We recently came across a situation where a Residential Managing Agent had some very nasty clauses in their contract. We thought that we'd let you know some of the things that can catch out leaseholders if you're not careful.
The contract we saw (from a new client) stated that to terminate their agreement with their current Managing Agent, they had to give one months notice for poor service. That seems reasonable, but it then went on to say that if service hadn't improved at the end of the month, notice of termination could be served. This is where it got sneaky ...
Notice of termination would only become effective at the end of the quarter and then would only be effective at the end of the next quarter. This means, that a poorly-performing agent can keep hold of the business and continue to get paid for up to seven months.
We find this sort of contract to be completely unreasonable.
We spoke to the old agency to ask them why they needed such a long notice period and they claimed it's because there was "a lot to reconcile" at the end of a contract. Well, we can tell you that it's not the old agent that has to do this work, it's the new one.
If you are concerned that your current property manager may have you tied up like this, get in touch with us as there are definitely things that you can do to encourage them to release you within a more reasonable timeframe.