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Dissolving Property Management business... what to do?

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  • Dissolving Property Management business... what to do?

    We have a small property management business in Florida managing 5 residential properties and would like to dissolve our business. Our contract with the owners states we must give them a 60 day notification to do so. We want to do right by our clients - tenants and owners. What do we do about existing tenant contracts? Should new contracts between the owner (or new management company) and tenant be accomplished? Is there any time at which the security deposit should be passed on to the owner if they decide to personally manage thier property? Is it possible that we can be held liable for anything after terminating our contract?

  • #2
    re: Dissolving Property Management business... what to do?

    I wish to inform you that as stated in agreement you must give a 60 days notice. Further security of property will pass to new landlord as your functions will be performed by new landlord. You can take a letter from existing tenants that there is no dispute regarding dissolution of business and you will not be liable for any action. This may restrict right of tenant to take any action.

    AFF

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    • #3
      re: Dissolving Property Management business... what to do?

      Originally posted by Sunshined View Post
      We have a small property management business in Florida managing 5 residential properties and would like to dissolve our business. Our contract with the owners states we must give them a 60 day notification to do so. We want to do right by our clients - tenants and owners. What do we do about existing tenant contracts? Should new contracts between the owner (or new management company) and tenant be accomplished? Is there any time at which the security deposit should be passed on to the owner if they decide to personally manage thier property? Is it possible that we can be held liable for anything after terminating our contract?
      You must give the 60 days notice so the property owners may find another management firm to replace you.

      The owner is bound by the contracts you entered into in their name as their servants. As long as the contracts state you are managing for the owner, the contracts should not have to be renegotiated. A transfer of any such contracts, if made in the name of your management company can still be assigned to the new company that takes over for the owners.

      As to being held liable it is unlikely, especially if you assign the contracts to new management. You might wish to see an attorney in FLorida, with the contracts in hand so he or she may advise what language you need to use in the assignments to be held harmless.

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      • #4
        re: Dissolving Property Management business... what to do?

        Originally posted by AFFA View Post
        I wish to inform you that as stated in agreement you must give a 60 days notice. Further security of property will pass to new landlord as your functions will be performed by new landlord. You can take a letter from existing tenants that there is no dispute regarding dissolution of business and you will not be liable for any action. This may restrict right of tenant to take any action.

        AFF
        The "letter from existing tenants" about disputes is not only irregular, but unnecessary and in some instances if there was tortious conduct, illegal. Totally unnecessary and improper.

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