Property managers can smartly guide you through successful property investment ventures and help you make the right investment decisions to improve the overall portfolio of your property. Before hiring an asset management company, it is important to carefully review the contract that they are offering. This is because you need to know their responsibilities and your duties as a land lord. Moreover, you need to ensure that you stay protected if the manager fails to meet the requirements. Here are 6 basic elements of the contract that you should put your focus on the most.
- Services and fees
- Responsibilities of the owner/s
- Equal opportunity housing
- Duration of the contract
- Clauses involved with termination
1. Services and Fees
The management fee is the most common and basic fee that will be included in the contract. You need to understand the type of services that the manager has agreed to perform and the amount that they will charge for these services. You should understand the services that are included in the management fee and the ones that can be performed under additional fees, while knowing the services that cannot be performed under any circumstances.
You should keep in mind that just because a manager is asking a higher fee does not mean that they will continue to charge hire for the additional duties such as vacancy fulfilment, bills payment, solving maintenance issues and eviction procedures.
• Extra Services
For extra property management services in Rousehill, the agreement should clearly state how the services will be charged. For instance on a case by case basis, a percentage of the fee or a flat fee.
• Excluded Services
You also need to be aware of the tasks that the managers will not be performing under any circumstances. This usually vary form company to company and the most common exclusions include extensive remodelling. You should be aware of the fact that the contract is not excluding something that is considered a vital part such a finding the tenants, rent collection or emergency handlings.
2. Responsibilities of the Property Owner
This part of the agreement should talk about the roles and responsibilities of the landlord. The contract will describe the things the property owners are obligated to do and are not allowed to do. For example:
• Reserve fund maintenance
The landlord should put a certain amount of money into a reserve fund that the manager can use for daily maintenance issues and emergencies. You should ensure that the fund never falls below a certain amount.
• Finding tenants
Most of the company will not allow the property owners from placing a tenant on their own. This is usually done to safeguard the manager from having to handle a tenant that is not selected according to their criteria.
The property management service needs to be protected from unexpected liabilities. For example if they hire a third party contractor and the contractor damages the property then the manager will not be responsible for such actions. However, if there is a damage that takes place because of their own negligence. Then the manager will surely be responsible for responsibilities.