Lead Paint and Flood Disclosure — Owner
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.
The property management business is a thin-margin, nickel-dime, service business and managers need lots of different ways to generate revenue to survive, including setting up separate businesses that can support (and profit off of) the management business.
We all know that disclosures to our owners is critical to keep your license but often struggle with the question ‘When And How Do I Disclose’ so I can charge fees, receive referral checks, take commissions, make spreads, profit on maintenance, markup ancillary services and make money through outside companies I own. The question is, “what do I say in the PMA (that owners will accept) that permits me to make this additional revenue … and, how can I word it so the owner doesn’t get mad, or the real estate commission come down on me for not disclosing properly?
So, this challenge has three criteria. First, it must allow us to generate profit from any and all sources (including from sister companies we own); secondly, that the owner would be ok with it, and lastly, language that satisfies the real estate commissions requirements for adequate disclosure.
We struggled with this for years and tried lots of different methods of disclosure that met these three criteria. In the mid 90’s, with attorney Monica Gilroys help, we finally settled with this language. Owners feel it’s reasonable and fair; it opens up the floodgates of new revenue streams, and, it satisfies the real estate commission's requirements of Full Disclosure. It’s called a Broad Standing Disclosure. We’ve signed up over 2,000 owners with it and few request more explanation. Part of this document is ... The Language .. the other part is ... The Explanation (when owners ask for clarity), and strategies for your implementation.’ We give you several options on How To Say It … along with lots of talking points when you’re asked about it by an owner.
Since we included this language in our management agreement we’ve made several million dollars from ‘non-management related fees’ (ie, Procurement Fee, Renewal Fee and Monthly Fees) in our businesses. Today, over 40% of all our revenues come from ‘non-management related fees.’ This language is your Launching Pad for generating tons of revenue off your managed properties. It’s the gateway to Cashing In On Property Management.
For folks with lots of existing PMA’s in place, needing some strategies to get old owners to agree to this new language, see our Cashing In On Property Management Resources section on this site and review the section called Disclosing Fees.
““This disclosure language has served Roberts management company (and many of his colleagues) for well for over 20 years. It clearly satisfies the requirements for disclosing to owners (and the real estate commission) and meets the criteria we set up for it in the beginning. (note: never add language to your management agreement without reviewing it with your Broker and legal counsel first):” Monica Gilroy Esq, managing partner Gilroy, Bailey, Trumble LLC.
Let’s talk about price.
If you have a vault full of money a simple key might be needed to open the vault. The actual key isn’t worth much ... it’s a small piece of metal with some points carved in it, but, it’s the one thing that opens the vault where all the money is. So, you might feel like you’re paying too much for this small piece of metal (the language), but it’s not the metal you’re really paying for, it’s access to the contents of the vault. So it is with the price of this tried and tested idea. When put into place it frees you to generate lots more revenue, safely and legally, off your management business.
New Owner Sign Up--Broad Standing Disclosure Language $145.00
(subscribers get another 20% off)