Do You Have to Pay a Real Estate Management Company if Home Isn't Approved for Rental

[ssei95]

My question involves landlord-tenant law in the State of: Minnesota

I was in the process of renting out my house since I moved states recently. I engaged a reputable tenant placement company to find me a tenant. They did that just fine, maybe too good actually.

They found a tenant about 3 days after I signed them on. The problem starts because I didn't have my city issued license yet. I made that very clear to the agent multiple times that it was still being pursued.

When they sent me the lease for the tenant I asked them (on the phone, not in writing)what about the city inspection? What happens if things come back on it? They said "oh, don't even worry about that." So I signed the agreement to keep things moving along since the agent was really pushing me to get the lease signed so they could finalize everything.

Now, right after the lease was signed, the city came back and listed off about $15k worth of repairs (most of it was a driveway replacement)that I can't afford by any stretch of the imagination. Because of that, I can't get the rental license and I can't rent out the house.

The agency is now saying that I still owe them 2 months rent (about $2500) for their services. This fee is also based on teh 3 year lease, which won't happen now.

Now in addition to this, the agreement I signed with them clearly states they are not to pursue any marketing or leases until all applicable permits are in place, such as the city one, which isn't.

Hooray for them for being proactive in finding a tenant, but based on the agreement it looks like they jumped the gun to get a leased signed before they were supposed to. Does this leave me financially liable in this situation for their fees?

[Mr. Knowitall]

Your obligation to your property manager is a matter of contract. If you hired them to find a tenant and agreed to compensate them for that service, without any qualification that you might balk at renting the premises if necessary repairs exceeded a certain threshold, then you agreed to compensate them for the services they have rendered.

What does your contract say?

[Browne]

You jumped the gun by renting your unit without an initial inspection. In Arizona, by law, you can't even do that. The Management company should have known that, but it's not their legal responsibility to tell you what to do in that regard. You as the owner should have known better.