What To Do, When Your Rental Contract Isn’t Working

man-upset2

To end your relationship with your property management company and to move on, you must do so according to the terms of the management contract you signed to ensure you don’t get sued for breach of contract.  While “Breach of Contract” is a concern for any homeowner,  please know that once a business (Property Management Company) starts suing its customers (namely you), the business model will soon come to an abrupt end.

Here are the dos and don’ts of terminating a management agreement.

Proper notice is required

First, check the termination clause of your management contract. Most contracts will require between 30- and 90-day notices to terminate a contract. Be sure you are within this time frame or one of two things will happen:  a. your termination request will not be honored; or b. your request could be considered a breach of contract if you still insist on terminating the agreement. If it’s considered a breach of contract, you may find yourself involved in a lawsuit.

Put Your Notification in Writing

Second, you need to make sure your notification to terminate the management contract is in writing. You should send the notice by certified mail, return receipt requested, so you will have a record that it was sent and that the property manager received it. Make sure you include the effective date of the contract termination.

Slow Your Roll If You Do Not Have Cause 

In a perfect world, when you first sign a management agreement, you want to look for one that does not require cause (a reason) to terminate the agreement. However, if your contract does require cause, you must have a reason, as spelled out in the agreement, to cancel the contract. An example of cause could be, the property manager did not store security deposits according to state regulations. If you try to terminate without cause, your request may be ignored, or you could be taken to court for breach of contract.  Some property management companies would rather skip the hassle and bad publicity of suing a homeowner and agree to terminate the contract just to please the homeowner in the hopes they’d go away quietly. Others may have little regard for the messiness of a lawsuit and feel goodwill and a good reputation are not worth fostering. In the case of the latter, be prepared to present cause and stand firm.

Put All Your Ducks in a Row

Make sure you are given copies of all leases, records of security deposits and a statement of all income and expenses. These documents should be sent to you immediately upon termination of the contract. There is no reason for a lag of more than three or four days.

Don’t Make it Personal

You need to focus on the numbers and the results. It is easy to let a personal relationship cloud the actual results the property manager is producing. If you like the property manager, but they are not living up to expectations, such as they are taking too long to fill vacancies or are responding to maintenance requests too slowly, you need to cut ties and find someone who will produce better results for your investment.

Make Your Voice Count … Take a Satisfaction Survey

Last year, Myrtle Beach Hotels® polled homeowners in Myrtle Beach. The results revealed unhappy homeowners who were not pleased with their current property management situations.  In the  2013 Survey of  250 Myrtle Beach condo owners:  68% said they were unhappy with their net 2013 rental income; 62% were unhappy with the quality of clientele being placed in their unit and more than 50% believe property management rely too heavily on discount travel sites to book their condos.

What’s your opinion? Myrtle Beach Hotels® would like your input. Take the 2014 Survey at myrtlebeachhotels.net/survey.