COVID Rent Funds: Reasonable Property Mgt Charges

[Drew Sygit]

We'd like to think we have pretty detailed property management contract. We list everything we think has about an 80% probability of happening, with any correlated extra fees if it's not covered by the management fee.

Well, no one could have foretold a pandemic would hit the world, or the resulting Eviction Moratoriums, so it wasn't covered by our contract.

We sent out a message to all our landlord clients in April 2020, when the first round of government rent funds was announced. We told our clients there'd be a $150 Processing Fee to apply and then a $250 Success Fee if we were able to get funds. The message stated that they had 10 days to respond or we would proceed as if they had approved us to do so.

We thought this was fair to cover all the extra time & effort it took to:

1) Figure out the forms & program
2) Chase tenants to get them to fill out their part of the application and get their required docs
3) Chase the caseworkers, who were overwhelmed and conveniently kept "losing" submissions emailed or uploaded to them
4) Deal with a myrid of other challenges to actually get the funds for our client

So far, we've collected over $100k for our clients and most are okay with our charges.

A few though, are complaining and making threats that we are charging too much. One specific client even insits we can't charge our fees as they aren't covered by the management contract - despite us showing them the email we sent last year (which they never responded to).

Curious what other PMC's are experiencing and what other landlords think?

[Adam Martin]

I don't use a property manager so I am somewhat biased here but I would not be happy with this.  Yes this is extra work for you but in my opinion it seems like everything a property manager has to do they charge extra for which makes me wonder what the original percent of rent is for.   If you collect a % of rent collected and went without while the owner did I would see this as more fair however if you still tacked on your fees while the tenant wasn't paying this is wrong.  I'm also not big on just unilaterally deciding you are doing it without consent, a more fair way of doing it would have been to let them know this is a new service you offer and having them opt in.  If they chose not to pursue this option then they avoid the fee but then also avoid the possibility of the collection, doesn't seem like a good option but that is their decision.