I'm looking at my first rental property in Ohio and there are some terms in the property management agreement that I would like to ask the forum to weigh-in on. Some of these terms may be normal, however they stick out like a sore thumb to me. I feel like I'm being nickled & dimed here.
These include:
- 1. Is it normal to have a 12-month agreement starting off? Along with having a $750 termination fee if not done in 45 days before the contract renews? Should the contract term auto renew?
- The term of this Agreement shall be for a minimum period of Twelve (12) months (the “Initial Term”) beginning on the date this Agreement is executed by Manager, and thereafter shall automatically renew for an additional twelve month period (the “Renewal Term”) unless terminated by either party in accordance with this agreement. This Agreement may be terminated by Owner prior to the end of the Initial Term or Renewal Term through written notice to Manager forty-five (45) days in advance together with a termination fee in the amount of $750 (Seven hundred fifty dollars).
- Should the PM company be paid in 100% of the first month's rent of finding a new tenant? Along with renewals as well?
B.) Leasing. For the procurement of a tenant(s), Manager shall be paid a leasing fee of 100% (One hundred percent) of the first month’s rent. In the event the Owner procures a tenant, the leasing commission shall be paid to Manager. Owner authorizes payment of a cooperation fee in the event a referral is approved by Manager.
3) Should each lease renewal be paid 100% to the PM?
a. Lease Renewals. Upon executed lease renewal, Manager shall be paid a fee of 100% (one hundred percent) of the first full month’s rent. Owner authorizes the lease renewal fee to be paid out of the Trust Account directly to Manager.
4. Should there be a $50.00 fee for vacancy?
D.) Vacancy Fee. The flat fee of $50.00 (fifty dollars) per month per unit will be charged once the property is vacant for more than five (5) days.
4. Should the PM company even charge for a phone call?
Fees:
Maintenance Services. Owner shall pay Manager at the rate of $60.00 (sixty dollars) per man hour for all maintenance
services provided under this Agreement, or specifically pre-authorized by Owner in writing. The rate
for maintenance services includes phone calls, emergency or after hours services
5. What are extraordinary services?
Extraordinary Services. An hourly fee of $60.00 (sixty dollars) shall be paid to Manager for all necessary
or requested tasks not included under this agreement or considered normal duties.
- 6. Does this seem true regarding changing the smoke detector batteries? That's nearly $500 for a duplex.
- a. Owner authorizes Manager to change smoke detector batteries (when necessary) and furnace filters four times a year. The owner will pay $55 per unit plus the cost of supplies in addition to any Maintenance Fee.
- Owner shall be charged on a cost-basis under this provision, Manager shall charge Owner for signage and lockbox in the event the Manager’s sign or lockbox is damaged or stolen from the property.
- Need to move all Utilities to be in the tenant’s name, not owners
