When signing up with a property management company for us to take care of your investment for you, you will first be required to sign a management authority.
This is required for us to be able to act on your behalf, and should contain everything you need to know about both our obligations to you, but also your obligations to us.
I am not going to lie, our own management authority does contain a lot of information, and asks a lot of questions, but it is very important that we get this information at the commencement of the relationship, and it ensures everyone is on the same page.
When we sign a new client up we ensure we spend time explaining the agreement in full, including all of the terms and conditions and as I mentioned the obligations of both parties.
It is common for the agreement to have a minimum length of time, and a cancellation period after the initial term expires, plus of course it should contain all fees which may be charged during the management.
In my role, I often see other companies management authorities and to be honest I am a little disturbed by the conditions in some of them including the authority to charge a fee to the landlord if they cancel the management during a current tenants fixed term tenancy. For example, a landlord cancels the management with ‘ABC Property Management’ and it ends of 1st January, however the tenants fixed term tenancy does not expire until 1st November, then the landlord is expected to pay full management fees to ‘ABC Property Management’ up until 1st November! You will likely agree with me when I say, it seems completely unreasonable to be charged for a service you are no longer receiving!
Another condition to be aware of is the amount of notice required to cancel the management, and this can vary from one month (reasonable in my opinion), to three or even six months, which to me seems a very long time to hold on to a client who is wanting to move on.
Now lets talk about fee structures. These can be charged in several ways, and sometimes a lower weekly management fee which seems great value, can actually be hiding a whole lot of extra fees meaning when you work it out annually you may be paying way more than you initially budgeted for.
I believe in having very transparent fees so there is nothing hiding in ours, however if you are unsure and concerned there may be some hidden fees it is important to ensure you ask before you sign the contract, it is afterall legally binding. Because we offer a few options to our clients I will often calculate the different structures for a 12 month period and present our client with the figures so they can make an informed decision on what works best for them, after all not one size fits all!