Can I switch management companies while my apartment is occupied by a tenant?
November 27th, 2014

Reveal the truth behind 5 popular misconceptions.

The answer is obviously YES. However some property managers facing replacement can try to convince you otherwise.

Let’s see some frequencies – but incorrect - objecting property managers may tell you why you can’t move to another company while there is a tenant in the apartment.

“I am your authorized representative towards the tenant”

Yes. Still…, but not forever.  You remain the owner of the flat legally. The management company or any rental agent is only an authorized representative who acts on your behalf. You can recall your authorization any time and appoint someone else.

“I referred the tenant to you” (ie. “The tenant is mine”)

Yes, but the tenant is not the “possession” of the agent or management firm. You paid for the service paying the finder’s fee (agent commission) when the lease was signed. The ongoing management and the one off rental service are two different services.

“The tenant signed the agreement with me”

In a proper lease agreement two parties are legally connected: you as property owner, and the tenant. The property manager is only mentioned as the authorized representative of the owner – who was that at the time of the signing. However the Landlord has the right to recall the authorization of an agent and give the power to another. You can do it without influencing the legal relationship between you and the tenant.

The only exception is if your actual tenant is your property manager who sublet the apartment to a third party. In that case you have to check your lease agreement, which you have with your agent and check the termination options.

“The tenant does not want to switch property managers”

Yes, because your agent already slandered your new choice. Anyway, it is your decision and your right to appoint a new representative. By the way the tenant will be happy as well with a better service in the end of the day.

“The tenant will move out if you switch.” (ie.“I will move the tenant to another apartment I am managing”)

Your property manager simply cannot afford it legally. If you have a signed lease agreement for a definite term than the tenant cannot terminate, because you switch your representative. However, if the tenant would terminate the agreement he/she will lose the security deposit as normal. This is the very reason why you always need to have a copy of your lease agreement with the current tenant.

As an example, Tower-International took over many (nearly all) apartments from other agencies with sitting tenants without problems.