Key Changes to New Management Agreement

LEGAL REQUIREMENTS

As a real estate firm, we are now required by law to inform you of which licensed brokers are working for you. We operate using a team approach, so at any given time, you will have five or more people working for you.  Only the licensed brokers are required to be disclosed on the agreement.  We included the Law of Real Estate Agency pamphlet that outlines this, as required by law.

Many of our agreements we are still operating under are as our "Doing Business As" which is Kitsap Property Management. While this is still legal and valid, I would like to get them updated to the firm name REally Property Management for continuity as companies like Puget Sound Energy have been a bit confused when we call to swap utilities over during vacancy.

OPTIONAL EVICTION INSURANCE

I’m pleased to announce we have found a way to offer actual eviction insurance. As your dedicated Property Manager, our role is to safeguard your rental home from potential damage. While we have a strong track record, unforeseen circumstances can arise. A good tenant could lose a job, get divorced, and suddenly stop paying rent, or a disgruntled tenant could cause significant damage. This is where our new service can provide added protection.

Now, you can be covered for attorney fees, lost rent, and malicious damage. There’s only one insurance company in the U.S. that reimburses you for Tenant Malicious Damage: SureVestor. This is completely optional, but we can now give you the opportunity to cover yourself.

Here is a link to the flyer summarizing coverage.

Here are frequently asked questions about this coverage.

If you decide not to enroll your rental now, this can be added at any time later on if you change your mind (and visa versa), so long as your tenant has not been late for the previous two months.

OUR COMMITMENTS

We guarantee we will conduct at least two property maintenance inspections at every rental every year.

We guarantee you will not pay a leasing fee more than once in a calendar year. This is helpful, especially in a military town, if the tenant breaks their lease early. 

We will move to a month-to-month contract after the initial year because we believe that it's up to us to prove our worth and keep you as a client. No more getting locked into year-to-year contracts with termination penalties. If you sell during that first year or move back in, the contract will automatically terminate.

We reduced the referral fee for selling the rental to a tenant we place from 3% to 0.75%! Which equates to what a broker would generally pay as a referral fee, or waived if we help with the sale.

LIABILITY INSURANCE REQUIREMENT

In the unlikely event a tenant gets hurt due to a defect in the home and sues, your home insurance liability policy covers a lawsuit. Most policies are only listed at $300,000 which is not very much in today's lawsuit happy world.

To help you minimize costs, we participate in SureVestor's Master General Liability program. This coverage only costs $11.47/month and provides you with $1 million in liability coverage. It also protects us as your property management company against liability for defects in the rental. If you don't want to participate, we will need to call your current insurance provider to add us as an additional insured, make sure your coverage is adequate, and provide us with a copy of the policy. More information on that can be found here.

(As a side note, we have already required all your tenants to enroll in a tenant liability insurance policy for damages they cause).

MAINTENANCE & UTILITY RESERVE INCREASE

To speed up the distribution of rent payments to you, we need to have reserves enough available to pay bills after distribution. We are requesting an increase to the reserve amount held with us to $750 (or $500 per unit if you have multiple properties with us).

Considering the cost of vendors and utilities these days I feel like that is appropriate. If you want to slowly increase your current reserve to that amount, I can work with that.  We had many issues with water/sewer companies making payment plans with tenants, which stopped our office from getting past-due notices. When the tenants move out, if there is a past due amount it sticks with the property, not the tenant. We have been transitioning all tenants to pay the water bill through the portal as a reimbursement so we know immediately when it's not been paid, and do something about it proactively.

The rule of thumb for investors worldwide is to build up the property’s reserves by 10% of its income every month. That goes to the long-term costs of things like appliances, new paint, new flooring, etc. It is our recommendation that you budget accordingly with your own savings account. If you would prefer a hands-off approach to this, we can now help by building your reserves on our end; just ask me about it. We do not make any interest off reserve funds; it’s held in our Trust account.