Can A Property Manager Raise Rents Without The Owners Consent?

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Can a property manager raise rents without owner’s consent?


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This is an interesting question. I had to read it twice because I expected it to be about whether rent can be raised without the tenant’s consent. To determine whether a property manager can raise rent without the owner’s consent, you should, as always seems to be the case in real estate, check your contract.

If you used a lawyer to negotiate a contract with a property manager hopefully there is a clause that requires your express permission before raising rent or other user fees associated with the property. If you used a standard contract presented to you by the property manager (as may be the case with a professional property management company), then the contract very well might allow the manager to raise rent and other fees without your consent. If you signed the contract, you’re stuck with the terms.

However, if such a term is present in your contract, it probably only allows for reasonable increases in rent. Reasonable may include increases to cover the property manager’s increasing costs. If the term doesn’t mention anything about reasonable increases, proceed as if it does. Contract law reads reasonable behavior into all contracts, so tell the property manager you expect increases to be reasonable and define reasonable.

If it still seems like too much of a hassle, then you can fire the property manager. Review the contract carefully first because doing so may cause a breach of contract on your part. Even if it doesn’t cause a breach, you may have to do something like pay off the rest of the term of the contract. If you are considering terminating the contract, seek legal counsel to make sure you don’t do anything that could cause you to be sued or pay excessive penalties under the contract.

If the contract is silent as to whether the property manager can raise rent without your consent, then you should probably contact an attorney because you’ll be in need of some legal research. The first place to look is your state statutes. All states have pretty detailed laws governing the conduct of real estate professionals, and property managers may be included in these statutes. If you find nothing in the statutes – and, really, it’s not likely – then the answer to whether a property manager can raise rental rates without your consent is no. You are the owner of the property, and, as such, you have certain rights which can only be exercised by others if you allow them to do so. You have delegated some of your rights to the property manager, but not all, and you presumably haven’t delegated the right to make a profit from your property. Again, you should probably see a lawyer about these issues as they can become pretty complex.

If you have no contract with the property manager at all, as is often the case with the management of small residential properties, then get a new property manager. And use a contract that spells out these terms expressly.

Answered almost 8 years ago
Anonymous

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