4. Transition Packet Checklist. Excluding some specific state requirements, a general checklist includes: A. Copies of the lease with any relevant addenda B. Tenant contact information C. A list of open charges D. A complete transaction history for the tenant E. A copy of the tenant’s move-in inspection F. All keys and remotes for the property G. Any open demands and notices (from either the landlord or the tenant) H. Any other relevant documents to the tenant’s lease 5. Security Deposits. These should be paid as individual checks for each tenant at closing. It provides a clear audit trail should any issues arise before, during, or after closing or transition. This allows the current owner/property manager to clearly show the tenant that his/her security funds have been transferred to the new owner/manager. An extra step would be to make a copy of the check and provide it to the tenant at the time of the transition. 6. Outstanding Vendor Invoices. Coordinate with the new management company to ensure there is a clear understanding of all outstanding invoices. Any outstanding vendor invoice should be addressed as an item for payment. The former management company needs to provide these invoices to the new manager (or, in the case of a sale of rental property, to the title company) in a timely manner to meet the closing timelines. 7. Transfer of Utilities. Utilities are and always will be a challenge when transferring management of a property. If closings go well and there is good communication between the parties, utility transfers go smoothly. If there is friction at closing, these matters should be explicitly written with a clear understanding of how they will be resolved. Whenever possible, a final meter reading should be taken and an amicable/negotiated pro-ration needs to be determined. Someone, either the seller or
buyer, will incur a cost. The new owner must contact the utility company and establish a landlord account for the property, even if the services are currently in the tenant’s name. 8. Transfer of Services. Vendors who provide trash, internet, and washer/dryer services, landscaping, fire extinguisher checks, locks, and housekeeping must all be notified. Often, services that occur on a quarterly or annual basis (e.g., sprinkler services) are overlooked and a vendor performs services on schedule only to find out the property was transitioned. Many of these contracts are difficult to break without a significant lead time. They need to be addressed as part of the closing in the case of selling a rental property. 9. Distribution of Rents. Pro-ration of received rents and paid management fees need to be part of closing. Clear communication is essential and strongly recommended to be put in writing. 10. Transferring Tenants Under Eviction or Other Ongoing Legal Actions. Closing or transfer may occur when a tenant is in the process of moving or eviction. This should be considered at time of closing so that all parties are aware of current ongoing actions. Again, as part of any transition package, the old management should include any open demands and notices (from either the landlord or the tenant) to the new management. Once the ownership has transferred, the current property manager becomes the past property manager (unless a new management agreement is signed) and does not have the authority to conduct any further actions with the tenants or the property. Transitioning property management is only difficult when we let our emotions get involved. Meet this task like every other property management task and do it professionally. •
CoL(R) Scott Glascock, RMP®, MPM® Candidate, is a retired, 30-year combat veteran who now owns All County Property Management–Colorado Springs, Prestige Property Management, Tucson, and Mesa Property Management– Mesa, AZ. He is a member of the National Association of Residential Property Managers® (NARPM). Members of NARPM® receive information like this article every month through its news magazine, Residential Resource. To join or learn more, visit NARPM.org/join.
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