Changing Property Management Companies – St. Louis Property Management Advice

Ask longtime St. Louis property owners the secret to their success, and many will mention working with a property management company they trust. They have seen their share of ups and downs, working with both property managers who let their investments become rundown and with those who added tremendous value from day one. Experienced property owners say changing property management companies has solved many problems.

That said, property owners are also advised to do their research before making a change in management companies. Once the research is done, property owners should get ready to tackle challenges related to planning, recordkeeping, and communication.

Top Reasons for Changing Property Management Companies

Before changing property management companies, smart property owners run through a checklist of what is wrong with their current company. Some of the most prevalent issues property owners have with management companies include:

• Increased or unexpected fees. All fees should be spelled out in a contract, and should be consistent  For example, property management costs are consistent for all Select Leasing & Management clients: 10% of the rent per unit.
• Inconsistent screening of tenants. When property managers skip screening of tenants, St. Louis property owners end up with renters who cannot pay on time, evictions, and sometimes, problems with renters with criminal backgrounds. 
• Tenant complaints that are ignored. Tenants who do not have their complaints addressed may not renew their leases.
• Outdated systems. Both property owners and tenants expect to do business online. Many property management companies have online portals where tenants pay their rent, receive messages, and request maintenance, including Select Leasing & Management. 



Property owners also lose faith in their property management company when the property falls into disrepair, there is crime or vandalism, or communication from the company is lacking. Owners want and need regular reports from their property management company.

Steps for a Smooth Transition when Changing Property Management Companies

Once a property owner decides to change property management companies, they do a search and talk with company representatives. They consider how the property management companies address maintenance, tenant relations, rent collection, and more. 

Before committing to a new property management company, property owners need answers about how to time the change:

• When does the agreement with their current management company expire?
• Does the agreement include a clause for early termination? If it does, what are the potential costs of ending the contract early? 

After the owner reaches an agreement with a new property management company, the process of transferring records and materials to the new company begins. The new property management company is responsible for requesting and confirming receipt of key documents. In addition to keys for all units, property managers should ask for:

Tenant information:

• A list of the names, emails, and phone numbers of all tenants,
• All lease documents,
• Applications submitted by current tenants,
• Inspections of units when tenants moved in and any records of annual inspections,
• Any important communication with tenants.

Maintenance: 

• A list of open maintenance requests and the status,
• Past requests for maintenance by date,
• Documentation and photos related to the condition of individual units, and
• Records of purchase dates of appliances on the property.

Financial records:

• Tenants’ payment history and any balances they owe, 
• How much tenants paid for security deposits,
• Prorated rent due to new owners based on when the property transfer occurs, 
• Number of vacant units, and
• The pipeline of new tenants. 

When property management companies do not transfer records to a new property manager, doing business becomes more difficult. For example, when tenants move out they expect to receive their security deposit back if they leave the unit in good condition. A new property management company needs a copy of a signed walk-through with the condition the unit was in when the tenant moved in. Without it, property managers are in a bind. They do not know how much of the security deposit to return to the tenant. 

Let Tenants Know About Changing Property Management

Tenants often react with fear when they learn a new company is buying the property. They worry about rent going up, changes in the conditions of their lease, or even demands for them to move out. Smooth the transition with communication. First, ask the prior management to tell tenants about the change in management. Then, the property owner needs to communicate with tenants, reassuring them that although management is changing, their leases are remaining intact. 

A letter from the property owner needs to include:

• A statement about the new property management company with its name and address.
• A copy of the tenants’ lease.
• The tenants’ monthly payment and a statement that the terms of the lease continue through the end of their lease term. 
• The amount of their security deposit, which was transferred to the new owner.
• Where to send rent payments, maintenance requests, and messages. 

End a letter to tenants with a concluding statement about the property management company’s excellent service and commitment to the quality of the property.

Setting Expectations for a New Property Management Company

Property owners are in a great position to get more of what they want out of their investment when they change property management companies. Communicating their expectations sets the tone for a fruitful relationship. Follow these steps during the first 90 days with a new property manager:

1. Tell the new property manager, in detail, why they switched companies. 
2. Lay out their expectations and the consequences if they are not met.
3. Agree upon grace periods and evictions.
4. Plan regular communication to see how the transition is going. 
5. Address any problems before they become a major issue. 

Many property management companies make regular reports to owners on finances, maintenance, vacancies, work order completion, and more. 

In St. Louis, Select Leasing & Management exceeds expectations for residential property management on a daily basis. We provide comprehensive property management services using the latest technology, including an online portal system. Give us a call today at 314-835-6002 or start the conversation online. We look forward to seeing how we may be of service to you.

This piece was originally published on June 5, 2018.

Cover photo by ALotOfPeople on Canva.com