Document Summary for Customized Management Agreement

Management Agreement Docs Items 1-5

The Management Agreement is the cornerstone of the relationship between the property owner and the management company. It establishes the terms of the relationship, the fees, how to end the agreement when something goes wrong, waivers and liabilities. It is what you go to when things don’t work out on the operational side of the relationship. When the owner pushes back, you get to point to this agreement and remind them of what they agreed to in writing. This is the key document in your business model.

This document was originally drafted in 1990 by our attorneys at McCalla, Raymer where we were clients for 10 years. Since then it has been tweaked, edited, updated, revised, sharpened and perfected to protect us from every known danger of property management. Revisions have been driven by the ever changing license law, landlord tenant law, federal and state law changes and our experiences. Every time we drop the ball and screw something up (which is a lot even after 35 years) we make changes in this agreement. Our attorney, Monica Gilroy, of Gilroy Bailey Trumble LLC (formerly of McCalla Raymer) has made changes in this document as recently as the summer of 2016. It is undoubtedly the best management agreement you could ever use. Since this agreement was written by our attorney (a real estate litigation expert) to protect us, it goes a long way to shutting down opportunities for litigation against the manager.

Note: Long property management agreements should be avoided as they make owners suspicious and prompt them to send them to their attorney for review (not exactly what you’re hoping for). So, for many years we kept the PMA short (like 5 pages) and added Housekeeping (support) documents, separate from the agreement, to give special emphasis to things we wanted to draw their attention to. They execute all the housekeeping documents which gives them ‘the same strength as the PMA’ and helps us avoid Document Creep (ending up in a 15 page management agreement). You can download this management agreement with (or without) the Housekeeping (supporting) documents. It works great as a stand-alone agreement or in conjunction with all the other documents listed below.

What you get:  1. a fully editable management agreement (PMA) that you will add your name to, make some dollar (and percentage) changes, and be up and running in minutes; plus, 2. a document to help you fill in the right information so your final agreement is exactly what you want. The “Instructions to Adapt the Management Agreement to Your Company” identifies 20 blanks to fill in so you don’t miss anything in the Agreement to adapt it to your model; plus, 3. a document completely filled-in plus instructor training notes after every paragraph addressing each issue in detail; plus, 4. a training document of Duties, Promises, Warranties the owner makes to the manager, and manager to the owner; plus, 5. Annual Revisions

Every document comes fully editable originals, with a sister copy filled out, plus instructor notes where appropriate, plus originals. Add your name to the original and you’re up and running. 

Customized Management Agreement Package # 1 includes FOUR documents. We spent thousands of dollars developing these documents. You can have them for pennies on the dollar. Remember this is a Georgia specific document. Think of this as what you might earn leasing one property, or about the cost of two hours with a medium priced attorney.

Management Agreement and Related Documents which includes items 1-5 for $497.00

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For more savings view Super Package # 6 at the bottom of the page.

Housekeeping Supporting Docs Items 1-8

to be added to every property management agreement

Over the years we have figured out that there are some things you need to address in a separate document because it needs special attention. Mold, mortgage foreclosures and personal property issues are examples. Sometimes, when a big topic is addressed in the management agreement, it stretches the document into eight or ten pages which is to long. Some management agreements go on for 15 pages and they are overwhelming. Long agreements generate too much information (and suspicion) for the owner. Better to carve out some topics from the property management agreement and put them on separate pages. You use all these housekeeping documents with all property management agreements.

1. Mold / Mildew / Moisture Disclosure

Any moisture issues the owner has had in (and around) the property, in the past five years, needs to be disclosed to the tenant before they take possession. You need to notify the tenant if the owner has had a flood, leak, mold, water damage etc. Failure to disclose this can have serious consequences and we’ve fought several battles with tenants over this disclosure. Make sure the owner signs this and have the tenant sign a copy before they move in. Tenants get irate when they discover ‘the owner had moisture/mold issues and wet basement with previous tenants’ (or while they lived there) and feel deceived when it’s not disclosed before they took possession. When tenants feel tricked or deceived they talk to lawyers. The manager usually ends up being blamed by the tenant and ends up sharing in their moving costs. Owners don’t think to tell you ‘unless you ask’ so be sure to make an issue out of this. We’ve been burned more than once over this failure to ask, and get hold harmless agreements from the owner. You can use the same owner signed original over and over again so ‘don’t use the original.’ Make copies for future tenants to execute. (Don’t miss the sister document for the tenant signs in the Tenant CYA section)

