Management Fees on utility expenses?

[Stephan Mayer]

Recently my property management has started to collect utility expenses for me on a triplex that does not have separate electricity and water meters. That‘s good. However, to my surprise, they are now charging management fees for the collected utility expenses, in addition to management expenses on the collected rent. Is this normal/common?

Our management agreement reads ‘’…x% of the owner’s share of monthly gross receipts from the operation of the property…Gross receipts are all amounts received from the operation of the property including, but. Or limited to, rents, parking fees, forfeited deposits, laundry income and fees.’

So, to me this reads like a % of the operational income, but utilities aren’t an operational income, are they?

I’m very curious to hear your experiences and interpretations.

Thank you in advance

[Dave Poeppelmeier]

I agree with @Drew Sygit. If your PM is doing that, they have to make sure the bills are sent to them, have staff open the bills, go online or call in to pay them, scan them and send you a copy, then file them away. Now multiply that by hundreds. Yes, there is a cost to paying utilities for owners, but it should be specifically outlined in your Property Management Agreement. If it's not, then have a conversation with them and see what you want to do. If you don't want them to handle it for you, then just have them send the bills to your personal address and take care of it yourself.