Morton Grove, IL · Member since 2016 · 36 posts · 5 votes
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...
Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
9y
@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.
Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
9y
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.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
@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.