Property Management Coercion?

[SNIDad]

What is the name of your state (only U.S. law)? California
I have a contract with a property management company that says they charge $2,500 if I discontinue use of them before the lease is up. I want to keep my tenants when the lease is up however, They say I still owe due to my contract also says "after lease is up AND they serve a "60 day Notice of Eviction." When I signed, I didn't notice that "AND" part. I just want to get rid of my property management company and keep my tenant. But, I feel the company is holding me and my tenants hostage so they will keep our business. Isn't this coercion/extortion?

 

[HomeGuru]

What is the name of your state (only U.S. law)? California
I have a contract with a property management company that says they charge $2,500 if I discontinue use of them before the lease is up. I want to keep my tenants when the lease is up however, They say I still owe due to my contract also says "after lease is up AND they serve a "60 day Notice of Eviction." When I signed, I didn't notice that "AND" part. I just want to get rid of my property management company and keep my tenant. But, I feel the company is holding me and my tenants hostage so they will keep our business. Isn't this coercion/extortion?

**A: you do owe a management fee equal to their monthly fee until the lease is up.

 

[SNIDad]

The management fee is $99. That's $1,200 per year. I plan to continue using them until the lease is up. It is that that time they say I still owe $2,500 or they will evict the tenants by use of the 60 day notice. I am not instituting the notice as the tenant has done nothing wrong at this time. It is the company that will serve it without my approval. Oh, they say it is "implied" as approval because I no longer wish to use them to manage my property. But, don't they have to abide by CA laws for this? They aren't the owners; I am. The tenant is very good and I want to keep him and start my own lease with him (at the END of the lease, of course).

 

[HomeGuru]

The management fee is $99. That's $1,200 per year. I plan to continue using them until the lease is up. It is that that time they say I still owe $2,500 or they will evict the tenants by use of the 60 day notice. I am not instituting the notice as the tenant has done nothing wrong at this time. It is the company that will serve it without my approval. Oh, they say it is "implied" as approval because I no longer wish to use them to manage my property. But, don't they have to abide by CA laws for this? They aren't the owners; I am. The tenant is very good and I want to keep him and start my own lease with him (at the END of the lease, of course).

**A: file a compliant with the Board of Realtors and the state RE licensing office.

 

[FarmerJ]

Send to your tenants a certified letter informing them in the tenth month that you will not be renewing your contract with the property management firm and if they wish to stay on they will have to see you about a new lease to be signed before the current lease expires. (feel free to relay to them that the PM firm has threatened to evict them with notice if you do not renew with the pm firm so if they want to stay on signing a new lease with you would protect them. Then do what you must to terminate the agreement with the PM firm and if the pm firm refuses to transfer any due funds such as deposits , due payments to you plan on suing the pm firm for the funds.

 

[SNIDad]

Thanks HomeGuru & FarmerJ. Sounds like good advice. My tenant's lease is up on July 31, 2012. I'll put in a complaint and send a certified letter to the tenant now. Then, I'll have the tenants sign a new lease by the end of July to cover for the eviction from the PM. Hopefully, the PM won't withhold any deposits and/or rents claiming I "owe" them $2,500. If so, I will be taking them to small claims court. I just hope the Judge will see it my way or else I'm out a lot of money. The way I see it, fulfilling my contract means waiting to the end of lease AND letting them file a 60 day Notice to Evict. Except the tenants (and me) can disregard the eviction because there will be a new lease; Right?

 

[SNIDad]

I forgot! One last question. The PM also says the tenants have to physically move out as well. Will my new lease with the tenants protect them from that happening?

 

[HomeGuru]

I forgot! One last question. The PM also says the tenants have to physically move out as well. Will my new lease with the tenants protect them from that happening?

**A: The PM is giving BS.