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2. Establishing & Maintaining the Trust Account

Tell your owner/client clearly about your trust account requirements and how your state law regulates the management of those funds. NEVER cover their expenses and send them an invoice or you’ll be bankrolling them forever. Make it clear they need to pre-fund maintenance, maintain a minimum account balance (owner reserve) and keep all trust accounts positive. Let them know you will be depositing all funds you receive into a trust account and report to them monthly. This disclosure takes care of all those issues and gives you a document to point back to when they resist depositing money with you before you pull the trigger on normal maintenance and turnkey projects. This is often hard to manage because owners want to stay in control. They want to pay off an invoice, after the job is done, and they verify it. After the job is done is never the time to argue about money. Set this up right and you’ll have no trouble with the administration of your owner’s trust account. Make it clear that you intend to follow the licensing and trust account laws of your state and they need to embrace and cooperate with that effort or find another manager. You are no different than a bank, brokerage house or sales company. You must follow the rules of your licensing bureau and ‘having the money in the owners trust account BEFORE you order the work’ is part of that compliance issue.

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3. Personal Property Disclosure

Owners love to leave personal property behind thinking it will still be there when they return. It seldom is and guess who they want to hold responsible for protecting and managing it? YOU of course. No matter what you say to them, they think you should be the guardian of their stuff, and see to it that it gets returned in good shape. Protect yourself. Take yourself off the hook in advance and make it clear ‘you’re not the manager of their personal property.’ For years we tried to accomplish this with a stip in the management agreement but it didn’t work. You need to draw their special attention to this Issue and this document accomplishes that. This document tells them to take their personal property out or don’t expect to see it ever again. They will leave stuff locked in a closet in the basement and expect you to manage it as well. They will expect you to manage the water leaks and mold on their stuff in their Owner’s Closet and blame you when the rodents find their way in. Make it clear you’ll list items they leave behind but they can’t hold you accountable when it turns up missing or broken.
Note: when the sheriff and his boys start tossing out the tenant’s stuff they seldom ask “is this yours, or the owners.” You need this document to protect yourself.

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4. Owner’s Mortgage Disclosure

One of the huge risks managers bare today is renting a property, move the family in, then watching as it goes into foreclosure and the tenant gets evicted by the lender. We’ve had it happen more than we’d like to admit. If you don’t protect yourself you will get sued by the tenant for violation of your promise of quiet enjoyment, unlawful dispossessory or constructive eviction. When the owner signs this document they are promising the mortgage is current; if it goes into foreclosure they will notify you immediately (not that it will help any), and (here is the big one) they will pay your attorney fees if you get sued by the tenant over the foreclosure issues. Don’t make the mistake of thinking, “if the owner loses the home in a foreclosure they won’t have any money to defend you, so why go through the effort.” Wrong!!! Many landlords have great credit, own their own home, have good paying jobs and will still let their rentals go into foreclosure. Don’t think they are broke just because they let the rental go back to the bank. Having them defend you is good protection and they will sign this without question if they think they will not be foreclosed on. If they hesitate signing this you should be suspicious and do more research. Get this signed up front and protect yourself from the carnage of a foreclosure.

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5. W-9 Form

The IRS requires that you report to them (with a copy to your owner) at the end of every year, regarding how much rent you collected from the tenant on their behalf. Your report is due to the IRS before January 31st and the penalties against YOU for failure to report are substantial. This is the document the owner signs acknowledging this report and your requirement to send it to the IRS. Make sure they sign it or you will have a very unhappy owner when you do your reporting.

