Changing Property Management Companies: What Owners Should Know

When is it time to change?

Owners rarely change managers over a single incident. More often it is a pattern:

• Reports that are late, incomplete or missing invoices.
• Expenses you did not approve.
• Questions about rent or funds that go unanswered.
• Slow or unclear communication with you or the tenant.
• A property whose condition is declining, or problems the tenant reports that nobody comes to look at.

If you recognize several of these, it is reasonable to explore alternatives. A change handled carefully should not disrupt a good tenant.

Start with your current agreement

Before you contact the tenant or give notice, read the management agreement closely and note:

• The notice period and how notice must be given (for example, in writing or by registered mail).
• Any termination fee, or any ongoing commission on tenants the manager placed.
• What the manager is required to hand over when the agreement ends.
• Who currently holds rent, reserve funds and the tenant’s security.
• Who signed the lease, and in what capacity. In many cases the lease is between you and the tenant, but check your documents.

These are contract questions. Have a qualified lawyer review the agreement and the lease before you act, so you know your obligations and the manager’s.

What needs to be handed over?

Use a written list and confirm each item as it is received:

• The lease and any addenda, extensions or side agreements.
• The tenant’s security: a cash deposit, bank guarantee, guarantor documents or other security, and a record of who holds each item. A bank guarantee names a beneficiary and has an expiry date, so check both; your lawyer can advise whether anything needs to be reissued.
• Keys, remotes and access codes, with a list of who holds copies.
• The move-in condition report, inventory and photos.
• A final financial statement to the handover date, and the return of any funds held on your behalf.
• Open maintenance items, including quotes, work in progress and warranties.
• Contractor and supplier contacts, appliance manuals and warranty documents.
• Account status for arnona (municipal property tax), utilities and va’ad bayit (building committee) fees, with current meter readings.
• Insurance policies relating to the property.

How should the tenant be told?

The tenant should hear about the change from you, in writing, before the handover date. The notice should say who the new point of contact is, from what date, and how and where rent should be paid from now on. Hearing it directly from the owner avoids confusion and gives the tenant confidence the change is genuine. If rent is paid by standing order or post-dated cheques, arrange how those will be updated.

When is the best time to switch?

• Close to the start of a rent period, so one month’s payment is not split between two managers.
• When no major repair is in progress, or with a clear agreement on who completes it.
• With a short overlap, so questions can be settled while both managers are still involved.

Step-by-step

1. Review the management agreement and the lease with a lawyer.
2. Choose the new manager and agree the scope of service in writing.
3. Give notice to the current manager as the agreement requires.
4. Agree a handover date and the list of items to be transferred.
5. Notify the tenant in writing.
6. Record the property’s condition with photos at handover, so the new manager starts from a documented condition.
7. Reconcile the final statement and confirm all funds and documents have been received.

How JTown Management handles this

We regularly take over properties from other managers and from owners who have been managing on their own. With your authorization, we coordinate the handover with the outgoing manager using a written checklist, record the property’s condition at handover with dated photos, check that arnona and utility accounts are up to date, and introduce ourselves to the tenant once you have notified them.

We also review the file we receive and let you know about anything missing, such as an expired guarantee or an undocumented repair, so you can decide how to deal with it.

Next step

Read how our property management service works, or Request a Property Assessment to discuss taking over your property from its current manager.