company?
Lack of effort
Lack of maintenance service
Lack of time value