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6. Lead Paint and Flood Disclosure

Houses built before 1978 often had lead in the paint which has been discovered to be toxic and a serious health hazard for kids under 8 and pregnant women. Federal law requires that you have the owner and tenant sign this to disclose the potential presence of (or lack of) this poison in the home. The owner signs this document to reveal to you (and the tenant) any knowledge they have regarding any lead paint in their home. Copy the original the owner signs and have every tenant sign (a copy) before you move them in. Use the same original over and over. Just have the tenant sign a copy and keep it with other important tenant documents.


Every one of these documents is the result of getting burned, blamed, fined or fired for something we either didn’t do right or didn’t disclose adequately. You can have your attorney draft each of these documents and tweak them over the next 10 years as you go through your learning curves, or, download them and be up and running instantly. It’s not a matter of IF you’ll need them, but WHEN. Protecting Yourself is a full time effort in property management.

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7. Authorization to Add Agent (property manager) as an Additional Insured.

Never manage a rental unless the owner/client adds your company name to their landlord policy as an additional insured. This is standard practice for the insurance companies and will do it at no cost to your client. When this authorization is signed by the owner you’ll send it to their insurance agent who will add you on the policy and send you a declaration page (Dec Page) evidencing your coverage. Don’t manage the property without it. Other managers understand this and so does the insurance carrier. It’s the owner that is new to this process. Don’t let the owner talk you out of it. E&O policies and General Liability policies for property managers often mandate that this is in place or your coverage is diminished (or voided). You’re not covered for property damage because you don’t own the property. You’re just covered for liability when someone is caught in a fire, falls off the deck or drowns in the tub. We’ve had all these things happen and the owner's policy covered us instead of our GL policy. Make it clear to the owner that insurers understand this and will add you without cost.

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8. Personal Property Feature Disclaimer

You’ll need a form for the owner to describe all the features of their property including number of bedrooms, baths, schools, community amenities, which appliances are included, utilities included and other features. Don’t let them ‘push this off on you.’ If there is an error they will blame YOU and THEY should have the information in THEIR files. Often you’ll advertise a property with a washer/dryer and the owner will take it, leaving you to buy one for the tenant (or other crazy things like this). We’ve made the mistake many times of identifying the wrong schools, listing the microwave when the owner takes them, forgetting that the security system was the tenant's expense and so on. There are lots of ways to screw this up so make the owner complete it. There is more than one way to do this. This format is sufficient for most rental houses but will need to be tweaked by you to fit your model.

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Housekeeping Documents Package # 2 (items 1-8)

Buy Package # 2 Includes Items 1-8

The price for buying each document individually would total $135.00 or you can purchase the complete package for $110.00. We spent thousands of dollars developing these documents. You can have them for pennies on the dollar.

What you get: 1. Mold / Mildew / Moisture Disclosure; 2. Establishing & Maintaining the Trust Account; 3. Personal Property Disclaimer; 4. Owner’s Mortgage Disclosure; 5. W-9 Form; 6. Lead Paint and Flood Disclosure; 7. Authorization to Add Agent (property manager) as an Additional Insured.; 8. Property Features

$110.00Add to cart

(Subscribers get an additional 20% off)For more savings view Super Package # 6 at the bottom of the page.

Ancillary Documents Items 1-10

Use these documents when appropriate

Over time you’ll run into special situations that need a specialized document. The following are individual documents, checklists and policy statements that will help you manage the owner sign up process. Each file contains a document ready for your immediate use, plus a completed document to help with your learning curve, plus, the same documents with instructor notes for even more training (where and when appropriate).

