Question related to terminating a property management contract

[manoc]

Jurisdiction

Indiana

Hi Folks

I currently have a contract with a property management company to manage my property. The tenant just moved out at the end of his lease on 6/30 & the PM is in the process of fixing up the property to re-lease it again. I've had a lot of issues with my PM related to lack of communication, timely response, etc. and am looking at terminating the contract.

Here are the relevant sections from the contract:

"Owner hereby employs Agent to rent and manage the property. Upon the terms
hereinafter set forth for a period of(1) year on or until expiration of lease agreement"

"Either party may terminate this agreement at the end of the contract period by giving 30 day written notice. Failure to give written notice of cancellation by either party shall renew this agreement for a like period under the same terms and conditions."

Couple of questions:

1. Did my contract just get renewed for another year till 6/30/20?
2. Since there is no mention of paying any penalty for terminating the contract, can I terminate the contract by just giving the 30 day notice?

Thank you in advance

Mano

 

[PayrollHRGuy]

1. Yep.
2. You can certainly try. At worst they will come up with something somewhere else in the contract and you can back down.

 

[mightymoose]

If there is no new tenant and no new lease agreement I would expect you could cancel it now. Give them 30 days notice and instructions to not rent the propery in the interim pending new management.

 

[zddoodah]

"Owner hereby employs Agent to rent and manage the property. Upon the terms
hereinafter set forth for a period of(1) year on or until expiration of lease agreement"

Are you sure this is an accurate quote? What does "(1) year on" mean?

"Either party may terminate this agreement at the end of the contract period by giving 30 day written notice. Failure to give written notice of cancellation by either party shall renew this agreement for a like period under the same terms and conditions."

FWIW, this is ambiguous. It is common for a contract of this sort to say it's in effect from MM/DD/YY until MM/DD/YY+1, that the term of the contract will renew for successive one year terms unless cancelled, and that the contract may be cancelled by giving notice no later than 30 days before the expiration of the current term. Your contract has similar language, but it's not clear by when you have to give the notice.

Did my contract just get renewed for another year till 6/30/20?

I don't know. What was the original term of the contract? And are we safe in assuming you have not yet given any notice to terminate?

Since there is no mention of paying any penalty for terminating the contract, can I terminate the contract by just giving the 30 day notice?

You can do that, but you'll likely get sued for breach (assuming your termination was not in compliance with the terms of the contract), and the other party likely would win. It is not necessary for a contract to "mention . . . paying [a] penalty." A non-breaching party is always entitled to recover damages from a breaching party. Please do not follow the suggestion in the prior response without consulting a local attorney. The lack of a new tenant is of no relevance to this issue (unless the management contract, which none of us have read, says otherwise).

 

[mightymoose]

The lack of a new tenant could matter.
If the contract says the agreement ends at the expiration of the lease agreement, at what point does it renew?
Instructing the company to not rent the property to a new tenant may keep them from renewing another year and allow opportunity to exit.