How to Terminate a Property Management Contract Effectively

Managing your property is a responsibility often handed over to a property management company. However, when issues arise and the company is not meeting contractual or ethical standards, it's crucial to know your options. This guide will walk you through how to terminate a management contract effectively and what steps to take in such a situation.

Understanding Your Contractual Obligations

Before diving into the process, it's essential to review your management contract carefully. Most contracts will specify the conditions under which either party can dissolve the agreement. Key points to look for include:

Termination notice period Specific conditions for termination Compensation for early termination Responsibilities of each party during termination

Identifying the Issues

Identify the specific issues with the management company. Common complaints include poor communication, lack of maintenance, and failure to address tenant concerns. In this case, the issue was a significant one—neglect in handling a tenant's early lease termination request. Here's what happened:

The Scenario: A Tenant's Early Termination

A tenant notified the management company more than four months in advance that they would have to terminate their lease early due to a military spouse relocation. Despite federal law permitting such early termination, the management company failed to act, leading to significant complications for the tenant and, ultimately, for the owner.

The management company’s negligence included:

Notifying the property owner about the tenant's request Not scheduling a move-out walk-through for the tenants Overall neglect in handling the situation

Terminating the Contract

Once you've identified the issues, it's time to formally terminate the contract. Here are the steps to follow:

Review the Contract

Check if your contract allows for termination on short notice under certain conditions. Common clauses include:

Termination with 30 or 60 days' notice Termination if the management company fails to perform certain functions

Send a Formal Notice

Write a formal letter explaining the issues and requesting contract termination. Make sure to:

State the dates of the issues Cite specific clauses from the contract Request the termination of the contract within the specified notice period

Follow Up

After sending the letter, follow up with phone calls or emails to ensure the management company has received it and to provide any necessary information.

Hiring an Attorney

If the management company refuses to terminate the contract or the process becomes complicated, it may be wise to hire an attorney specializing in contract law. An attorney can help you:

Review the contract for any legal issues Draft appropriate termination notices Advise on negotiations with the management company Prepare for potential legal action if necessary

Conclusion

Terminating a property management contract should be handled with care and attention to detail. By understanding your rights and obligations under the contract, and potentially seeking legal assistance, you can ensure a smooth and effective termination process. Always prioritize communication and documentation to protect your interests.