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Should I fire my property manager? (and how to do it)

22 December 2017

Photo: Old House Villa, Mangere, Auckland by GPS 56

Not happy with how your investment property is being managed? Think that you’re not getting value for money or a fair return on your investment? It might be time to reconsider your choice of property manager.

Should I fire my property manager?

Buying and managing an investment property is ultimately a business decision. As such, you should carefully consider whether your property manager is providing a service that best serves your investment. Use our handy guide to make the best decisions for your investment property.

Are you getting value for money on your investment? Are you getting a meaningful return on the property management fees?

The most important job for your property manager is to maximise the return on your investment. This means finding reliable tenants paying rent at the market rate (or above) for your property. There might be any number of reasons why your property manager can’t find good tenants or why the rent is below the market average, but remember: your property manager is never going to blame themselves! Consider whether a different management option might be better.

Most traditional property management contracts take 7-10% of rent in fees for residential properties. Think about whether the extent and quality of service provided is actually worth that amount. Is the property manager providing a high-quality, professional service that delivers a steady income stream with little effort on your part? Or do they take their fees for granted and barely reduce the workload you’d have if you self-managed?

Is the property manager acting in your best interests?

While it may seem obvious that a property manager is acting in your best interests, it’s worth really questioning whether this is always true. Most property managers recognise the importance of their responsibility as custodians of your investment. However, sometimes their interests will conflict with yours - spending time and effort to solve complex tenancy issues might be in your interests, but it will not always be the first priority for property managers.

If it’s practicable, you should consider self-managing your property. After all, no one will be better understand and represent your interests than you.

Are you receiving all relevant information from your property manager?

Property managers should communicate all relevant and important information to you so you can make fully informed decisions regarding your investment. If you’re not hearing everything about critical aspects of your property, then you cannot be sure that your best interests will be followed.

Some of the key information that should be communicated thoroughly and promptly to you includes:

  • All applications made by prospective tenants.
  • Any maintenance or repairs issues, especially if the landlord will incur costs.
  • Reports and feedback from inspections.
  • Significant issues regarding the tenancy agreement - e.g. renewals, termination etc.

Is your property manager responsive and pro-active?

Your property manager should be very responsive and helpful whenever you make contact. If you find yourself having to call, email, or text multiple times just to get a response, then it may be time to explore other options.

Your property manager should also be making regular inquiries with the tenant and conducting inspections. They should also be providing you with regular updates about the property and the tenancy without you having to ask.

Does your property manager know their legal obligations as your agent under the Residential Tenancies Act? Do they meet those obligations?

Your property manager is your agent in meeting your obligations under the Residential Tenancies Act. As professionals, they should have a strong working knowledge of the relevant laws and regulations and have strict compliance with them as their foremost priority. Asking just a few simple questions about the law can help you determine how strong their knowledge and compliance is.

Though it may seem complex, understanding your obligations under tenancy law is relatively simple if you are willing to spend a little time making yourself familiar with them. The Tenancy Services website is very helpful in providing a plain English explanation of the law. This means that self-managing your tenancy is not impossible, and you certainly don’t need a law degree or property management qualification to easily meet the legal requirements.

Did your property manager find good tenants? Could you do a better and quicker job?

While there is probably no such thing as the perfect tenants, one of the most important responsibilities of a property manager is to find reputable and reliable tenants. If your property manager has consistently underperformed in this respect, it may be time to look elsewhere. With a little effort and money spent, you’ll probably be able to find better tenants by conducting the process yourself.

Is there a better alternative?

If there is a better alternative to your current management situation, it may be worth trying it out. Maybe you’ve found a better or less expensive property manager? Or maybe you’ve realised that managing your own property is not as difficult and time consuming as it may seem, especially when you use a helpful and effective service like

How to fire your property manager

So, you’ve decided it might be time to give your property manager the flick? Before you go ahead and terminate the management contract, there are some important matters you’ll need to consider.

Check the terms of your property management agreement

First and foremost, you must look at the terms of your contract with your property manager. Every property management contract is different - there are no set or standard terms. Therefore, you should carefully review your contract, and especially the terms regarding when and how the contract may be terminated.

Important: If you seek to terminate in a way that is not permitted by the contract, then you may be in breach and therefore liable to compensate the property manager for losses they incur as a result.

