We are familiar with advice on how to attract and keep clients, but sometimes things do not go exactly as planned in a business relationship. The more common scenario of a relationship gone bad is when the hired person (the Property Manager, in our case) is fired because they did not render services as expected. It is more unusual to hear of scenarios of the hired professional walking away from a client. We do not hear about these because ‘the client is always right’ and we are supposed to keep them satisfied. But what do you do when the client becomes a tyrant? You may decide that it is best to fire them.
HOW DO YOU RECOGNIZE BAD CLIENTS?
Firstly, let us define what we mean by client. The client is the person you are already working for, with whom you have an agreement with to work on a contractual basis. The threshold for firing a client is different for every working professional. However, there are some fundamental things that must be present and maintained in any working collaboration and some things that should not be tolerated.
Here are a few client types that might sound familiar:
The Unreachable Client: The client may be avoiding payment as they may be experiencing financial difficulties and may not know how to tell you. Repairs that are needed for the safety and wellbeing of residents must be done. Even less critical repairs should be completed to keep the property in good shape and to keep your good tenants happy. It is your reputation on the line, not the owner’s, so if an owner is not going to maintain the property, do not maintain them as a client.
The Overly Involved Client: You should not have to run every decision by your owners. You should not have to get permission on every repair if it is under your pre-authorized dollar limit. If an owner tries to micromanage your management of their property, cut them loose and find another owner client that appreciates your role. The other thing that should not be tolerated is the owner communicating directly with the tenants without your knowledge. This undermines your authority with the tenant when they know they can simply call the owner and discuss an issue.
So, How Do you Fire a Bad Client? The answer is Carefully!
Here are three suggestions for letting a client that is just not a good fit go. The goal is to avoid backlash; therefore, you must tell them in the most delicate manner –
- We are sorry we do not meet your expectations, but this is not a good fit for what YOU are looking for. Its acceptable to make yourself the ‘bad guy’ because you want the problem to go away.
- Our system is not a good fit for what you are needing, for instance, if the owner wants to be notified in advance of every maintenance request that is handled, our system is not equipped to provide this service. Again, you want them to walk away thinking it’s us not them.
- We are reducing the number of doors /properties we manage in a given geographic location – it is not you, it’s not your property, we are simply reducing the scope of our services in a particular area.
Alternatives to Firing a Bad Owner Client:
- If you have a difficult Owner, you can opt to increase Management Fees to a sum that is worth the effort and hassle for you. If you push that Management Fee to a point that they are unwilling to pay, they voluntarily terminate the relationship which is a better outcome for us. They are letting you go, so they are in control!
A typical Clause that can be used when increasing a Management Fee – in the last year we have experienced a significant increase in the cost of our operations. In order for us to continue to provide you with a high level of service, and after thoughtful consideration on our part, it was necessary to increase the Management Fee on your property. This clause should be timed with the term of your management agreement so that it is an acceptable explanation.
Above all, remain calm and maintain your professionalism and integrity. These are easy ways to relieve yourself of the bad owners and at least get compensated effectively for those difficult owners.