Hi everyone, I had a question about property management companies. I read somewhere that with property management companies you want to make sure that your a signer on the bank account. A few companies I have talked to said they don't do that (they are a large property management company). It makes sense to me to be on the account in case anything goes wrong.
What are your thoughts?
I don't know anyone that would allow you to be a signer on their bank accounts with hundreds of owners monies! They makes no sense at all. Do you mean your own account for your propertied you keep funds?
I think I need more info here. I have the ability to give owners visibility on the accounts. The last several times I asked a local bank to setup checks to require 2 signatures they stated they dont offer that service unless it was limited to very high dollar checks.
No worries, that is why I'm asking. The information I received was from a book. Thanks!
@Shelly Doris and @Kim Meredith Hampton
Another question, also in the book it states to make sure that the property management contract has a clause so you can give a 30 day notice to the property management company for non-performance. Is that normal? I have been reviewing a few different agreements and don't see anything in there that the owner can give notice.
@Aaron C. it depends on the management company, but do see that very often. In my contact, either party can give a sixty (60) days notice at any time. There are times when people are not in love anymore or their circumstances change. Needs to be an out for either party
Giving 30 days notice is normal. Giving Landlords access to bank accounts is the most ridiculous thing I've heard. What book are you reading?
As a PM I open a designated "trust" account for every owner / property. The owner does not have signing authority. I provide monthly statements and owner distributions of funds (less expenses and reserves)
Here's some info from on Broker Trust accounts for California.
Do a google search for "ca dre broker trust account" for more info.
A David Lindahl book @Nathan G.
WE allow a 30 day notice on our management contracts because we really dont want to work with someone who doesn't want to work with us. However, we have a better rate to rent properties for those on a contract and offer additional services included, such as full move-in inspection, etc. So those would have to be paid at the non-management rate if they break the agreement in the first year.
I had someone who only wanted us under mgmt agreement when the leases came due, and then wanted to cancel, instead of paying the a la carte price..
The only reason why I was asking is incase if the property management company doesn't hold up their end of the bargain there is no out for the owner. @Christine Kankowski
Many PMs don't share their bank accounts with owners. They provide monthly statements along with the transfer of money to the owner on a regular (monthly) basis. I don't know a reason why an owner would need access to a PMs bank account. Even for view only. The bank account contains transactions for all the owners under management.
I think a 30, 60, or 90 day notice timeframe are all reasonable. Really depends on the size of the contract and what works for each party.