Phillip E. Bonham Real Estate
Residential and Commercial Real Estate Services
P.O. Box 12902, La Jolla, CA 92039
702-769-7742
www.ICONAssetGroup.com
PROPERTY MANAGEMENT AGREEMENT (Residential)
THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT – READ IT CAREFULLY
__________________________________________________ (hereinafter called “Owner”), and Phillip E. Bonham Real Estate hereinafter referred to as “Agent”, agree as follows:
- The Owner hereby employs and grants to Agent, or its appointed representative, the exclusive right to rent, lease, operate and manage the property known as:
upon the terms hereinafter set forth, for the Initial Term of twelve months, beginning _____________, 200_ and terminating on the last day of _____________, 20__. This Agreement shall automatically renew for additional twelve month periods at the end of the Initial Term. After the first twelve months of the contract (the “Initial Term”) either party may terminate this contract by giving the other party a sixty-day written notice to terminate.
2. Agent shall:
a. Use due diligence in performance of this contract.
b. Render monthly statements of income, expenses and charges and to remit to Owner all original documents.
c. Deposit all rental income, security deposits, prepaid rent, or reserves collected on behalf of Owner (less any sums properly deducted or otherwise provided for herein) in a trust account(s) in an institution qualified to engage in the banking, savings, or trust business, separate from Agent’s business account(s)
d. Shall send to Owner all remaining net sums collected on behalf of Owner after expenses.
e. Agent is not required to place any funds in an interest bearing account on behalf of owner.
f. Agent shall not be held liable in the event of bankruptcy, insolvency, failure or cessation of operations of such depository.
g. Agent shall not be responsible for paying any mortgage, insurance, HOA dues, taxes or other expenses or payments incurred by Owner except for those items listed herein.
3. The Owner grants to Agent the following authority and powers and Owner shall pay the expenses in connection herewith:
a. To advertise the availability for rental of the herein described premises or any part thereof, and to display “for rent” signs thereon; to sign, renew or cancel leases or rental agreements for the premises or any part thereof; to collect rents or other charges and expenses due and give receipts therefore; to terminate tenancies and to sign and serve in the name of the Owner such notices as are appropriate;
b. To institute and prosecute actions to evict tenants and to recover possession of said premises in the name of the Owner and to recover rents and other sums due; and when expedient, to settle, compromise and release such actions or suits or reinstate such tenancies.
c. To make or cause to be made and to supervise repairs, alterations, and maintenance services and to pay bills therefore. The Agent agrees to secure the prior approval of the Owner on all expenditures in excess of $ 250.00 for any one item, except for normal monthly or recurring operating charges and emergency repairs in excess of the maximum, if in the sole opinion of the Agent, such repairs are necessary to protect the property from damage or prevent damage to life or to the property of others or to avoid suspension of necessary services or to maintain services to the tenants as called for in their leases.
d. In the event expected disbursements shall be in excess of the deposit held by Agent, the Owner, upon 48 hours notice from Agent, shall promptly deposit with Agent funds sufficient to cover any expected disbursements. Expected disbursements may include, but not be limited to, property management fees, utilities, insurance, outside contractor expenses, attorney’s fees, and other such normal and reasonable expenses incurred in the operation and management of like property.
e. In no event, however, will agent make payments in an aggregate amount which exceeds the cash balance in the account, regardless of any late fees that may be imposed by the delay of such payment(s).
f. To make contracts for electricity, gas, fuel, water, telephone, window cleaning, trash or rubbish removal, landscaping, boiler repair, HVAC services, termite or pest services, and other such services as are required for the normal operation of like properties, except where tenant is responsible for such services.
g. In the event of a vacancy, Agent may keep gas, electric and water utilities on in Owner’s name until premises are re-rented. This Agreement is to serve as a Limited Power of Attorney for such purposes as stated in this sub-Paragraph.
h. Upon notice to Owner, Owner shall give Agent the power to act on his behalf with regards to HOA matters. This Agreement is to serve as a Limited Power of Attorney for such purposes as stated in this sub-Paragraph.
4. The Owner shall:
a. Make keep all mortgage and HOA payments current during the term of this Agreement.
b. Indemnify and save the Agent harmless from any and all costs, expenses, attorney’s fees, lawsuits, arbitration fees, damages or claim for damages, including but not limited to those arising out of any injury or death to any person or persons or damage to any property of any kind whatsoever and to whomsoever, belonging to any other person or entity including Owner, or in any way relating to the management of the premises by the Agent or in the performance or exercise of any of the duties, obligations, powers or authorities herein or hereafter granted to the Agent;
c. Carry, at Owner’s sole cost and expense, such public liability, property damage and workman’s compensation insurance (if applicable) as shall be adequate to protect the interests of the Agent and Owner, the policies for which shall name the Agent as well as the Owner as both the party insured and/or the additional insured, and to maintain such insurance in full force and effect throughout the term of this Agreement and any extensions or renewals thereof.
d. Within ten (10) days of signing this Agreement Owner agrees to add Agent to Owner’s insurance policy as additional insured. Owner agrees to continue Agent’s indemnification for a period of six months following the termination of this Agreement.
e. Owner agrees to indemnify Agent for any and all claims which: a) have an origination date, time-of-injury date or claim date which pre-dates the Effective Date of this Agreement; b) any acts, omissions or misrepresentations by any prior management company or agent’s employed by or on behalf of Owner before the Effective Date of this Agreement.
f. Prior to, or within 10 days of, entering into a management agreement with ICON Asset Group, LLC Owner shall provide ICON Asset Group, LLC with: a) any contracts for service or otherwise which may be in force such as HVAC, roof, pest control, HUD or Section 8 tenancies; b) any items which may be germane to the operation and management of the premises; c) an accounting of all tenant deposits held by Owner or it’s Agents and including any pre-paid rent or deposits of record.
