To protect yourself, you should ensure that there is a “due diligence” clause in the agreement. For example, the manager is not responsible if the recruitment of a third party has been the subject of “due diligence”, even if he has to do his research and he should not hire a contractor with a history of complaints against him. Do not immediately exclude a property manager because it appears that they charge higher fees. Property managers who charge lower upfront fees may charge more for “additional tasks” such as filling positions, paying bills, maintenance problems and evacuation procedures. You should read the administrative agreement very carefully to determine which services are actually included in the administrative costs and which services are considered extra and require additional payments. You are looking for a contract that does not require a reason to terminate the contract. You also want a clause where you can terminate the contract without penalty if the management company does not find a customer within a specified time frame. They want to ensure that the administrative agreement contains a section indicating that they support equal housing opportunities. It should be said that they will follow both government and federal fair housing laws. There should also be a list of tasks that need to be completed after the end and the window of opportunity in which it should be completed.
For example, the property management company must provide the owner with copies of all leases within 14 days of the termination of the contract; or that all the money owed to one of the parties must be paid within 30 days of the termination of the contract. As a general rule, you must terminate between 30 and 90 days in advance to terminate the contract. Make sure that the agreement also stipulates that the property management company must give you at least 30 days at least 30 days in advance if it decides to terminate the contract. You often have to pay a fee for early termination of the contract. This fee ranges from a few hundred dollars to the payment of all costs that the management company would have accumulated over the remaining term of the contract. The second part of the contract that you need to understand is your responsibility as an owner. This part of the contract defines what you have to do by signing the contract and what you prevented from doing. If you hire a property manager, you should check the management contract carefully. You must ensure that you understand the responsibilities of the administrator, the responsibilities of the owner and make sure that you are protected if the administrator does not meet his obligations. You want to try to avoid signing a long contract until you have proven results from the management company and you have confidence in it. Unfortunately, most management companies will not sign a contract for less than a year. In this case, you should carefully consider the termination clause and ensure that you can terminate the contract if you are not satisfied with the service.
Make sure the administrative agreement has a clear termination or revocation clause. It should indicate why and when the director or management company has the right to terminate the contract and when you, the lessor, have the right to terminate the contract. For services considered extra, the agreement should clearly define how these obligations will be charged to you. Is it a flat fee, a percentage fee, or is the fee set on a case-by-case basis before the service is provided? The first basic part of the management contract that you need to understand is what services the trustee is willing to provide and how much they will charge for those services.