1. Owner’s Homeowner Association Disclosure

Owners will forget to tell you about HOA requirements and restrictions regarding leasing in their managed communities. This document has been created in 1996 due to the ever increasing dangers we faced leasing in aggressive HOA-managed communities. Owners forget to tell managers about special signage requirements, special forms the tenant needs to sign, special permits needed to lease in the community and these issues can get managers in all sorts of fistfights. HOA’s are booting tires when dues are not paid, dismantling entry keys to pools and evicting tenants over continuous rule violations and managers need to protect themselves from these HOA (or owner caused) hazards. Managers are getting sued by tenants over loss of right to quiet enjoyment, wrongful dispossessory, harassment and constructive eviction when the HOA’s begins to bare down on them. Managers need a document to protect themselves when owners forget to disclose the presence of an aggressive HOA and the requirements of tenant rules in the community. (You also need to have the tenant sign a document preventing them from suing you if the HOA does them wrong. See our Tenant CYA section for a list of documents to protect yourself in these situations). This is one of the most toxic and litigious battle ground of management exposure in today’s rental market and owners need to notify (and indemnify) managers for the fallout from these issues. HOA’s have hugh power over the owner, and ultimately you, regarding what happens in their communities and they love to wield it without mercy. Don’t get caught up in the fines, assessments and debates without having this protection from the owner.

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2. Limiting Smoking in the Lease

Owners frequently want you to put a ‘non smoking stipulation’ in the lease to prevent tenants from stinking up their property. Managers have learned ‘you never to add a stipulation to a lease you have no system in place to monitor it and really can’t enforce,’ and a non-smoking stipulation is one of them. If the owner insists, you need to have them sign a disclosure that although you’ll accommodate them and add it to the lease, there is no way to enforce it. Make sure they don’t have a case against you for failure to enforce a lease that You Can’t Enforce, when the tenant violates the stipulation and leaves smoke smells throughout the property. This provides a way to give them what they want but protect yourself when it doesn’t work.

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3. Assessing the Habitability (two documents)

Whether you do the assessment, or have staff do it, you need a checklist (and training document) to use when visiting a prospective property to access whether or not you want to manage it. We’ve been asked to lease houses that have been vacant for years and owners think ‘they were ok when they last saw them so they should be find today. This package has two parts. A training write-up addressing the issues of ‘it’s your job to examine the property and tell the broker whether we want it or not’ as well as ‘the actual checklist for the inspection.’ Someone needs to methodically walk the property and conscientiously look for things that would keep you from managing it as a rental, and/or list the things that need to be addressed before you’ll start marketing. This is a long list of things to watch out for including things like dead trees or tree limbs hanging over the home, deep ditches around the home, open holes in the yard that can hurt children, mildew on siding, damp basements, three story decks, missing electrical plates and more. Unlike sales listings, you don’t just say ‘yes’ to every owner that calls. Protect yourself and prevent claims from tenants of negligence regarding habitability issues. This is about protecting yourself from owners who don’t care or don’t understand the issues of safety and habitability.

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4. Power of Attorney

Often you’ll find yourself in a situation where ‘one of the owners wants you to deal with the other one’ and not be involved in any decisions. Or, you’ll be receiving orders from several owners and you’ll want to ‘reduce the confusion and designate one to do all the talking.’ Managing for two or three owners is often chaotic like kids listening to two parents who don’t agree. A power of attorney is the solution and they are easy to fill out. This is one our attorney crafted years ago just for owners to identify ‘who is doing the talking’ or ‘I’m traveling a lot, take orders from my brother.’ You don’t want to follow those instructions without a document protecting yourself if the designate does something stupid and makes a bad decision for the owner. When in doubt you’ll be blamed for listening to the wrong person and take the hit for the consequences. Get it in writing. Use a POA. They are simple to complete and will cover you when things go wrong.

Note: Don’t let an attorney (or broker) tell you that filling out a POA for a property management function is the practice of law. It is not. We agent's fill out lots of standard forms and this is just one more that we need to operate our business properly. If you don’t charge for filling one out you can’t be accused of trying to be an attorney. (No one in their right mind would want to be accused of being an attorney) Get used to using these. They are a great tool with lots of uses in managing rentals both for the owner and tenant side of the business. If you use an attorney every time you need a POA in property management you’ll be paying a fortune.

Remember, this POA isn’t for transferring title, and it’s NOT being recorded. It’s for a simple property management application. We offer a blank one as well as a complete one with instructor notes. It’s easier than you think and eliminates the chaos of trying to take your instructions from two or three owners.

