What Is Important — and What a Property Management Agreement CAN’T Tell You
When entering a legal relationship with a property management company, signing a Property Management Agreement is essential. This document outlines the legal terms and obligations involved. Below, we highlight six crucial elements within the agreement that warrant careful review before signing. Be sure to read to the end, as we also disclose the vital aspects that the agreement cannot tell you.
1. How Easy Is It to Cancel the Agreement?
Even though it might seem odd, this is crucial because it indicates how flexible the property management company is if you're not satisfied with their service. A good company won’t restrict you or charge extra if you decide to leave. The best scenario is an agreement that allows you to terminate without any additional charges.
At Davies Property Management, we sign an initial one-year contract that automatically renews to a month-to-month agreement, allowing you to terminate at any time after the initial one-year term with no additional charges or penalties.
2. Are There Hidden Fees in the Agreement?
Make sure the fees are transparent within the agreement. While it’s normal for a company to charge for its services, hidden fees scattered throughout the document may signal a lack of transparency. It’s important that all fees are clear, fair, and easy to understand.
3. How Much Money Do I Have to Place in Reserve?
Understand how much money you need to set aside in reserve. Your Alberta property management company will create an account, known as a reserve, which covers various property expenses. This reserve, typically ranging from a few hundred dollars to a full month’s rent, is crucial for handling costs before or after receiving monthly rental income.
We ask for a reserve of $300 per property.
4. How Fast Do I Get My Money?
Consider the speed of receiving your rental income. It’s important to know how promptly the property management company processes tenant payments and transfers funds to you. A quick turnaround is ideal, and you should aim to receive your funds within the same month.
We complete our accounting cycle by the 20th day of each month and securely transfer funds directly into your bank account via auto-deposit by the 25th of each month.
5. What Is the Maintenance Trigger?
One of the primary reasons to hire a property management company is so that you don’t have to be bothered with day-to-day issues and routine maintenance and repair items.
Eventually, the toilet will run, the sink will drip, and the oven will break.
For the protection of your property and to comply with health and safety laws, your property management company must have strong maintenance protocols in place. These protocols should clearly define when repairs are the tenant’s responsibility versus the owner’s, what constitutes a maintenance emergency, when to repair versus replace, and when you, as the owner, should be involved.
Be sure you understand when you will need to become involved in repair requests.
We handle all repair issues and do not involve you for items under $400.
6. Who Handles Evictions?
While evictions are hopefully rare, it’s vital to understand the property management company’s role in handling legal matters. When faced with a legal issue—particularly an eviction—you should know whether the company will take full responsibility or refer the matter back to you.
It’s advantageous to work with a company that assumes responsibility for all legal aspects, including the preparation and service of legal documents required to initiate the eviction process in Alberta. Watch for any agreement language that places the responsibility on you to retain legal counsel.
In our approach, although evictions are rare, if the need arises, we take charge of the entire legal process from start to finish. This includes the preparation and service of all necessary legal notices, ensuring you are not burdened with legal complexities during challenging situations.
What a Property Management Agreement Cannot Tell You
Delve into the intangibles beyond the Property Management Agreement. While this legal document outlines the formalities of the relationship, it cannot convey the most critical aspects of this partnership.
An agreement cannot articulate the essence of the relationship in terms of expertise, integrity, honesty, professionalism, communication response time, compassion, and wisdom—qualities that are paramount to a successful collaboration. These elements go beyond legalities; they define the character and reliability of the individuals and company entrusted with managing your valuable real estate asset.
Entering into an agreement with a property management company is not merely a transaction—it is the beginning of a relationship. The keys handed over to the front door of your property symbolize a significant level of trust and confidence that should be cultivated through a genuine understanding of these intangible qualities.
Consider these factors carefully before making a decision. Confidence and trust in the people overseeing your property are essential for a smooth and effective property management experience. As you navigate this process, view us as a valuable resource, ready to assist in any way to ensure your needs are met with the highest level of care and professionalism.