Property management changeover
(updated on Monday, May 02nd 2016)
I had my rental property with real estate company A (rent guaranteed contract) and they sold their rent roll to real estate Company B (during our contract period) while Company A still owed us some rent. Now Company B refuses to take over the contract we signed with Company A, and has asked us to sign a new contract with them - although they are actually managing the property for us now. Does Company B have to take over all the rights and obligations of Company A during the original contract period? Where do I stand ?
Our Experts Answer:
It depends on the agreement that you signed with Company A whether it would be honoured and enforced by Company B in the event of a sale. If the agreement bound you to Company A and its successor and assigns (or something similar), then the original contract would have envisaged that you could be bound to Company B in the event that the rent roll is sold. In turn, Company B would be bound by the terms of that agreement.
However, you have stated that Company B refuses to honour the agreement. This indicates that they don’t expect you to be bound by it either. You mention that Company B has been managing your property since the hand-over of the rent roll. You don’t mention how long that has been going on. If only a short while, perhaps the company has been in “catch-up”, replacing a number of other contracts. That is understandable if the other contracts also contained a rent guarantee clause.
You have a couple of options for the ongoing management. You could sign a new agreement with Company B if you are happy to accept their new terms. Alternatively, if Company B doesn’t consider you bound to the earlier agreement, you can take your business elsewhere to a different property manager. Regardless of the ongoing management, if Company A still owes you money under your original management agreement, then you should claim it from Company A.
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