Potential Rentals and Realty specializes in property management, selling, buying and renting residential properties.
Contact Info
- 863-220-7830
- evalerdi@potentialrealty.com
- 1225 US HWY 27 S. Suite #208 Sebring FL, 33870
Property Management Agreements
What is important and what a property management agreement CAN’T tell you.
When you (as a property owner) enter into a legal relationship with a property management company you will need to sign a Property Management Agreement. This agreement outlines the legal terms and obligations of the relationship.
Below we highlight eight of the most important parts of a Property Management Agreement you should review before you enter into this legal relationship. Please read to the end, as we also share the most important things that the agreement CAN’T tell you.
How Easy Is It To Cancel The Agreement?
This may sound like a strange thing to review in the agreement, but we believe it is one of the most important parts of the agreement because it shows the property management companies willingness to give you flexibility in allowing you to leave if you are ever unhappy with their service.
A property management company should not handcuff you or force you to work with them, nor should they charge you termination fees or penalties if you leave. Ideally, you want a month-to-month agreement, allowing you to potentially leave anytime you want – and without penalty!
-Our management agreement is month-to-month with NO penalties.
Are The Fees Hidden In the Agreement?
You can expect the company to charge fees for the services they provide, but are those fees transparent and fair?
If the fees are ‘hidden’ throughout the agreement that could be an indication that the company is not being transparent in what they will charge you.
-View our fee structure at the link below https://potentialrealty.com/management-price/
Was the Agreement Prepared By An Attorney?
The state of Florida requires by law that an attorney prepare a Property Management Agreement specific for the company, and this must be disclosed in the agreement.
If the agreement does not have language stating it was prepared by ‘xxx Law Firm’ then you should assume the company is not operating under the required laws of Florida.
-Our management agreement is prepared by a Florida law firm.
How Much Money Do I Have To Place In Reserve?
Your Florida property management company should open a banking trust account for you and you will need to fund this account with what is commonly referred to as a reserve. This money is used to fund your account and may also be used to pay expenses on the property that are incurred before or after you receive the rental income each month.
Reserve amounts vary, but you should expect this amount to be anywhere from a few hundred dollars, up to one full month's rent.
-We require an escrow reserve of $300.
How Fast Do I Get My Money?
When a tenant pays rent, how quickly does the property management company process the accounting of those funds and pay you?
You want your money quickly! So be sure you will receive it no later than the 15th day of the month.
-We close our accounting cycle on the 10th day of each month and disburse funds through a secure ACH transfer directly into your bank account.
What Are The Guarantees?
Two of the common fears we hear from owners are:
- What if my tenant does not paid rent and has to be evicted?
- What if a pet does damage to my property?
While it can’t be guaranteed that a tenant will always pay on time – will your property management company re-rent the property for free? Or better yet will they pay the legal fees on your behalf?
While it can’t be guaranteed that a pet won’t do damage to the property – will your property management company pay for any of the pet damage themselves?
While guarantees like these are not common – ask “What DO you guarantee for me!”
-We have partnered with a great company that for a minimal fee you are covered and protected for these and more. Click here for details https://potentialrealty.com/guarantees/
Who Handles Evictions?
Although evictions should be rare, if a legal problem must be addressed, does the property management company have a plan in place to assist with the legal issue?
You want to be sure that the company will offer you an answer for ALL legal problems.
Beware of any management agreement language that requires YOU to involve YOUR legal counsel in cases of tenant eviction without any guidance from them.
-Although rare, if an eviction is necessary, we have in place a great program with our partner to pay for the legal process with an attorney from start to finish.
Have A Question?
What the Property Management Agreement Can’t Tell You?
Because Property Management Agreements are written by attorneys to outline the legal relationship between the property owner and the property management company, they can’t tell you what you need to know most.
They can’t describe the most important parts of your new relationship– things like expertise, integrity, honesty, professionalism, communication response time, compassion, wisdom, and the list goes on.
These are the most important things to consider before entering into a relationship with a property management company.
-You are NOT entering into a transaction, as much as you are entering into a relationship. You should have confidence and trust in the person and the company who will be keeping the keys to the front door of your valuable real estate asset.
I hope this information will help you make an informed decision for your property management needs. Please consider me a resource if I can help you in any way.
Potential Rentals and Realty specializes in property management, selling, buying and renting residential properties.
Contact Info
- 863-220-7830
- 954-647-7599
- evalerdi@potentialrealty.com
- 1225 US HWY 27 S. Suite #208 Sebring FL, 33870