Lease renewal fee charged by property manager.

[Brant Richardson]

Management fees, new tenant fees, service/repair fees... they all make sense to me. But a fee to renew the lease for a tenant wanting to stay another year does not. To me, if the tenant wants to stay, that just means the property manager did a good job selecting the tenant and deserved to receive the new tenant fee I already paid.

I know I need to get on the phone and start calling other PM's in the area to get an idea if this is typical of my market but I thought I would ask here on BP. Is a renewal fee typical? If so, what is the fee? My guy is asking 25% of a months rent.

[Gerald K.]

In addition to what Clint mentioned above, which are good points that I would agree with, there could be some administrative fee the PM is charging for lease renewal. They may need to write up a new lease, schedule a signining, check for any changes with the tenants - such as change in employment, change in number of vehicles, tenants now are age 18 that need background check, etc. Lots of things could be involved or happening that my not be apparent. Perhaps inspection of the property and taking care of any damage - take out fund in security deposit with something like 30 days to replenish, etc. However, if there's no visit, if the new lease is just sent in the mail for the tenant to sign, if there's no inspection of the property or verification the tenant is taking care of the place, then I would be less anxious to pay the fee.