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    Default Issue with Property Management contract under negotiation

    Hello,
    Thanks for all the knowledge and amazing information.
    To be honest, we are under negotiation with an Investor who owns +30 properties. I’m not fully sure that the deal is the correct one for us. Anyway, I would like first to give you some insights about the contract (only draft – nothing was signed).
    It would be perfect is someone could give me his/her feedback on the proposal below:
    Property management fee is 10% in our contract (still a draft). There is no fee for finding the tenant. The tenant is paying the agency fees. On the agency fees 50% is going to the investor.
    In the property management is including:
    – Marketing
    – Finding tenants
    – Visits
    – Checkin
    – Checkout
    – Control the consumption charges
    – Deal with issue related to tenant
    – Prepare lease contract
    – Deal with small repairs: change of bulb, chair, small table, screw, silicon, internet reboot, quick painting, shower, toilet bowls..etc. (it means going on site, check what is going on, then go to the shop, come back to the apartment and fix. In term of time, minimum 2 hours, between driving, coming back, fixing..etc.)
    – Checking bank transfer regarding payment of the rent
    – Make and send invoice to tenant
    – Collect all invoices payables from the accountant, from provider..etc. and send it to the investor.
    – If bills increased, to ask for negotiation to the provider.
    – If one property is vacant more than 10 days, our management fee goes to 8%

    For medium repairs:
    – We send an handyman, and the investor is paying for that

    For renovation: Fee of 10% of the total amount invested for finding providers, and overlooking the job (Price list, organisation of the renovation, checking everything is done properly, going to the shop if needed).
    Now, I would like to approach few points that may happen:
    1) Do you agree that the Property Management should put an extra fee if the owner didn’t pay on time bills like electricity, water..etc. and energy has been cut off? So it means that to solve the issue, the PM must go to the energy provider, and find a solution (it may take 3/4 hours in my country to deal with such issue).
    2) Same questions regarding tax. What if the owner didn’t pay property tax on time, and then the PM must go to tax office to deal with that.
    3) Do you include the montage of furniture in the monthly property management fee?
    4) Do you agree that home-staging with time and shopping are included in the management fees?
    5) Do you agree that the Property Manager should reply to all the request of potential tenants even if the properties are already rented?
    6) Do you agree that the Property Manager must organize and check the delivery and instal basic furniture? And it should be covered into his property management fee?
    7) Do you agree that the Property Manager shouldn’t be paid on one of the property if this one is under maintenance or renovation?

    PS: Deal is done in Europe, not in the US.
    Thanks a lot for your time!


 

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