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Property Management Contract - Termination

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mkj361

Junior Member
My HOA has a contract with a property manager to manage our community. Our contract with them has a clause that allows for us to notify the manager of any breaches or defaults under the contract, and they then have 60 days to cure the breach. We notified the manager in May 2017 of the breaches (quite a long list) and advised them that as per the contract they had 60 days to remedy. 60 days later, the breaches were not remedied and were still occurring. In July, they assigned us a new property manager, so we attempted to give them another chance to see if the new person could fix the mess. They could not. In October, we provided them with written notice that we had given them ample time (much more than 60 days) to cure the breaches and that they had not done so, so the contract should be terminated the last day of the month that notice was given (in this case, October 31, 2017). The manager has refused to accept the termination, as they claim the 60 day period is not open ended and that we needed to terminate in July.

There is no language in the contract that supports this. It states "The Association may give the Manager 60 days written notice to cure such complaint, breach,.....should the same not be cured to the reasonable satisfaction of the Association within such time, then upon further written notice given by The Association to the Manager, this Agreement shall terminate on the last day of the month during which such further notice was given".

The Manager has continued to withdraw their monthly fees from our account (which the control) and have refused to turn over our documents and financials (while continuing to be in default under several sections of the Agreement).

So, I guess my question is, even though we didn't provide written notice to terminate on day 61, do we still have the right to terminate? Or, did we need to demand another 60 day period?

Not really related to this question, but some of the things they were doing are borderline criminal/fraud (not paying our contracted sub-trades after September 2017, but continuing to pay themselves). Our association has over $9,000 of arrears as the Manger has not made any collection effort for well over 18 months, despite our repeated requests (which we have copies of the emails).
 


LdiJ

Senior Member
My HOA has a contract with a property manager to manage our community. Our contract with them has a clause that allows for us to notify the manager of any breaches or defaults under the contract, and they then have 60 days to cure the breach. We notified the manager in May 2017 of the breaches (quite a long list) and advised them that as per the contract they had 60 days to remedy. 60 days later, the breaches were not remedied and were still occurring. In July, they assigned us a new property manager, so we attempted to give them another chance to see if the new person could fix the mess. They could not. In October, we provided them with written notice that we had given them ample time (much more than 60 days) to cure the breaches and that they had not done so, so the contract should be terminated the last day of the month that notice was given (in this case, October 31, 2017). The manager has refused to accept the termination, as they claim the 60 day period is not open ended and that we needed to terminate in July.

There is no language in the contract that supports this. It states "The Association may give the Manager 60 days written notice to cure such complaint, breach,.....should the same not be cured to the reasonable satisfaction of the Association within such time, then upon further written notice given by The Association to the Manager, this Agreement shall terminate on the last day of the month during which such further notice was given".

The Manager has continued to withdraw their monthly fees from our account (which the control) and have refused to turn over our documents and financials (while continuing to be in default under several sections of the Agreement).

So, I guess my question is, even though we didn't provide written notice to terminate on day 61, do we still have the right to terminate? Or, did we need to demand another 60 day period?

Not really related to this question, but some of the things they were doing are borderline criminal/fraud (not paying our contracted sub-trades after September 2017, but continuing to pay themselves). Our association has over $9,000 of arrears as the Manger has not made any collection effort for well over 18 months, despite our repeated requests (which we have copies of the emails).
Why are you allowing them to control the bank account?
 

mkj361

Junior Member
Why are you allowing them to control the bank account?
We didn't have an option...the contract with the company was set up by the developer of the community (it is a new community) and was transferred over to us in that fashion once the developer left the picture.
 

Zigner

Senior Member, Non-Attorney
We didn't have an option...the contract with the company was set up by the developer of the community (it is a new community) and was transferred over to us in that fashion once the developer left the picture.
Close the accounts and open new ones.
 

mkj361

Junior Member
Agree wholeheartedly. You are never going to get compliance from them as long as they control your money.
We have control of the money now...my question has to do with our right to terminate last October as per the 60 day termination clause. I would like to file a claim against them for the return of the monies they paid themselves from the account from November - February. From my point of view, the language in the contract is very clear and we had every right to terminate, so the Manager should not have had the right to continue withdrawing funds. Please ignore any legal fees associated with going after them (as they would likely be much more than we are trying to collect) and assume all the legal work will be done for free.
 

LdiJ

Senior Member
We have control of the money now...my question has to do with our right to terminate last October as per the 60 day termination clause. I would like to file a claim against them for the return of the monies they paid themselves from the account from November - February. From my point of view, the language in the contract is very clear and we had every right to terminate, so the Manager should not have had the right to continue withdrawing funds. Please ignore any legal fees associated with going after them (as they would likely be much more than we are trying to collect) and assume all the legal work will be done for free.
Your only option would be to sue them for the return of the funds. That could be small claims court or regular court, depending on the amount of money involved. Its too bad that you didn't retake control of the funds at the same time that you gave them notice of termination.
 

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