5. RETURN OF SECURITY DEPOSITS. If the Owner has decided to retain all security deposits and prepaid rents paid by tenant, once the Tenant(s) vacates the property, the Owner agrees to release ALL such funds back to the Tenant(s) in accordance with Nevada Law Revised Statutes 118.A.242 with no further obligations from Agent. The 30-day period required by Nevada law for the return of the security deposits still applies. The property must be returned in the same general condition as the Tenant(s) occupied the property.
6. Compensation Schedule Paid by Owner to Agent:
- Agent’s fees shall be as follows:
i. The fee is TEN (10%) PERCENT of the gross collected revenue (GCR) per month or a minimum of $90.00 whichever is greater. This amount shall be paid monthly to Company on the 10th of each month based on all rents collected by the 9th of the month; b) any rents due and unpaid in any given month when collected in any subsequent month shall be paid as noted herein at the time of collection; c) any rent collected subsequent to eviction or termination of a tenancy shall be paid according to either a) or b) above. This amount shall be deducted from the monthly rent payment with the balance of the rent sent to the Owner.
ii. Owner shall pay agent:
1. A fee equal to twenty-five (25%) percent of the first months rent as a rental fee for each signed contract to rent Owner’s property. Agent shall use its best efforts to keep property rented. This amount shall be deducted from the first monthly rent payment with the balance of the rent sent to the Owner.
2. A fee equal to twenty-five (25%) percent of the monthly rent at time of renewal, extension, or rewriting of any existing or subsequent leases. This amount shall be deducted from the first monthly rent payment with the balance of the rent sent to the Owner.
3. Owner shall provide an initial maintenance reserve fee of $250.00 to be used for costs associated with maintenance or upkeep. Owner shall at all times keep a minimum of $250.00 in this account. This amount shall be deducted from the first monthly rent payment with the balance of the rent sent to Owner.
4. All filing costs, fees and other items relating to eviction or late payment process filed on behalf of Owner against tenant.
iii. Agent to keep all late fees and collection fees.
iv. This service is optional. Owner to indicate where applicable by placing initials in choice: ______ yes or ______ no. If property is vacant Agent can drive by and physically inspect property once a week for $40.00 per month until rented. This fee is paid on the first day of each month and is not prorated if property is rented during the month. This helps to ensure (but does not guarantee) that property is not being occupied or vandalized while vacant.
v. In the event Owner’s shall request Agent to undertake work which exceeds usual and normal management functions, then an additional fee shall be required and agreed upon before such work or services are performed. Normal management does not include modernization, refinancing, fire restoration, obtaining tax services or advice, presenting petitions or plans to zoning, housing authorities, advising on proposed new construction, rehabilitation of existing units, or other tasks outside of normal property management duties.
7. Notices. If it shall become necessary for Agent or Owner to give notice of any kind, the same shall be in writing and my be delivered by: a) USPS; b) hand delivered; c) e-mail; or d) facsimile, and sender shall obtain proof of delivery to recipient by whatever means is customary for the delivery method used.
8. Notice of Default or Foreclosure: Owner hereby grants to Agent the right of Agent to file with a title company of Agent’s choice or with the San Diego, CA County Recorder’s office the right of Agent to receive notification of default (NOD) or notice of foreclosure filed against Owner’s property. Upon receipt of such notice Agent shall then inform Owner’s tenants of such notice. Owner agrees to indemnify Agent against any and all claims that may be filed by tenants against Agent and/or Owner due to such default or foreclosure.
9. Binding Effect. This Agreement shall be binding upon the successors of the Agent, and the heirs, administrators, executors, successors and assigns of the Owner. In the event of notification of bankruptcy proceedings relating to the Owner Agent shall cooperate with the proceedings and may petition the Court to remain as a compensated property manager for the duration of the proceedings.
10. Binding Arbitration. If either party herein brings an action to enforce the terms hereof or declare rights hereunder, the non-prevailing party in such arbitration shall pay all the costs associated with such action including attorney’s fees, witness fees, and other customary and reasonable costs as determined by the arbitrator. The parties hereto agree that the State of Nevada, County of San Diego, is the proper jurisdiction for arbitration of any matters relating to this Agreement and service to the parties may be made either by personal service or mailed return receipt requested. The parties shall use the services of the American Arbitration Association.
11. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN THIS AGREEMENT. IF YOU NEED LEGAL ADVICE AS TO THE VALIDITY OR ADEQUACY OF THIS AGREEMENT OR YOUR RIGHTS AND OBLIGATIONS HEREUNDER YOU ARE ADIVSED TO CONSULT AN ATTORNEY.
12. Amendments. This Agreement may only be amended in writing executed by the parties herein. In the event that any clause in the Amendment conflicts with this Agreement then the Agreement shall prevail.
13. Entire Agreement. This Agreement represents the entire agreement and understanding of all parties who have executed this Agreement below. Any changes to this Agreement must be made in a written form captioned “Addendum to Property Management Agreement” dated as of the full execution of this Agreement and signed and dated by all parties to the original Agreement. This Agreement must be signed by all parties of record as shown on title.
Parties acknowledge having read the foregoing prior to execution and the receipt of a duplicate dated this ________ day of ___________, 2008. Parties also acknowledge that this Agreement must be fully executed, signed, dated and accepted by Phillip E. Bonham Real Estate to be a binding Agreement.
THIS AGREEMENT HAS BEEN ACKNOWLEDGED AND ACCEPTED BY:
Phillip E. Bonham, J.D., Broker DATED:
Phillip E. Bonham Real Estate
OWNER OWNER
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