This is the longer version describing the limits of duties, tasks and responsibilities as their manager. This document evolved over 20 years as our way of answering the owner’s question “what am I paying you for anyway?” It lays out what we do for the procurement fee, renewal fee and monthly management fee. It’s detailed and won’t be exactly as you do it so you’ll have to tweak it to fit your model.
Most owners don’t know what property managers do for the fees they charge resulting in tension between owners and managers over unrealistic expectations.
To make this worse, some managers think they are supposed to manage the owner’s utilities, HOA issues, home warranties, insurance issues, tax reporting, property tax issues, property line disputes and basically everything that remotely affects the property. If owners have managers in other parts of the country/world they may come to you expecting you to manage all these things for the monthly fee you quoted them. If you don’t set these expectations and put bookends on the services you offer for the fees you charge, they will bully you into doing things you don’t know how to do, have no experience doing, don’t have the authority to do and are not getting paid for in order to keep your owner happy.
Over the years, managing for about 3,000 owners, we’ve fought these battles and, out of necessity, developed several strategies to push back (put bookends on our services), set expectations and let the owner know what we do for the fees we charge and what will cost more if they want additional services.
Just to be clear, you can choose to do anything the owner asks you to do and you don’t have to charge for it. You just don’t want the owner to EXPECT IT for the monthly fee you’re receiving.
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This is much more than just the document. This is 35 years of experience wrapped up in documents (plus training videos) including all the proper disclosures to turn on the revenue streams and turn property management into a Cash Cow, CYA protections and things you didn’t even know you needed (and won’t even think about) until it’s too late.
We have spent tens of thousands of dollars with our lawyer over the last three decades perfecting and revising these documents. They have prevented countless lawsuits and disputes with owners and have made us tons of money (literally millions). You will too if you acquire these documents and put them to work in your business. Or, learn from your own experiences over the next 25 years, make your own mistakes and create your own war stories and documents. The choice is yours.
Our document was originally drafted in 1990 by a large prominent real estate litigation firm in Atlanta, Georgia and attorney Monica Gilroy (a landlord/tenant litigator) has been tweaking, editing, updating, revising, and perfecting it for us ever since. Revisions have been driven by the ever changing license law, landlord tenant law, federal and state law and our experiences with over 9,000 tenants. It is undoubtedly the best CYA management agreement you could ever use and full of revenue-generating strategies.
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Ancillary documents are only needed when it’s appropriate. Again, there is no reason to address roommates, hot tubs, pets, HOA details, mandated renters insurance, requirements for changing furnace filters or rules for the pool in the basic lease because every property doesn’t have them. However, when you need it, you need it now and special stipulations just don’t give you enough space to articulate all the details. Also, special stipulations are typically made up on-the-spot leaving plenty of room for errors. Having a document ready to execute gives you time (and attorney review) to say it exactly how you want to without the pressure of typing up a special stipulation on the spur of the moment. Again, these documents are NOT signed by the manager but set the tenants expectations and provide more body armor for the manager.
The Property Management Lifecycle by Crown Investor Institute LLC