Should I re-sign a Management authority...?

[Luke]

Hi Gang,

Yesterday my PM rang me, sounding very stressed and insistent... actually she rang me twice about this, and then a third time this morning. I know I'll be getting another call tomorrow to boot.

She is claiming that to 'get everything ready for the end of the year, and the possibility of new tenants etc etc" she needs me to re-sign an exclusive Leasing and management authority for her.

(Let me explain, I've had her on this property for 2 1/2 years... it's now an ongoing monthly tenancy, and as far as I know the tenants are quite happy and have no intention of moving.) (I spoke to them just 6 weeks ago)

Now I'm a little suspicious. I can't decide if I think she's lost the original paperwork, or if something else is going on... or if she's just on the level and is worrying about something that might not happen for 2-3 years.

It's an exclusive leasing and managing authority (REIV Code 005) for another 120 days,... and continuing after that. The four months I'm not too rapt about. Lately I think she's been making easy money from me, and not working hard for it... but I'm not wanting to change PM's just yet.

Does anyone here have an opinion about what she might be up to? Or any questions I should be asking her at this point?

Thanks,
Luke

 

[duncan_m]

Hi Gang,

Does anyone here have an opinion about what she might be up to? Or any questions I should be asking her at this point?

Thanks,
Luke

Luke,

Odds on, the Agency is being sold. The only, nearly, tangible asset in a Real Estate Office is the Rent Roll, and only those properties that are securely covered by a management agreement are included in this value.. The value of each Property, in SA, is around $1000.

The other possibility is that the PM is about to be changed. They want their owners locked in case they hire someone you dont like.

Dont sign! If you dont like the new owners or PM you'll be locked in.

 

[geoffw]

I'd be checking out why too. Dunc's got a few good ideas there.

If it's a solid tenant with a good payment record perhaps you would prefer a self manage. It's not something I wanted to do- but the one property I'm doing has been going OK. Perhaps two emails and one phone call a week.

If the tenant changes, you can pay a PM to choose a tenant, or (optionally) to take up PM of the property again.

 

[crest133]

Duncan & GeoffW are on the money. While she's so desperate, may be a good opportunity to negotiate better terms and a lower price. Notice period should only be 30 days anyway. Why not include the clause that the MA agreement only applies to current REA ownership. ? Wonder if they're borrowing against the rent roll ? can you do that ? hope it runs smooth.
cheers
crest133

 

[Luke]

Great insights

Thank you all, and particularly Duncan.
I appreciate the insights. I'll be making an appointment to see her later this week and will see what turns up.

I'll let you know,
Thanks again!
Luke

 

[investorgirl]

Luke, what you are describing is exactly what happened to me a few years ago, and Duncan is right - they were selling their rent roll. As soon as I found out I kicked up merry hell and cancelled my contract with the agency, and luckily they accepted this. You go to the trouble of selecting a particular agency/property manager, and then they sell the rights to manage your property to someone entirely different .. I totally disagree with this. And when you've got a few properties with them and they are getting roughly $1,000 for each one, well that just rubs salt into the wound. Don;t sign anything until you know exactly what is going on, make sure you retain control over who you chose to manage your property. investorgirl

 

[Luke]

Follow up

Thanks everyone for your great responses. THey were lots of help, and right on the money.

I tried to meet her last week, but she wasn't answering the phone... today she has rung me to advise that she has passed on her rent roll to another agent.

She sounded incredibly sick, and told me it was health reasons why. Which now makes me annoyed that she couldn't have been honest enough to tell me in the first place. Instead she kept insisting that it was for legislative change reasons... something the REIV denied, and which events have proved also.

Now I have to decide if I go it on my own or not. We'll see.
Thanks again,

Luke

 

[geoffw]

Duncan had it on the money then

All the best with your next big decision.