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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33708
Experience:  15 years real estate, Realtor. Landlord 26 years
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If a person purchased a residential rental 4 plex, which was

Customer Question

If a person purchased a residential rental 4 plex, which was being property managed by a real estate firm would the purchaser have the right to manage the property themselves or give it to another property manager at close of escrow?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Arizona
JA: Has any paperwork been filed?
Customer: The 4 plex has been sold and closed escrow Weds Nov 2, 2016. Purchaser was told by the current property manager that they have a contract for 6 more months and they have all the deposits so their contract is not over for 6 months.
JA: Anything else you want the lawyer to know before I connect you?
Customer: I would just like to know if the purchaser can choose their own property manager now or do they have to leave it with the current property manager?
Submitted: 28 days ago.
Category: Real Estate Law
Expert:  Barrister replied 28 days ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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The contract with the previous owner is a personal services contract to manage the property. If the former owner no longer owns the property, then any termination is between the old owner and the property manager as to any cancellation fees. There is usually some clause in the contract that requires the owner to pay some set fee if they terminate early.

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So since the new owner is not under any contract with the property management company, they are free to terminate the contract and demand the transfer of any security deposits held by the management company.

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If the management company refuses to return the deposits, then the new owner will have to file suit in court to get a judge to order them to transfer the deposits under a "conversion claim" which is where one party is illegally withholding the personal property of another.

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I would just like to know if the purchaser can choose their own property manager now or do they have to leave it with the current property manager?

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So yes, since there is no "privity of contract" between the new owner and the old management company, the new owner is free to terminate the contract and find their own new management company or do so themselves.

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thanks

Barrister

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