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5. Investor Management Agreement Addendum

Don’t change your management agreement for anyone. Leave all the
language as it is, even when you want to cut a deal with an investor/
/negotiator/ bank/ large player. Use an addendum and attach it to the management agreement with whatever changes you want to make. There are strong protections in a well crafted PMA and you don’t want to tinker with the basic language. Here is the right document to make your changes to fees etc. It modifies the management agreement without carving it up. You don’t want another party crossing out important language in the original document because it’s hard to figure out what to leave, how it’s going to affect the whole agreement and erode important protections for you. Add this page, make specific changes and leave the PMA document alone. This document will get the job done without diluting all the protection laid out in your property management agreement.

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6. Hot Tub Exhibit to Management Agreement and Policy Statement (two documents)

Hot tubs can be a nightmare for property managers. Most managers have concluded they won’t manage pools for obvious reasons, while many have decided to manage hot tubs under certain conditions. We’ve done both and have concluded we will manage hot tubs but only under certain conditions. This training document (and exhibit to the management agreement) covers these conditions including insurance coverage with a hot tub warranty or rider, releases of liabilities from the owner plus protections for the manager from bad repairmen. Manage them if you want but do it with the appropriate protections for you and your company. (see our tenant CYA document packages for the tenant hot tub document).

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7. Adding a Property to an Existing Management Agreement

Often you will have a client with an ever growing list of properties to manage like builders, banks, large investors and REIT’s. We use to execute a new management agreement with each new property. That process was laborious, generated way too much paper and was certainly time consuming. Our attorney drafted a simple document that allows us to ‘add a new property to an existing management agreement’ and avoid all the duplication. This simplifies the process and saves you from over-documenting each transaction. Owners love it as it saves them from having to go through a completely new set of documents each time they give you a new property. You still need separate housekeeping documents, like lead paint and a features page, but you save time by just adding new properties to an existing document. I recommend just copying the original management agreement to the new file and attaching this addendum. You may want to add a special stipulation to the original management agreement that anticipates future additions like “this agreement will be sufficient for future properties to be added by the owner by the execution of a separate addendum.”

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8. New Property/Owner Sign Up Checklist

Every office needs to develop an internal tracking form to assure all the owner sign up documents are in the file and all the issues have been addressed. This is a checklist for the staff person to use to make sure utilities are on, keys are located, rental comps have been pulled and every owner document is signed, dated and in the file. You will tweak this to your model and your’s will evolve over time. It will remind you of seldom used documents you’ll miss without this kind of checklist. This is a great way to get started.

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9. Special Pricing and Guarantees

Managers should be slow to change their PMA as the new-year rolls around. If you’re going to add some kind of special pricing or guarantees for the upcoming year do it as an exhibit to the agreement rather than changing your basic document. Don’t change the basic agreement unless you’re really making global permanent changes. Resist changing the original document for anyone. Think globally and clarify your adjustments on a separate document. Be slow to change the basic PMA. This document will be added to your PMA as an exhibit and detail any alterations you want to make to the PMA.

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10. Multiple Owner's Disclosure

This product is in process and will be posted soon

Ancillary Documents Package # 3 (items 1-10)

Buy Package # 3 Includes Items 1-10

The price for buying each document individually would total $130.00 or you can purchase the complete package for $110.00. We spent thousands of dollars developing these documents. You can have them for pennies on the dollar.

What you get: 1. HOA Disclosure; 2. Limiting Smoking in the Lease; 3. Assessing Habitability; 4. Power of Attorney; 5. Investor Management Agreement Addendum; 6. Hot Tub Exhibit to Management Agreement & Policy Statement; 7. Adding a Property to an Existing Management Agreement; 8. New Property/Owner Sign Up Checklist; 9. Special Pricing & Guarantees; 10. Multiple Owners Disclosure

$110.00Add to cart

(Subscribers get an additional 20% off)For more savings view Super Package # 6 at the bottom of the page.

Entity Documents Items 1-3

Use only when the property is held by a trust, corporation or Limited Liability Company.

