SERVICES - PROPERTY MANAGEMENT
Collection of Income:
Hutchins Commercial Realty (HCR) will have primary responsibility for the collection of rental income in accordance with the terms of the related leases and contracts. Any delinquent income will be identified in a prompt manner and collected. Any uncollectible income will be identified and brought to the attention of the owner with recommendations for added actions.
HCR will establish a single bank account to be used for the daily operations of the property. All rental income and other income collected from property operations will be deposited into this bank account.
Operating Expense Disbursements:
All normal, recurring operating expenses will be disbursed in a prudent and cost effective manner. In cases where goods or services exceed $1,000.00 or are not recurring, HCR will contact the owner for approval prior to engaging the vendor.
All existing lease agreements will be compared to the appropriate standard lease (Owner’s lease or a standard commercial lease) to note contrasts and to assure compliance by tenants and the management company to the lease terms. The existing leases will be converted to the standard lease at the earliest practical time.
HCR will register any and all prospects. HCR will handle all negotiations in accordance with predetermined guidelines as agreed to with the owner. For residential property, leases will be executed by HCR as agent for owner under predetermined guidelines.
Recommendation and Supervision of Capital Expenditures:
Capital improvements for a property include tenant improvements, property improvements to maintain values, and those to enhance values. HCR’s recommendation for such improvements will include a cost/benefit analysis to justify spending the capital dollars with sufficient evidence to substantiate the estimated cost.
With owner approval, HCR will oversee the progress of the contractors to assure quality and timeliness of work. Any “change orders” will be submitted to the owner for approval.
Engagement of Vendors / Maintenance of Property:
Hutchins Commercial Realty will review all vendor contracts in place and evaluate the cost and content of the agreements. If possible, all vendor assignments will be converted to HCR Standard Service Contract.
The following property maintenance information will be developed and updated by HCR:
- Work Order Log which lists all of the work order requests, the status of the work and length of time to respond to the request.
- Preventive Maintenance Program which details the maintenance staff procedures regarding the grounds, parking lot, parking garage and buildings.
- On residential properties, a Make-Ready Status Report, will be provided concerning the condition of all vacant units, and will be posted in the manager’s office.
- All vacant space in each property shall be kept clean. HCR will see that all trash and debris are removed, floors vacuumed, tile floors cleaned, windows washed and other general clean-up performed.
Insurance / Incident Reporting:
Hutchins Commercial Realty will notify the owner of any significant insurance or injury related activities which involve the property.
Damage to Real Property:
Any damage to the property will be communicated to the owner. HCR will assist in obtaining any and all information.
HCR will advise the owner of any accident that involves actual or possible bodily injury to a tenant or other third party.
If any incident occurs on the property that results in property damage, physical injury, theft or reasonably warrants being reported, HCR will complete an Incident Report. The completed report will be submitted to the owner.
Management Fee Structure:
HCR proposes to offer its management services, as presented in the previous pages, to the owner for a monthly fee calculated as follows:
Five Percent (5%) of the total income collected
$500.00 per month minimum during the term of the Management Agreement
Six Percent (6%) of the total value of initial lease term
Three Percent (3%) of all renewals
What to Expect When Hutchins Commercial Realty Assumes Management of a Property:
Upon execution of the management agreement, Hutchins Commercial Realty. will perform an in-depth inspection of the property and assume control of operations and accounting. This inspection will be documented on the Takeover Procedures Checklist. A completed copy will be sent to the owner.
HCR addresses the following activities during the property takeover:
- Notify tenants or residents and vendors of the change in property management.
- Review and refine procedures for the security of the property including:
- Issuance of keys
- Night patrolling of the property, if applicable
- Access to the parking lot/garage
- After hours access to the property
- Parking lot lighting
- Review building access hours as established in the existing tenants’ leases.
- Inventory all building materials and other assets that are on-site, if any. (List will be submitted to owner.)
- Review rules and regulations for the building as detailed in the lease agreements and tenant handbooks.
- Create a project file containing copies of all key documents related to the property.
- Notify the owner of any lease violations by existing tenants.
- Verify building insurance coverage.
- Locate all plans, blueprints, site plans, and warranties that are available for the property.
- Enter all tenant and financial information into property management system.
- Develop a marketing plan for the project.
- Verify that all systems are compliant to reasonable guidelines, including HVAC, energy management, sprinkler system monitoring.
- Prepare market study to compare the rental rates and amenities offered by competing properties.
Provide leasing activity reports.
- Repaint or erect outdoor signs with the name of the property, space available, and HCR logo and phone number.
- Design property brochure.
- Commercial properties would be added to the HCR Advertising and other publications, and sent to prospective tenants. HCR cooperates with all Brokers.