Contract renewal fees for realtors in Florida

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Contract renewal fees for realtors in Florida

Carlos Webel
Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes

Hi all,

I have a rental property (Condo) in Miami, FL. I was extremely happy with the work done by my realtor listing the property and getting me good tenants quick at the price I was looking for back in 2013. The tenants have been very good and we are about to renew the rental agreement for the 3rd year. I have an ongoing issue with my realtor because they charge me 10% of the contract value to renew the contract with the same people, at the same price which I think is outrageous considering that there's very little additional work involved (copy paste of last year agreement). Last year it cough me off-guard but this year I told them that I wasn't planning to pay the fee and that I would go ahead and draft my own contract and get it signed by the tenant. I have the following questions:

1.- Have you have the same experience with properties in Florida. Are other good realtors out there that don't charge to renew a contract with the same tenant?

2.- Do I have to be a realtor to sign a rental agreement with a tenant?

3.- What do I need in order to renew the contract directly with the tenant? Do I need to get an attorney or can I use a Florida rental agreement format, fill it up and sign it?

4.- Do you have any generic format for rental agreements for Florida that I can use as initial starting point?   

Appreciate your feedback and insight. 

Rgds, Carlos

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  • Account Closed
    Investor / Real Estate Agent · Miami, FL · Member since 2015 · 81 posts · 55 votes
    10y

    The 10% renewal fee you are being charged is very common in Miami, but also negotiable. As a landlord, I am very clear with any agent that brings me a tenant. I do not pay lease renewals. Some agents get defensive and others don't. 

    As for renewing the lease with a tenant, I typically use a one page extension. Landlord and tenant agree to extend the lease dated xxx to xxx. All terms and conditions remain the same. If you plan to raise the rent that should be included as well.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    Everything is negotiable. You should have worked this out prior to engaging them. Are they managing the property? If they are managing, most will charge more for the initial month and then a smaller % for the remainder. See if they will negotiate a better deal. If not, you might end up having your relationship strained or ended with them.

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  • Carlos Webel
    OP
    Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes
    10y

    Hi Nick,

    Thanks for the feedback. I was told that it was illegal for myself to do a renewal to the old contract because the previous contract was from Florida Realtors and I'm not a licensed real estate agent. 

    Any feedback on that?

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  • Carlos Webel
    OP
    Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes
    10y

    John,

    Yes, they are also managing the property for me because I leave in other state (and abroad for a long period before that). They charge 100$/month for that. However, they work that part as 2 separate companies with the management side not taking care of any renewals and having the listing agent deal directly with the renewals. 

    Rgds, Carlos

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  • Account Closed
    Investor / Real Estate Agent · Miami, FL · Member since 2015 · 81 posts · 55 votes
    10y

    @Carlos Webel my understanding is a landlord and tenant can extend, renew and/or adjust lease terms as needed. I've seen it done this way many times over the years. As for the legality you would need to speak to an attorney. 

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  • Joy Hardin
    Investor · Fleming Island, FL · Member since 2015 · 34 posts · 8 votes
    10y

    @Carlos Webel What do you mean by 10% of the contract value? How much would that be? If your property management has been doing a good job and your tenants renew, it seems to me that some sort of compensation/bonus would be appropriate. Think about the  hassle of getting a new tenant and the money that you would lose in the meantime. It might motivate the PM knowing that they receive a bonus when a tenant renews. Otherwise they might have more incentive to just let the lease expire and get a new tenant since that's when they make most of their money. 

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  • Melissa Howard
    Jersey City, NJ · Member since 2017 · 1 post · 0 votes
    9y

    @Carlos Webel  Hi Carlos, I saw your post while doing some research on this topic.  I have exactly the same situation as you, I have a condo in Miami, got a real estate agent who was great at first, and my tenants are getting ready to renew their lease for year 3.  I paid 10% of the contract value during year 1 and year 2, and now that i'm getting ready to renew the lease for year 3, I approached my property manager asking to renegotiate the terms of his fees as 10% seems extremely high at this point considering his work is limited to renewing the agreement and one to two calls per year for some maintenance related matter.  He was not willing to negotiate the fees with me and pointed out I can cancel his services and handle the leasing agreement on my own if I want, but I would still have to pay him 10% of the lease renewal contract value because he procured the tenants on the first place and he's entitled to 10% on renewal fees for as many years as they stay with me.  Turns out this clause provides total protection to him, but nothing to me (landlord) as he now gets to do a mediocre job and be rude to me because he knows no matter what he gets a 10% of my monthly rent.  Now I've lost my trust in the realtor, I feel he is not open to talk and he's rude to me, and I want to end the relationship with him.  After reading your post, I was wondering if you were able to terminate your listing agreement and manage the property on your own and if you had to pay any penalties for this or how did you work this out.  If you have any advice I could use I would really appreciate it.  Also, if there are any experts on this field reading this post, I would appreciate your input very much.  

    Thank you!

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