Questionable clause in management agreement?

4 Replies

I was looking through a local property manager's contract and I found the following clause that seemed a bit suspect to me:

"Owner shall pay all expenses incurred by Agent, including, but not limited to, reasonable attorneys’ fees and Agent’s costs and time, and any liability fines, penalties or the like, in connection with any claim, proceeding, or suit involving an alleged violation by Agent of Owner, or both, or any law pertaining to fair employment, environment protection, rent control, taxes or fair housing; including but not limited to, any law prohibiting or making illegal discrimination on the basis of race, sex, creed, color, religion, nation origin, or mental or physical handicap. Owner shall pay reasonable expenses incurred by Agent in obtaining legal advice regarding compliance with any law affecting the premises or activities of such."

According to my reading of that passage I would be agreeing to pay any legal costs the agent incurred as a result of violating fair housing laws.  Is this normal or am I misreading something.  All thoughts appreaciated

LOL - And this is why I self-manage. Okay I now that attitude doesn't help!

That is exactly how I would interrupt the contract. I know when we looked at hiring a manager there was alot of questionable stuff. They had agree to alter it when we were looking so until it is signed everything is up for alteration :)

@Elizabeth Colegrove thanks for the thoughts.  I suppose it can't hurt to ask to have it changed.  I've heard great things about your podcast, by the way, I will have to check it out the next few days.

thanks for the kind words :) after I threw the contract across the room and got over my snit, I had a professional conversation with them. They were willing to remove all the questionable practices and clauses from the lease! So definitely possible!

That being said, that honestly turned me off even more! At the time, a big part of my job was reading contract for a commercial company. So I was use to it! 

Integrity is a big deal to me! So it bothered me that they were willing to so easily back down. It symbolized to me that they knew it was wrong and were going to see how many people would let it fly under the radar!

That is the point where I decided to try self manage and haven't looked back since!

@Elizabeth Colegrove That might should be the course I pursue.  I manage 11 properties for my parents and I'm not uncomfortable with the idea.  I was thinking of passing this one off because it has a greater potential headache factor since it's a lower income multi-family property.  There is also always the possibility that I will not be able to manage for them in the future and it would be nice to know I could hand the job over to someone trustworthy.