In particular, you should look for, and take note of, the following terms:

  • Reason for Termination - Some contracts will list specific circumstances or procedures as being the only way that the property management arrangement can be terminated before the end of the relevant term. If this is the case, you’ll need to determine whether your reason for termination falls within these terms. If not, it may be a better option to simply wait until the expiry of the contract at the listed termination date.
  • Breaches of the Contract - If you think that your property manager has breached the contract and you are relying upon that breach as the grounds for termination, you should carefully consider the nature of the apparent breach and the relevant term of the contract. Can you point to a particular term of the contract they have clearly breached? Do you have evidence of that breach? Is the breached term central or key to the contract, or is it relatively insignificant? Is the breach serious and does it go to the core or purpose of the contract? Even if the property manager has clearly breached the contract, if the term breached is not key or the breach is relatively minor, then you may not be justified in trying to terminate.
  • Notice Periods - Most property management contracts will have a minimum notice period for termination by either party. This is usually somewhere between 30 and 90 days. Make sure that you abide by these periods when giving notice of termination.
  • Fees - Some property management contracts may charge fees for early termination. Provided these fees are not excessive, you should consider whether simply paying the fee is worth it to terminate the contract before time.
  • Auto-renewal - Many property management contracts are tied to and correspond with the fixed term of the tenancy agreement. They may also have a term that the contract automatically renews after the end of the initial period if neither party terminates in time. If you want to terminate at the end of the initial term, make sure you aren’t caught out by an auto-renew term.
Negotiate an early termination?

You may find after reviewing your contract that you are not able to terminate as soon as you might want. That doesn’t necessarily mean you are locked in though. You should talk to your property manager and request an early termination. If you present your reasons clearly, you may be able to agree to an early termination. You should consider whether you would be willing to pay a small fee to end the contract early. An agreement to end the contract early should be recorded in writing and signed by both parties.

Give the correct notice

Make sure you give the correct period of notice (usually 30-90 days, but check your contract) and give notice in the correct form. Good practice is to always provide written notice for your own records and those of the property manager.

Terminate the agreement in writing

Even if you call your property manager or meet them in person to terminate the contract, you should also send a written notice. This will provide a helpful, permanent point of reference for you and the property manager.

Some of the key points to include in the notice are:

  • The date on which notice is given.
  • The date on which the property manager no longer has responsibility for the property and ceases to be your agent.
  • Date of the final rent payment that the property manager should collect on your behalf.
  • Any information about transferring information or responsibility to you or a new property manager.

Plan ahead: setup your new property management arrangement in advance

Before you commit to terminating your existing property manager, ensure that you have an alternate property management arrangement ready to go. This means being prepared to start self-management using a service like myRent (sign up here!), or having your new property manager ready to take over the property as soon as possible.

Keep it cordial - all business!

Ending any long-term business relationship can be difficult. But remember, it’s just that: business! Keep things cordial and professional when letting go of a property manager. Even if they’ve done a bad job, there’s no reason to get angry and accusatory. If you keep it short and polite, they should afford you the same courtesy.

Inform the tenants of the change

You must inform the tenants of a change in property management as soon as possible. This should be done by written notice informing the tenant of the contact details of the new manager (or your details if self-managing), changes in rent payment details, and the exact date when responsibility for management switches over.

Gather all information and paperwork from the property manager

Make sure that you obtain all the documentation and information relating to the tenancy from your current property manager. This might include the tenancy agreement, rent receipts, records of repairs and maintenance, etc.

The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. does not accept any liability that may arise from the use of this information.

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What the community has to say
  • CC

    I have used property managers in the past and they were universally bad. The last one I used allowed the tenant to operate a business in my house, which is not allowed by insurance. I would only use them again if I was overseas and unable to do it myself.

  • SH

    I haven't had great experiences with property managers as both a tenant and landlord. As a tenant, i found a couple lazy and often not returning phone calls or getting the right person first time. I also found them uncaring. As a landlord, I find it crazy how they charge. If you have a high risk tenancy in a low-income area, they get paid a smaller sum than in a low risk high-income area. It should be the other way around? There is more work involved in looking after properties where social issues can affect rental collection than higher income areas.

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