Property managers offer a wide variety of services to commercial property landlords. Their services are bespoke and priced accordingly. If a landlord habitually uses a property management company, fees are recharged to the tenant. Equally, if a landlord begins a contractual relationship halfway through a lease, the tenant will be recharged. Depending on the services provided, the landlord will either pay a flat rate or a fee per service.
Landlords should read the property management contract very carefully and run it by a lawyer. A lawyer can review the contract and spot any potential pitfalls for the landlord. Some contracts will include extra service charges that can be avoided. One pitfall could be having to pay the property manager a percentage of the sale of the property. Always run your contract by a property lawyer before signing it.
Fees included in contracts between the landlord and property management company need to be carefully reviewed. If the tenant is recharged for management company fees, some of those fees might be deemed unreasonable. In which case, the tenant will likely apply for a first tier tribunal (FTT) to have those charges reduced.
Some of the services a management company charges include:
Look out for clauses in respect of the purchase of the property’s freehold. Equally, if the landlord decides to sell the property, the management company might be entitled to a percentage. Another area of the contract that needs bearing in mind is property repairs. According to the lease agreement, is the landlord responsible for repairs? If so, the tenant should not be recharged for the management company’s repair fees.
Are you a landlord looking to engage the services of a property management company? Please get in touch with one of our property lawyers. Before signing a contract, we’ll review it and give you our expert legal advice. SG
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