A Notice to Terminate a Property Management Agreement is a document that gives a property owner or landlord the ability to end their contract with a property manager. A thirty-day notice should be provided, and the owner of the property or landlord should inform the tenants of the termination of the property management agreement. This way, tenants are aware that the property manager has been changed.
Purpose and Overview
A notice to terminate a property management agreement is usually issued because a property manager is not maintaining the rentals (or property) according to the landlord’s expectations and standards. The landlord should ensure that they uphold the contract terms with their property manager to avoid breaching the agreement; hence, prevent any lawsuits.
Issues that could lead to the termination of this agreement should not be personal ones and may include:
- A property manager delaying dealing with maintenance and repairs
- A property manager failing or taking longer to fill up rental vacancies
- A property manager not offering proper security to the property
- A property manager failing to deal or relate well with tenants, that is, inadequate screening and not handling their complaints efficiently
- The landlord is selling their property
- The landlord wants to hire a significant property management company and has to end the contracts with small or individual property managers
As a landlord, issuing the notice to terminate a property management agreement to the property manager means formally canceling their responsibilities. Therefore, they should request and collect the keys, rents, materials, accounts, and deposits from their property manager.
What to Include in a Termination Notice
For a landlord to have a legal and complete property management agreement termination notice, some elements must be included in the termination notice. They include:
A notice to terminate a property management contract is not any different. The landlord must observe this notice period to ensure that he does not face any lawsuit due to breaching the contract in any way.
As a landlord, before terminating the contract with the property manager, advance notice should be included in the agreement. The clause about how much the landlord will give their property manager before ending their responsibilities is a must. In addition, the landlord should inform the property manager about their intention of ending the contract, preferably through writing, like certified mail, and not through email.
With that, the landlords can prove that they sent the notification within the stipulated period of the contract and the property manager received it. With this notification, the landlord must indicate the actual date when the contract will be terminated. Also, this will give room and time for the landlord to inform the tenants about the management changes.
That way, the tenants know where they can access their deposits and request any help from. The notice period must be specified and observed by the landlord.
Even though some contracts do not require reasons for ending a contract, as a landlord, the property management contract to terminate notice must indicate the reasons for the termination. The property manager should be appropriately informed of the reasons as to why the contract has been terminated. This will help to avoid court cases or an irritated manager who chooses to ignore the instructions.
Fee for early termination
The termination clause should include a fee for early termination of the contract. The fee can range from a few hundred dollars to the remaining amount payable according to the contract.
Considerable costs and paperwork
When it comes to handling costs, the property manager, who is being terminated, will have to transfer the rents collected from the tenants, security deposits, money reserved, and miscellaneous funds to the new property manager. These funds may take about one or two months to finish transferring to the new manager. Therefore, it is essential to ensure that the funds are transferred to a proper account according to state laws. A statement regarding the clearance of such cost-related aspects should also be included in the agreement.
Obligations upon termination
The termination notice should also include the property manager’s obligations after the termination happens. This may include:
- Handing back of leases
- Giving the landlord the security deposits records
- Presenting statements of all income and expenses
These and other such obligations are usually supposed to be concluded within three to four days after the termination of the contract.
As a landlord or property owner, it is easy to terminate the contract with the property manager. A landlord should present the notice to terminate a property management agreement to the property manager to finalize their desire to end the contract.
However, it would help if you keep in mind that reading through the contract carefully before handing it over to the property manager is essential. This way, the landlord can avoid lawsuits and any fees or fines that might arise due to terminating the contract early.
Way to Notify the Property Manager
The landlord can use two effective and legal ways to inform the property manager of the contract termination. The landlord can use these ways to send the property management agreement termination notice to the property manager. They include:
A certified mail is a USPS service that offers the sender of a mail-piece an official receipt that indicates the item was mailed successfully. The recipient signs after receiving the item; this signature is received back by the sender.
The best way to send legal notices is through certified mail, as the sender can receive a return receipt that acts as evidence of the delivery in case of a court case. In addition, certified mail with a return receipt is the best way for a landlord to be sure that the property manager has received the property management agreement termination notice.
The forwarding address is an address used to indicate that the destination mail has been changed since the recipient has been changed. In this case, after terminating the contract with the property manager, a forwarding address should be provided after a particular date.
This way, the tenants are aware of the changes and know where to make their rent payments, ask for the security deposits, and any other related issues.
- A landlord is the one who issues the termination agreement notice.
- He or she issues it to a property manager, a property management firm, or any other individual managing the properties of the landlord, especially rental ones.
- The notice is served when the landlord wishes to end the property management contract.
- This termination agreement act as a form of notification to the property manager about the termination of the contract and the end of their responsibilities.
- The property manager must transfer all that belongs to the landlord once this contract is issued.