Does Multiple LLC Client = Multiple Management Contracts?

[Jeremi Ramos]

Hi!

Maybe one of you can help....

I run a property management company.

I have a new prospect that wants to go through with a contract. They have an LLC for each building. Do I really have to do a separate management contract for each individual building? That would be A LOT of separate contracts. I was going to draft up one contract with each LLC as a separate "Owner" with the authorized representative for all, the actual owner, to sign the one contract for all legal entities, but they didn't like this and want to keep all documents separate.

I gave them a VERY competitive price quote based on the total portfolio as 1 account with the total number of units. Should I be charging the management fee based on the total portfolio or based on the number of units each entity has on their separate contract? Completely Separate entities with completely separate management accounts means more administrative work and other costs. Most of the buildings only have 6 units max, the rest having less. That's a lot of work!

Is there a better way? I intend on asking the attorney, but I figured I'd try here first.

Any input from someone with experience with this type of situation would be super appreciated!

Thanks in advance for your time and input!

[Drew Sygit]

@Jeremi Ramos do an addendum to your PMA that has all the Portfolios and Buildings on it.

Be sure to include language though, that allows you to auto-transfer funds between the Portfolios/LLCs to cover your management expenses.

Otherwise an owner could screw you on fees by letting portfolios go negative on their balances.