“DOING BUSINESS THE RIGHT WAY....”

Basic Introduction to Residential Property

Management

2011 PRO LEASING AND PROPERTY MANAGEMENT COUNCIL PRESENTS...

What is it all about?

New Owner Sign Ups

Sign-up Tenants

Marketing the Property

Move-In

Managing the Money

Managing the Owners

Managing the Tenants

Managing the Property

Move-Out

Terminations

Legal Pursuits

Sales Marketing for owners

The Property Management Cycle

Licensed and Unlicensed ActivityWhat’s the Difference?

• Florida Real Estate Commission (FREC)

• http://www.myfloridalicense.com/dbpr/re/documents/Permissibleactivitiesrev092009.pdf

What is it all about?

New Owner Sign Ups

Sign-up Tenants

Marketing the Property

Move-In

Managing the Money

Managing the Owners

Managing the Tenants

Managing the Property

Move-Out

Terminations

Legal Pursuits

Sales Marketing for owners

The Property Management Cycle

Managing the Property

• What are you managing?• What local jurisdiction rental occupancy license

is required, if any?• Is the property governed by an association?• Who do you call for repairs?• What do you need to consider when screening

vendors?

Managing the Property

• What is the age of the property?

• How will you handle emergency repairs...and what is an emergency?

• Who is responsible for turning on and off utilities?

• Routine inspections

What is it all about?

New Owner Sign Ups

Sign-up Tenants

Marketing the Property

Move-In

Managing the Money

Managing the Owners

Managing the Tenants

Managing the Property

Move-Out

Terminations

Legal Pursuits

Sales Marketing for owners

The Property Management Cycle

Managing the Tenants

• Tenant Relations

• Utilize the Lease

• Repair Orders

• Notices

• Renewals

• Move Out

What is it all about?

New Owner Sign Ups

Sign-up Tenants

Marketing the Property

Move-In

Managing the Money

Managing the Owners

Managing the Tenants

Managing the Property

Move-Out

Terminations

Legal Pursuits

Sales Marketing for owners

The Property Management Cycle

Managing the OwnersOWNERS PROFILE – BEHAVIORAL/PERSONALITY STYLE

• NOTE: ATTITUDE COUNTS!

• Analytical/Demanding/Driving/Decisive/Logical/Inquisitive

• Evasive/Worrisome/Cautious/Suspicious/Impulsive/Critical/Impatient/Calculating

• Cooperative/Low Key/Flexible/Trusting/Patient/Diplomatic/ Predictable/Consistent/Conservative

Managing the Owners

OWNERS COOPERATION• Indemnify & Hold Harmless • Property Condition to Good Working Standards• Maintenance and Repairs/Repair Authorization• Reserve Funds for Normal Maintenance• Owners Refusal to Repair • Emergency or Urgent Situation• Written Notification of: Address Change/Phone or Email

Change/Condo Rules or Fee Change• Authority for Approval of Applicant - New Tenant• Owners Authorization to Rent Letter• Security Deposit Claim Letter to Owner• Late Rents - Eviction Hold Off Letter

Managing the Owners

OWNERS COMMUNICATION• One Owner/Partner Designated as Main

Communicator • Home/Work/Fax/Cell/Email• Emergency Contact and Relationship• Do Not Contact Tenant!

Managing the Owners

OWNERS SOLVENCY DISCLOSURES

• Current on Mortgage Payments

• Current on Real Estate Taxes

• Current on Homeowners Assoc Dues

• Current on Condo Association Fees

• Current on Assessments

Managing the Owners

OWNERS INSURANCE• Rental Dwelling Policy, Liability & Compensation • (Minimum 100K per person/300K per occurrence)• Request for Owner to Name your Company as an Additional

Insured, or Certificate of Insurance Holder

DISTRESSED OWNERS – DISTRESSED PROPERTIES• Not Recommended For New Listing• Property Foreclosure Disclosure Agreement• Foreclosure Information to Tenant• Owner Agreement and Authorization to Release Tenant Due to Foreclosure Filing• Owner Escrow Disbursement Agreement in the Event of

Foreclosure Filing

What is it all about?

New Owner Sign Ups

Sign-up Tenants

Marketing the Property

Move-In

Managing the Money

Managing the Owners

Managing the Tenants

Managing the Property

Move-Out

Terminations

Legal Pursuits

Sales Marketing for owners

The Property Management Cycle

Managing the Money

FREC Audit ChecklistFLORIDA ASSOCIATION OF REALTORS®

OFFICE INSPECTION•Copies of all licenses: broker, brokerage, branch offices•Office entrance sign•Agency disclosures

ESCROW/TRUST ACCOUNTS REVIEW•Monthly reconciliation statements (minimum 6 months)•Bank statements and canceled checks (minimum 6 months)•Checkbook, deposit book and bank deposit receipts•Ledger books and/or computer printout of sales and/or property management records, liability lists

FILES•Pending sales contracts•Pending leasing contracts•Voided contracts with escrow funds presently being held•Earnest money deposit disputes•Property Management files, contracts, agreements and leases

Managing the Money

Escrow/Trust Accounts • What is an escrow or trust account? • Generally, for the purposes of the real estate licensee, an escrow account or trust

account is one in which none of the broker’s, sales associate’s or brokerage firm’s own funds are maintained. In other words, an escrow account is maintained by a broker to hold funds belonging to persons other than the broker. Such funds include rents, rental and sales deposits, monies held by a broker to cover things like maintenance, taxes, mortgage payments, for others.

• What do I have to do to have an interest-bearing escrow account? • You need written permission from all interested parties in the transaction. The

account must be insured and maintained in Florida. Additionally, it must be clearly understood who is to be the designated person receiving the interest. When it comes time to disburse the principal amount being held in escrow, it must be transferred into a non-interest bearing account before disbursement can be made.

• Is it permissible to keep extra funds in one’s escrow account? • A broker may place and maintain up to $5,000 of personal or brokerage funds in the

broker's property management escrow account and up to $1,000 of personal or brokerage funds in the broker's sales escrow account. However, when preparing the monthly reconciliation statement, you must specifically mention the overage amount and purpose.

Managing the Money

Collecting and depositing Owner funds to begin a new account

•     Set up fee if any and Owner operating account funds

 

Collecting and depositing application fees from prospective tenants

•     How much do you charge per adult resident?

Managing the Money

Collection of Pre- Move in Funds•     Security Deposit•     Last Month Rent• Pro-rated Rent if lease doesn't start on the

first of the month•     First full Month of Rent•     Pet Fee and Pet Application fee if Applicable

Managing the Money

Collection and disbursement of Rental income monthly

•     When do you disburse to owners?•     How do you disburse to owners?  •     By Check with printed statement  how long

after receipt from tenant? •     Your software provides for E- payments

and online statements?

 

Managing the Money

Payment of Vendor invoices from Owner funds•     What is you repair authority limit?•     How much do you keep in each Owner's operating

account? •     What Vendor files do you require and how do keep

these required forms up to date?•      Vendor agreement with your company•      License•      Insurance for liability ( 500 thousand to 1 Million is

common) and Workers Comp •      W-9 with same name as the company or person you

are paying

Managing the Money

Trust accounts•     Owner Operating Accounting•     Security Escrow account• Company's operating account may not hold

other peoples money!  Release if Security or Last Month Rent

procedures•     Mutual Agreement to use funds before due

date or before claim•     Claim letter after vacancy.  

Questions?

Thank you for attending!!!