Hi bp family! I have a question. The managemnt managing our building is collecting mgmnt fees based ont current rent roll regardless if the tenant pays or not. Is this normal or even fair for owners. All along i thought, it should be based on total rent collected for the month. Please advice... and thanks in advance...
@Mike Malicad That is not normal. Do you have a contract you can reference to see if you signed up for this? Typically management is a % based on rent collected.
Collecting on rent roll is pretty standard. It SHOULD be on rent collected. That would make them more accountable and work more in your best interest. But I guess the idea is that whether someone pays or not, they still have to manage the property and the tenant. In my opinion, if they place a tenant that doesn't pay, they should suffer in their management fee as well. It's not fair for owners, but that's a PM company for you.
I agree it is not normal and not fair. If they are not collecting rent then they are not doing their job.
But of course could be possible. Check your PM agreement....if it is in there then that kind of sucks, probably not much you can do about it now.
@Mike Malicad I won't get into "fair" but it doesn't sound normal to me. I know on mine it's a percentage of collected rents. That said, for all I know your contract is "6% of rent roll" instead of "10% of collected rents". Or they negotiated a percentage of rent roll instead in lieu of having a fee of some kind of place a tenant (not uncommon). Bottom line, it doesn't sound normal to me but "fair" only has to do with the contract that you signed.
Definitely NOT normal. If it were, we all would be investing in management companies lol.