Charging admin time for court hearings?

Question

Hello everyone,

As a property manager, we file/post 3-day notices that sometime lead to a court hearing on behalf of my clients.  We currently attend court as part of our fee, but it does take a lot of our administrative time. I want to know if this is a common issue among property management companies. Have any of you experienced this with your managers or in your agreements to charge or bill for admin time?

How did you handle it?

Or is there any other task that are outside of duties of a manager that would warrant billing for admin time?

I appreciate any feedback you can provide. Thank you!

Nathan Gesner · Answer

Welcome to the BiggerPockets forums!

1. Consider joining NARPM. It's not expensive and you'll learn more in one year than you will in ten years of operating on your own. I network with hundreds of managers, many of them with thousands of doors under management or offices in multiple states. If you want to build a profitable business, join us.

2. You can absolutely charge for court representation! Make sure it's fully disclosed in your PM Agreement or Lease Agreement. I don't charge owners for evictions because I want them to know that I will handle any bad tenant that I place. However, I do charge my tenants! I charge the Tenant the cost of the eviction. If they pay everything in full prior to the court hearing, I reduce the charge but they still pay me for my time.

3. You have to set policy for what is included in management and what is considered a non-management task. For example, I coordinate and supervise ordinary maintenance, but I charge an additional fee for renovations, adding a deck, or other work that does not fall within the scope of managing what is already existing. If I pay bills on behalf of the owner (insurance, taxes, HOA dues, utilities, etc.), then I charge a small administrative fee for that.

There are approximately 100 different fees you can charge an owner, and another 100 you can charge a Tenant. You have to know which fees you are comfortable with, that you can justify, and that your market will support.

Nick Faselt · Answer

Thanks for your feedback.

Drew Sygit · Answer

@Nick Faselt our attorneys usually don't require us to attend hearings.

Fortunately, most hearings are now via zoom, which allows our staff to attend while still doing their jobs.

On the occassion we do have to personally attend a hearing, our management contract allows us to charge for our time. We typically only charge if the time exceeds 2 hours though.

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