Ok Property Management Agreements
Stevens Realty
When entering into a property management agreement, it is crucial for both property owners and management companies to clearly understand the terms and conditions outlined in the contract. Such agreements serve as the foundational document that stipulates the responsibilities, fees, procedural details, and operational expectations for both parties. It ensures that property management is conducted professionally, adhering to legal standards while safeguarding the interests of the property owner.
Here’s a detailed look into several key aspects of a typical property management agreement, which addresses common queries that might arise before signing such a contract. This exploration aims to demystify terms, clarify processes, and provide transparency, enabling property owners to make informed decisions about managing their real estate investments.
Ok Property Management Agreements
1. How Easy Is It To Cancel The Agreement?
Terminating the agreement is straightforward. Either party—the property owner or the management company—can end the agreement with a 30-day written notice. This flexibility allows for termination without any stipulated penalties, which simplifies the process should the owner decide to change management companies or take over management themselves.
2. Are The Fees Hidden In the Agreement?
All fees related to property management are clearly listed in the agreement and its attached addenda, such as the 2023 Pricing Matrix and Schedule of Other Fees and Additional Information. These documents detail management fees, tenant fees, and other miscellaneous charges, ensuring transparency and preventing any hidden costs. This structure allows the property owner to be fully aware of all potential costs upfront.
3. How Much Money Do I Have To Place In Reserve?
The reserve fund required varies based on the number of properties managed under the agreement. These funds are held by the management company to cover expenses that may arise during the management of the properties, ensuring that there are always available funds for necessary operations without delay. The tiered structure reflects the potential for more significant expenses as the number of managed properties increases.
4. How Fast Do I Get My Money?
Rents collected and other income from the property are due to be remitted to the owner by the 15th of the following month. This timeline allows the management company to deduct authorized expenses and fees before forwarding the balance to the property owner, ensuring clarity and consistency in financial transactions between the management company and the property owner
5. What Is The Maintenance Trigger?
Maintenance triggers are clearly defined to ensure timely responses to property issues while also giving the owner control over significant expenditures. Regular maintenance and minor repairs are managed directly by the property management company, but any single expense over $500 requires the owner's prior approval, unless it's an emergency situation necessitating immediate action to protect or preserve the property.
6. What Are The Guarantees?
The agreement does not explicitly state specific performance guarantees, such as tenant placement timelines, maintenance completion schedules, or financial performance metrics. Generally, such guarantees might be addressed in service-level agreements or specific clauses within broader property management agreements, focusing on service quality and operational benchmarks.
7. Who Handles Evictions?
The property management company is responsible for all aspects of eviction processes, from initiating proceedings to representing the owner in court if necessary. They are authorized to handle legal matters pertaining to evictions, including hiring attorneys to ensure proper legal procedures are followed. This comprehensive management of evictions reduces the burden on the property owner and ensures that evictions are handled professionally and in accordance with the law.
What the Property Management Agreement Can’t Tell You-
Property management agreements typically outline the responsibilities and expectations between the property owner and the property management company but don't cover scenarios outside the scope of daily property management. For instance, they might not address changes in property management regulations, economic factors affecting real estate markets, or unexpected events like natural disasters. These are generally covered by insurance policies and broader legal statutes that govern real estate and rental properties beyond the specific terms of a management agreement.
