How does the termination of a rental management mandate work?

The termination of a rental management mandate obeys certain rules that the owner of a property must know. Indeed, the rupture can only be done according to certain very precise conditions. If you’re a homeowner and want to outsource the management of your property to another real estate professional or want to take over management, here’s how.

The different reasons for terminating the management mandate

A management mandate is a contract that two parties have signed. It’s about representative whose role is to manage the good and principal who is the legal owner of the asset. In this context, there are several reasons that can push the last appointed to want to break the contract.

Cancel on anniversary date

In most cases, the management contract includes what is called a term commitment clause that the principal is bound to respect. In general, the term of office is one or three years. To break this contract, it is mandatory to give notice of termination three months before the expiry date. However, it should be noted that the representative must notify the principal of the entry into the notice period up to three months before. If this is not done, the owner of the property can proceed with the termination without incurring any penalties.

Cancel if you have not been notified of the renewal

According to Châtel law, the property manager is required to warn the owner of the possibility of terminating the contract between 1 and 3 months before notice. The idea is to make it easier to monitor contracts that have been tacitly renewed.

However, if the agent does not respect this procedure as legislated, the owner is free to terminate the management mandate free of charge. No penalty will be imposed. To make the notification, the real estate agent must send a dedicated letter or email. This means that it cannot simply be limited to making a reminder on a management report. In order to justify the termination decision, the principal must refer to Article L136-1 of the Consumer Code.

Cancel for serious misconduct

In case of serious fault of the manager, the owner of the property can terminate the contract. However, this procedure is quite complicated due to the content of this term. To make it simpler, case law has identified certain facts which can be considered as serious misconduct. It’s about :

  • the breach of the agent’s obligation to request a joint surety from the tenant who is in a Fixed-Term Contract (CDD),
  • failure to verify that the supporting documents provided by the tenant are genuine,
  • of not ensuring that the tenant during the lease respects his obligations.

The manager for her part, has the possibility of contesting the allegations against her. In this specific case, it will be necessary to resort to arbitration by the tribunal.

Cancel to sell

The last reason for terminating a management mandate is termination to sell the property. It must be said that the potential purchaser is not affected by the contract between the current owner and the manager. This means that the contract ends when the property changes ownership. However, the law has not defined a termination penalty in this specific case. It is therefore up to the two parties to negotiate the terms of the rupture. It is possible that the owner entrusts the mandate of sale to the agent in return for termination without penalties. It is therefore advisable to insert in the contract, a clause specifying that the mandate ends automatically with the sale, and that without penalties.

A transparent transfer for the tenant

It should be noted that the fact of changing manager or taking over management has no impact on the contract between the owner and the tenant. This therefore means that the owner cannot take the opportunity to increase the amount of the rent or to terminate the lease. However, what the owner can do is:

  • ask the tenant to change the recipient of the rent,
  • keep the tenant informed of the contact details of the new agent who manages the property,
  • recover files that are in progress such as unpaid bills and claims.

In general, it is the new manager who must carry out the procedures. However, if the owner is himself, the manager, he will have to take care of these steps in person.

Unpaid rent insurance linked to the management contract

In general, the termination of a management contract is accompanied by that of the guarantee of unpaid rent that the previous manager accepted at the request of the owner. However, the latter has the possibility of subscribing to a new guarantee. In this context, it is important to emphasize that if a payment incident occurs during the period of non-coverage, it is impossible to subscribe to a new contract.

In addition, with regard to unpaid rent insurance, it must be said that there is a priori no eligibility criteria for the tenant. The only condition is no history of non-payment during the previous 6 months.

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