Ending Your Property Management Contract Without Headaches

Answer

It’s common for rental owners to outgrow a property management relationship or to seek fresh approaches. Terminating a property management company involves following your existing contract, providing proper notice, and completing final accounting to protect your interests and comply with state laws.

First, review your management agreement carefully. Most contracts include a termination clause that specifies:

• Notice period: typically 30–60 days before your desired end date
• Termination fees: a flat fee or percentage of remaining management fees
• Required format: written notice by certified mail, email, or fax

Next, draft and send your written notice. Include:

• The contract name and your property address
• Your intent to terminate and the effective date
• Any fee arrangements per your contract

After your management company acknowledges receipt, confirm a timeline for:

• Final financial report: income, expenses, security deposit balances
• Fund disbursement: transfer of remaining rental proceeds
• Document return: keys, leases, vendor contacts, tenant files

During the transition period, maintain clear communication:

• Update tenants in writing, providing them with new contact information
• Coordinate any upcoming inspections or repairs to avoid service gaps
• Keep copies of all correspondence and financial statements

Be aware that some states require property managers to hold security deposits in trust accounts. Confirm with your state’s real estate commission or consult model regulations at National Association of Realtors for specifics. If your property uses escrow services, verify when and how deposits transfer to you or your next manager.

Finally, conduct a brief audit of vendor contracts and tenant agreements. You may need to reassign landscaping, maintenance, or leasing contracts to yourself or a new manager. Buyers are recommended to verify cancellation terms with each service provider.

Before finalizing the termination, it’s advisable to consult a licensed attorney or real estate advisor. They can ensure that your notice meets legal requirements, protect your security deposit handling, and help you avoid unexpected fees or disputes.