What happens to my rental if the management company goes out of business?

Your rental does not go anywhere when the management company closes. If you own a rental in Fort Worth, Keller or North Richland Hills, the lease with your tenant is still a valid contract, the house is still yours, and the rent and the security deposit are still accounted to you. What ends is the management agreement, and with it the company's authority to collect rent, hold funds, order repairs and speak for you.

The practical problem is what the company was holding for you. This guide lists what to ask for and in what order, what Texas law says about that money, and how to tell a closing from a sale. The full guide to a manager closing or selling covers the longer version.

What to get back when a property management company closes

These are the items a closed company was holding for you, why each one matters and what to do if it does not arrive:

How to read this table: work from the top. The first two rows are money and the most urgent; the rest are records you can rebuild if you have to. Put all seven in one written request with a deadline, so there is a dated record of what you asked for.

The lease survives, the management agreement does not

A Texas residential lease is a contract between the owner and the tenant. The manager signs it as your agent, which is why the tenant's obligations run to you, not to the company. If the company disappears, the tenant still owes rent on the first, still has to give notice to move out, and still has the right to the quiet use of the house until the lease ends.

The management agreement is a separate contract between you and the company. Read its termination clause: many agreements let you end the contract for breach, and a company that has stopped collecting rent and answering you is not performing. Send written notice anyway, to the address in the agreement and to the broker's email, so there is a dated record of the end.

One consequence owners miss: until you or a new manager tells the tenant where to pay, the tenant will keep paying the old portal. Each rent payment that lands in a closed company's account is harder to recover than the last.

Where the risk actually sits: money the company holds

Managing rental property for others is real estate brokerage in Texas, so the company works under a broker's license. Texas Real Estate Commission rule 535.146 defines rent and security deposits held for someone else as trust money. A broker must keep it in a designated trust account and may not mix it with personal or operating funds. That separation is what protects your deposit and your reserve when a company fails. Whether the money was kept that way is what you find out when a company closes badly.

Three balances matter, in this order:

• The security deposit. You remain the landlord, and the landlord must refund the deposit within 30 days after the tenant surrenders the house (Property Code 92.103). Get a written statement of the balance and ask for its transfer first.
• Your reserve, the repair float the company held for you. Ask for the balance and the final statement that shows what it was spent on.
• Rent in transit, meaning rent the tenant paid this month that has not been sent to you yet. Ask for the date it was received and the date it will be paid out.

The same rule gives you a deadline to quote: after a written demand, a broker must pay trust money to the party entitled to it within a reasonable time, which the Commission sets at no later than the 30th day after the demand. A broker must also keep trust account records for four years, so the paperwork should exist even if the office is closed.

If the money is not returned

The broker named on the agreement is who you pursue, and a business entity's designated broker answers with it. Under Occupations Code 1101.652(b), failing to account for or remit money that belongs to another person within a reasonable time, and commingling it with the broker's own money, are grounds for the Commission to suspend or revoke the license. Section 1101.652(a)(5) adds failing to surrender a document the owner requests.

A complaint to the Texas Real Estate Commission is filed in writing through its online portal, with your name and copies of the agreement, statements and emails. The Commission says it cannot investigate an incident that is four or more years old, and it cannot order a license holder to pay you damages. Money is recovered in court.

That account is a last resort, not a refund desk. You first need a court judgment against the license holder for conduct covered by section 1101.602, and you must show the judgment could not be collected (1101.606). The suit has to be filed within two years after the claim arises (1101.605). If many owners claim against the same broker, the court reduces each payment proportionately (1101.610(c)). This is general information, not legal advice. For a large unreturned balance, talk to an attorney early.

What to do in the first week

Work the list in order. Each step closes off a way to lose money or control.

