Sacking PM (WA) for Negligence

[natmarie73]

As above - how easy is this to do?

My PM has been pathetic from the start and now I have found out that (according to my solicitor) they may have been negligent and I could actually sue for damages. Once my non-paying tenant is evicted I wish to terminate our agreement. How would I go about this?

Solicitor has advised I make a formal complaint to the Dept of Commerce and then request to terminate the agreement in writing. What happens if they don't agree to terminate and try to charge me for their costs for the remainder of the agreement? Those who have been through this scenario before - do PM's usually let you terminate without hassle or do they fight?

In 10 years of investing this is the first time I've had an incompetent PM and problem tenant.

 

[thatbum]

What happens if they don't agree to terminate and try to charge me for their costs for the remainder of the agreement?

You keep contending otherwise, as per your solicitor's advice. That's how a dispute usually goes. One side will eventually fold, or it goes to trial.

Those who have been through this scenario before - do PM's usually let you terminate without hassle or do they fight?

There's no one answer to that. It depends on a huge range of things, depending on how strong each side thinks their case is primarily I guess.

You seem to have a lawyer assisting you. Why not follow their advice and see how it goes. Legal disputes are a step by step process - and there isn't much point getting ahead of yourself. Just follow each step and re-assess at each point.

 

[natmarie73]

Thanks for that TB,

I will wait until they get the tenant out then let them know in writing I wish to terminate the relationship and see what happens from there.

 

[HD_ACE]

Do you plan on suing for damages?

cheers

 

[Doovalacky]

You should have a management authority contract with them?
Check it and there should be a section dealing with termination off contract.
Generally there is at least 30 days notice in writing involved.

 

[Joe D]

As above - how easy is this to do?

My PM has been pathetic from the start and now I have found out that (according to my solicitor) they may have been negligent and I could actually sue for damages. Once my non-paying tenant is evicted I wish to terminate our agreement. How would I go about this?

Solicitor has advised I make a formal complaint to the Dept of Commerce and then request to terminate the agreement in writing. What happens if they don't agree to terminate and try to charge me for their costs for the remainder of the agreement? Those who have been through this scenario before - do PM's usually let you terminate without hassle or do they fight?

In 10 years of investing this is the first time I've had an incompetent PM and problem tenant.

Natmarie 73

I share your dilemma!

I now self manage my Perth properties , however, when I used to have PMs there was always a Termination clause in the Exclusive Authority which went along the lines of:
This Agreement may be Terminated by the Owner if the Agent fails to perform their duties ....... etc ..........and written notice has been given etc etc.

(nb: I used to also strike though any liquidated damages clauses)

Yes, you can sack your PM at any time if you have cause. Even if you don't have cause you can change PMs and the onus will be on the previous PM to chase you for supposed payment as they would no longer be collecting the rent.

My previous experience has been that when a Landlord sacks a PM, they are very reluctant to pursue any recourse even if they thought themselves to be in clear.

Read= the costs of follow up are not worth the revenue and potential bad PR from their actions.

 

[natmarie73]

Thanks for the responses peeps,

Yes, I am thinking of suing for damages depending on what the final "damages" amount will be. My solicitor thinks I will have a good case, and if the amount is <$10,000 no lawyers need to be involved. I also have LL insurance so will see what I can claim here.

Good tips also about striking out things in the management agreement. i admit to not even reading the fine print my fault I know but I have never had any problems before so have become complacent and trusting that all PMs actually try to do the best for their client. Well, lesson learnt there. I will have a read of it when I get home from holidays.

Joe D, how do actually physically go about "sacking" the PM? Do you just tell them in writing giving the requisit notice then just sign up with another agent? With the amount of managing I have had to do with the PMs, it would be easier for me to manage the property myself I think. It is in one of the dodgier areas though, so I'm a bit reluctant to do so.

I am hedging my bets that once I alert the principal that his PMs have breached their fiduciary duty of care to me and I will be seeking damages I will be able to terminate without too much hassle due to "irreconcilable differences" or whatever similar term would apply

 

[Joe D]

Joe D, how do actually physically go about "sacking" the PM? Do you just tell them in writing giving the requisit notice then just sign up with another agent?

Just give them written notice that their services are no longer required per Clause XXX of the Exclusive Agreement. In the same notice direct them to forward all current tenant documentation, Bond Transfer and keys to yourself or your new PM.

nb: If you are using a new PM they will normally chase the paperwork and keys themselves but you still need to give the old PM the written notice.

 

[xanh]

Just give them written notice that their services are no longer required per Clause XXX of the Exclusive Agreement. In the same notice direct them to forward all current tenant documentation, Bond Transfer and keys to yourself or your new PM.

nb: If you are using a new PM they will normally chase the paperwork and keys themselves but you still need to give the old PM the written notice.

Probably best, but last time I changed PMs, I didn't contact the old PM at all. I just let the new PM handle it.

 

[justlearning]

We sacked our pm a couole of years ago. They were hopeless and weren't doing their job. We should have given them written notice to allow them to fix the issues as per the agreement but we just wanted out because they were so bad. They ended up taking us to court for breaking the contact (I think it was small claims tribunal). We had a meditation session beforehand and ended up splitting the difference...a whole $250 we paid. I honestly don't know why they bothered. ..I think it was all about principal for them. It's the best $250 I've spent. Have saved 10 times that with a competent agent.

 

[Dazz]

Joe D, how do actually physically go about "sacking" the PM?

Joe used to use those big ol' fashioned potato sacks and a couple of big old Greek friends. The look on the receptionist's face when the group would walk into the office and Joe would announce "I'm here to sack the property manager" was priceless.

He told me bundling them into the back of the ute was always difficult. Their suit and tie or high heels if a woman always got caught up in the big hessian bag.

Dumping them at the doorstep of REIWA with a big RTS note on the sack was worth every penny Joe had to pay Gino and Nic.