A few months back I asked if you were feeling the pain of an underperforming rental and gave a few examples of what that might look like. Those included some good examples of bad management experiences that justified a change in PM.
Perhaps now more than ever, it’s important to know you have a reliable and knowledgeable company on your side. Although we have moved to our home offices based on COVID-19, we remain fully equipped and ready to help you! In fact, we just facilitated a “take-over management” property 2 days ago!
If you’ve reached the decision to make the switch, here is a quick reference guide for what you should do:
Step 1: Review your current management agreement and find out what it says about terminating.
Most companies will have language that outlines termination, the required notice and any associated costs. This can vary greatly so make sure you have read and understand your obligations.
Step 2: Confirm you have a copy of the current lease agreement.
If you do not have the current lease agreement on file, request it from the current PM. If the current PM will not provide a copy, the new PM can attempt to obtain a copy from the tenant. And if an existing lease cannot be obtained, the new PM can draft a new lease with the tenant.
Step 3: Notify your current PM that you are providing notice to terminate effective _______ date.
Hint: It’s easier if you can work it out to transition on the 1st of any given month. (This will require your current PM being okay with the new PM contacting the tenants a couple weeks prior to the effective date and inform them of the upcoming changes.)
Request the following items be made available for your new PM no later than the effective date:
- Keys to the property
- Security Deposit Funds
- Inspection related documentation (written report, photos etc.)
- Tenant contact information (Names, Emails, Phone Numbers etc.)
- Tenant payment ledgers
- Tenant application documentation
Step 4: Be prepared for something unexpected. (there is almost always something.)
This could be an issue with tenant payments, maintenance issues the PM never addressed or worst case scenario… the current PM not cooperating with the transfer.
Step 5: Sit back, relax and let your new PM (hopefully HRS) smooth things over while also charting out a better course for your investments.
I hope this was helpful! If you have any questions about this process or anything else as it relates to your rental property, please don’t hesitate to reach out!
Paul Branton, Director of Investor Services