1. Send written termination to the company and keep a copy. Cite the termination clause and request the seven items in the table above by a stated date. Send it to the address in the agreement and to the broker's email.
2. Write to your tenant the same day. Confirm the lease is unchanged, name the new payee and address for rent, and give one phone number for repairs. Until a new manager is in place, that number is yours.
3. Rekey the house if you cannot confirm who holds keys, and give the tenant the new key the same day. The cost is small next to an unknown key in circulation.
4. Call your insurance agent. If the company was named on your policy, confirm in writing that your landlord coverage stands on its own.
5. Pull your own records: bank deposits from the company, every owner statement you were emailed, and the signed lease. You may need to rebuild the ledger from your side.

One more notice matters. Property Code 92.201 lets a tenant ask who owns and who manages the home, and the answer is due in writing within seven days. Your letter in step 2 answers that before the tenant has to ask. If you plan to hire a new company, the guide to switching without interrupting rent payments shows how the payment change is timed.

A closing is different from a sale to another company

Many "the company is gone" situations are actually a sale. The owner of the company retires or sells the portfolio, and a different company starts emailing you as if nothing happened. In a sale, your agreement is usually assigned to the buyer, and whether that is allowed without your consent depends on the assignment clause you signed.

You are not obliged to stay. A sale is a fair moment to ask the buyer the same things you would ask any new manager: who holds the broker's license, where the deposit sits, what the fees are now, and a copy of the agreement they intend to work under. If the answers are vague, the assignment clause does not trap you. The termination clause still works.

In a true closing there is no buyer, and the broker still has to account for everyone's funds and hand back owners' documents. That is where speed matters. The owners who write first, with a specific list and a date, get served first.

What protects you before it ever happens

You cannot stop a company from failing, but you can make a failure cheap. The protection is in the agreement and in your habits.

• Confirm the deposit is held in a broker trust account, and that the monthly statement shows it. A company that holds deposits in its operating account is the one that cannot return them later.
• Keep the signed lease, the move-in condition report and every monthly statement in your own storage, not only in the company's portal. Portals go dark when companies do.
• Read the termination and assignment clauses before signing. A short notice period and a right to terminate for breach are what let you leave quickly.
• Know who the broker is. A broker-owned company has one licensed person whose name is on the agreement and who answers for it. That is the person the regulator holds responsible.

The agreement checklist covers those clauses in detail, and the guide to how your money flows through a manager shows what a clean monthly statement looks like.

One habit costs nothing: once a year, look up the broker in the Commission's License Holder Search and confirm the license is active. Related reading: how to know your rent and deposit money is protected and what to do when an old manager will not release keys or records.

How Perpetual handles this

Perpetual Property Management is broker-owned. Justin Brown is a Texas broker and owns both Perpetual Property Management and our affiliated brokerage, so there is one accountable license holder, not a franchise office or a corporate parent. Our office is at 5755 Rufe Snow Dr in North Richland Hills, and we manage homes in Keller, North Richland Hills, Fort Worth and nearby. You receive monthly statements, and the AppFolio owner portal holds your statements, documents and disbursement history. Download them as you go, which is what you would want if any company ever stopped operating.

When an owner comes to us from a company that closed or was sold, we work the way our switching page describes. We review the old agreement and its notice terms, request the lease, security deposit, keys, tenant ledger, property records and open work orders, and give the tenant new payment and maintenance instructions. Then we complete an enrollment inspection so there is a condition record from the day we start. Homes with a tenant already in place are a normal takeover for us.

Our plans are 10%, 9% or 7% of monthly rent, and if a fee is not in your management agreement, you do not pay it. How your deposit and reserve are held, the reserve amount and the termination terms are confirmed in writing before you sign. If your manager has gone quiet or closed, call 682-593-7033 and we will tell you what to request from the old company first.

The takeaway: The lease and the money are yours and the company only held them, so get the deposit, the ledger and the keys back in writing this week and put the tenant's next payment somewhere that is accounted for.

Questions owners ask

Property management in Keller, North Richland Hills and Fort Worth. How full-service management works in Tarrant County →