Have you ever wondered what might happen if you desired to dissolve an agency agreement? Many people believe that the contracts constructed between the owner of a property and their agency are unbreakable and immutable. However, this is far from being the case. It is possible to terminate an agency agreement under certain circumstances and by following the proper protocol.
Make sure that you know all of the possible scenarios and outcomes in the event that you need to terminate an agreement. Take a closer look at this basic outline for how an agreement can be ended by both parties, one party, or by operation of the law.
Termination by Both Parties
While either party can set this into motion, a termination by both parties comes about when everyone is willing to agree that the agreement should be dissolved. The mutual consent found in this type of dissolution makes the entire process much simpler. It may also mean that the contract will end because the agency completed the work it was hired to do or the timeframe for which they were hired has finally run out.
Termination by One Party
This is a slightly more complicated way to go about terminating your work with a property management company. An owner of the property can attempt to revoke the agreement at any time with just cause, but they may still be liable for some of the terms. Without a just cause, the owner could still find themselves on the hook for the service fees that the brokerage was counting on or reimbursement for expenses.
On the other hand, the agent might be the one to decide to revoke the contract if the property owner is being uncooperative. This might mean that they aren’t willing to sign off on repair work, make the house available for showings, or lower the rent price to something that fits into market value. Similar to what would happen to the owner, the agent may be responsible for damages if there was no just cause to revoke the contract. Of course, this is a very subjective thing to determine.
Termination by Operation of Law
The final way that a contract agreement can become null and void is through operation of the law. Contracts may be considered void if either party dies, is declared insane, or if there is a major change in the law that would render the contract illegal. Death can be a little tricky to work with because it doesn’t always mean that the contract will be dissolved. It could continue if either party is an entity like a trust or a limited partnership instead of a single person. Insanity would limit the contractual capacity of at least one party, making the agreement incapable of being enforced. Last but not least, if a contract is illegal, it automatically becomes void.
Once you enter into a relationship with an agency, their responsibilities to you do not simply end. Even if the contract is terminated, they may still hold certain obligations to continue to act in your best interest. Make sure you know what your rights are when it comes to termination of agency. It helps to work with one of the top commercial property management agencies in the area. Contact Pyramis Company today for all of your property management needs!