We recently did our first lease/option with a company who specializes in this type of investment. They usually find the home although we already owned this one and was having a hard time selling it. Someone just moved into it this week We don’t have anything to do with the process. They find the tenants and we never talk to them so we will be paying them a property management fee. I assumed we would sign a property management agreement, but he just told me the fee is for collecting rent and handling tenant issues. There is nothing in writing. I’m just concerned that not signing something is their way of protecting themselves in case something happens so that they have no legal responsibility. What do you guys think…should we have a property management contract?
When you allowed this company to Lease Option the property, did you have the paperwork you signed reviewed by an attorney?
Basically I am asking did you understand what you signed with this company, as there certainly should have been an agreement signed for the management of the property.
There are some companies out there that wind up with the deed to the property and the seller does not even realized this happened.
Just concerned from what you related, this is why I am asking.
No, unfortunately we didn’t have it reviewed by an attorney. It was actually with the Realtor we had the home listed with, but he seems to deal more with lease/options than anything else. He is broker of his Real Estate company and the lease/options is under a completely different business that he owns. The only thing we signed is the lease/option agreement that the tenant signed.
I don’t understand how they could possibly end up with the deed to our home, but I would greatly appreciate any information you have to offer.
My concern was with what you actually signed, if you say it was only a Lease/Option agreement then it still doesn’t address how much is this realtor’s other company charging you to act as your property management company.
It would seem that since this person is licensed a full disclosure is required, albeit this person owns the Lease Option company this does not in my opinion release them from a full disclosure of their responsibles to you as the client.
Not having seen what you signed, at this point I would in writing request the amount you are being charged for this persons services for property management and what services are being provided.
Thank you for your advice. That’s what I thought too, but I wanted to get other opinions. They were supposed to charge us $70 a month for property management, but I just received an e-mail today to send them $750 for the rental finders fee. The finders fee was supposed to be $500 so when I talked to him about it, he said the other $250 was for the property management. They said they were only going to charge us $250 up front instead of the $70 a month which would save us a lot of money. However, this made me even more suspicious because he put in the email that it was for the finders fee (not $500 for finders fee plus $250 for property management). Therefore, if I wrote them one check ($750) for the finders fee, there would be no paperwork or money exchanged for the property management which would leave them free and clear of any legal obligation of managing the property. Thank you!