Often properties are hidden in an entity like a Corporation, Limited Liability Company or Trust. If you’re not careful the owner will trick you by having the wrong party execute your PMA. When a property is held in an entity you need a special document to protect yourself from wily owners who don’t really have the proper authority to act on behalf of the entity. Our attorney crafted these many years ago and we insist on having the owner complete one, get it witnesses and notarized, before we take on the management of their property. Each file contains a document ready for your immediate use, plus a completed document to help with your learning curve, plus, the same documents with instructor notes for even more training (where and when appropriate).

1. Certification of Trust

For asset protection purposes many owners will title their property into a trust. When you see this in the tax records, or on the title page of their deed, you need to remember ‘an individual’s signature on your management agreement is not adequate documentation.’ You can be accused of malpractice or incompetence if you don’t get the listing/management agreement right. Claims from someone that “I’m the real owner behind the scenes, take your instructions from me” isn’t good enough when the title is in an entity or trust. It’s your job to ‘get it right’ and there is no closing attorney to look over your shoulder protecting you from documentation errors or fraud. You need a Certification of Trust, with a signature, witness and notary for your file to protect yourself when things go south and you have an issue with an owner or tenant. Make sure you’re dealing with the right person, with the right authority, and sending the money to the right account before you take on the property titled in a trust. There’s a lot of money at stake and people get real mad when it goes to the wrong account. Make them fill out this certification and swear, in front of a notary, they are the person you can trust for ownership decisions for the trust.

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2. Corporate Resolution

Every builder, bank, developer, REIT (and many private owners) hold title to their property in a Corporation. It’s your job to get the paperwork right or you’ll pay a price if you skip over this because you don’t know what to do. Require the one claiming to be in charge to complete and execute a corporate resolution. People working out of a corporation know this is expected so don’t disappoint them. They had to execute one of these to open a bank account, get an EIN number and take title of the property. These documents will protect you when things go wrong and they are simple to fill out. Get the person ‘claiming ownership’ (or signing authority) to complete it, execute it, get a witness and notary for your protection and stick it in your file for safe-keeping. You’ll sleep better knowing you have crossed all the t’s and dotted all the i’s. 

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3. Limited Liability Company Affidavit

Often a property is held in a Limited Liability Company (LLC) for asset protection or to hide the identity of the real owner. Many investors use this strategy to mask who the owner is. Hiding title is a popular form of creating anonymity and this often confuses the property manager. Don’t become one of the tricked ones in the long list of owners wishing to remain anonymous. It’s your job as the licensed professional to get the paperwork right or you’ll pay a stiff price for failing to. You have no closing attorney to figure this out for you so you must do it yourself. Require the one claiming to be in charge to complete and execute this LLC affidavit and keep it in your records. These documents will protect you when things go wrong and they are simple to fill out. Get the person claiming ownership (or signing authority) to complete it, execute it in front of a witness and notary for your protection. You’ll sleep better knowing you have crossed all the t’s and dotted all the i’s.

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Entity Documents Package # 4 (items 1-3)

Buy Package # 4 Includes Items 1-3

The price for buying each document individually would total $90.00, or you can purchase the complete package for $70.00 We spent thousands for the development of these documents. You can have them for pennies on the dollar.

What you get: 1. Certification of Trust; 2. Corporate Resolution; 3. Limited Liability Company Affidavit

$70.00Add to cart

(Subscribers get an additional 20% off)For more savings view Super Package # 6 at the bottom of the page.

SUPER Package Including Packages # 1, # 2, # 3, # 4

Buy the SUPER Customized PMA Package

Total of all packages bought separately totals 934.00, or about 3 hours with a medium priced attorney. You get all packages together for only $865.00

$865.00Add to cart

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Video Training Package Package # 5 Coming Soon

We recently (Summer 2016) held a three-hour study group with the managers using these documents and captured it on video. We got "down into the weeds" so to speak, just on owner sign up documents and process. It was not open to the general population of managers; just those using our management documents. We've produced a video (and audio) of this workshop.

You can download the Video Training only (Package # 5) or bundle them up with other packages on this page.

We are not charging for our video training yet, but you can see many of those videos now by clicking here and for our online classes on the PMA you click here and here.

 

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