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Updated almost 7 years ago on . Most recent reply

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Steve Kim
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Residual Fee for commercial lease

Steve Kim
Posted

I am purchasing a commercial property that is being managed by PM.  He is charging 6 % of gross rent for managing the property.

Upon reviewing the current P & L statement, I saw a fee call "residual fee", I have never heard that term before.  I call the PM to 

inquire about the fee, and he explained that when he leases out the unit, on top of agreed flat fee(first month rent), he collects 5 % of rent/month for the duration of the lease.  So, here is my question, after I take over the property, am I obligated to continue this commitment from the previous owner? This property is located in Ga.

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