SERVICES – PROPERTY MANAGEMENT

Collection of Income:

Hutchins Commercial Realty Ltd.(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.

Leasing Activities:

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 Ltd. 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:

Insurance / Incident Reporting:

Hutchins Commercial Realty Ltd. 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.

Personal Injury:

HCR will advise the owner of any accident that involves actual or possible bodily injury to a tenant or other third party.

Incident Report:

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

or

$500.00 per month minimum during the term of the Management Agreement

Leasing Commissions:

Six Percent (6%) of the total value of initial lease term

Three Percent (3%) of all renewals

What to Expect When Hutchins Commercial Realty Ltd. Assumes Management of a Property:

Upon execution of the management agreement, Hutchins Commercial Realty Ltd. 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: