Operating Policies

This overview of our operating policies is to help clarify what, when, why, and how we operate in order to fulfill the management agreement, best operate, and successfully manage your property. We hope the explanations found here are simple and easy to understand. Please let us know should you have any questions or need further clarification.  For reasons of simplicity, the property owner(s) listed in the management agreement will be referred to as "client" in this overview. 

Because of changes to market conditions federal and local requirements, or best practices, these operating policies and terms are subject to change.

Owners: 

Many properties are owned by two or more people. To make managing your property more efficient, approval by any person listed as "Owner" on the management agreement for any action or decision shall be sufficient for all owners. One or more owners of a property are considered our client.

Rents & Deposits:  

All security and other deposits are held in a Property Management Trust Account. We control the deposits and refund all remaining deposits to the tenant(s). We are not liable for bankruptcy or failure of the depository or for uncollected rents as we can't guarantee rents or other rental income. Evictions and collections are not the norm and are the exception. However as they do happen, we will attempt to collect unpaid balances left by tenants or other parties through our own efforts or the efforts of our attorneys or collection agencies. Where possible, we will add the attorney or collection agency fees to the total balance owed (up to 40% of the balance). This allows for most or all of the fee charged by the attorneys or collection agencies to be covered by the tenant's payments. Additionally for our efforts, we will charge 30% of the remaining balance for our efforts. In essence, where we are able to collect payment in full for the balance plus collection fees, our clients should expect to receive 60-70% of the balance. Monies collected through collection efforts are generally first applied to fees, maintenance or repairs, and lastly rent.

Account Balance & Account Deficits:  

The owner reserve referred to in the management agreement are funds used for utilities, maintenance, repairs, and monthly expenses.  We use future rental income or any disbursements due to the client to replace used reserve funds. We will use future rental income or any disbursements due to our client to pay for any bills outstanding on the property (utility bills, HOA dues, maintenance invoices, management fees, etc). Should the client's account not have sufficient funds to cover outstanding bills, the client will need to have the outstanding balances paid within 15 days of being notified via monthly statement or other communication. Should the bills be left unpaid after 30 days of receipt, we may notify the client of such and provide a specified time period for the client to pay the balance in full. Following this specified period, if the balance is not paid, we may draw sufficient funds from the client's account on file to cover such bills. We may further our own funds or other escrowed funds to lend to the property owner's account with an added finance fee of 15% plus ongoing interest of 5% monthly until paid in full. 

Maintenance & Repairs:  

Maintenance is an area of concern to most property owners.  We strive to do everything we can to minimize cost and headaches for our clients, while adhering to local regulations and requirements.  You have hired us to make or cause to be made all decorating, maintenance, re-keying of locks, alterations and repairs to the property as reasonably necessary, and to hire and supervise all employees and other labor for the accomplishment of the same. 

  • Re-Keying of Locks:  To reduce your liability and increase tenant safety, we control the cuts to the keys and each new set of tenants will receive a fresh set of keys. The first time we rekey a unit, we will install new Smartlocks. Although this initial rekey is an investment, each rekey thereafter is very reasonable and you will save money.  For liability and security reasons, it is very important to us that we control the keys.  We only allow the tenant and our office to keep copies of the keys to a unit.  For liability reasons, if our client retains a key, they agree to not enter the property or lend the key to anyone without our permission, including to real estate agents, contractors, or any other person.
  • Normal Wear & Tear: There is often some minor items that need to be completed between tenants that may not be charged to a tenant. There are also minor items we will see that need to be complete during a time of vacancy in preparation for a new tenant such as light bulbs, smoke detector batteries, minor cleaning, etc. Normal Wear and Tear means the deterioration that occurs based upon the use for which the rental unit is intended and without negligence, carelessness, accident, misuse, or abuse of the premises or contents by the TENANTS, their family, or their guests. We consider the following items as Normal Wear and Tear: nail holes used to hang pictures, minor spot painting between tenants, traffic wear in carpet, carpet replacement after 5-7 years, scuffed hardwood floors, sometimes minor cleaning between tenants, worn toilet seats, re-keying or replacement of worn locks, blind replacement due to sun damage or paint flaking, caulking or any other similar maintenance.
  • Service Requests: We do our absolute best to keep your financial interests in mind and will approve necessary work orders as they come in. You are notified via email when a new service request is submitted by the tenant or by our team. You are welcome to reply or call with any questions.
  • Maintenance Limits and Restrictions:  We will not exceed $300.00 for any single item without the express consent of the client, except for monthly recurring operating charges, emergency repairs as may be required because of danger to safety of tenants, occupants or the preservation of the property, or in the event the client is not reasonably available for consultation, or as outlined in this section.  If, in our opinion, the repairs or maintenance are deemed to be an "emergency" or “High Priority” (i.e. necessary to protect the property from damage, to prevent damage or risk to life or limb, to maintain services to the tenant, or to comply with applicable laws and other requirements), we may proceed with the repair or maintenance without prior notice to the client. 
  • Hiring of Vendors and Maintenance Personnel:  Our clients hire us to hire, discharge, and supervise all contractors and vendors hired to service the property. We require that maintenance personnel and vendors are licensed, insured, and screened by our team so we can know better who will be working on our properties and interacting with our residents.  For liability, workers comp, insurance, and other reasons, we discourage our clients from doing their own maintenance or hiring their own contractors.  
    • In the event a client hires or manages a work order on their own, we can charge a reasonable administrative fee to our client for our coordinating and arranging of such maintenance.  A similar fee may be charged if we receive estimates from a vendor or vendors and our client decides to hire their own vendors.
  • Habitability: Because of strict habitability and security issues, we require that after any change of occupancy of tenants, the locks on the Property be re-keyed, carpets be professionally cleaned, and the interior of the property be professionally cleaned (this also applies when occupancy transitions from owner to tenant). We may designate a third- party professional to perform the cleaning, carpet cleaning, and rekey at the property owner's expense (cleaning and carpet cleaning may be charged to tenants between tenancy). 
  • Property Standards:  The property is to be maintained at all times in a condition which will increase rental and/or property values, reduce vacancy time, and promote higher quality housing overall. Click Here for a list of our minimum property standards. 
    • These property standards are subject to change as required by local agencies and to facilitate improved practices. We reserve the right to refuse to lease the property should the condition fall below an acceptable level until our client agrees to make recommended improvements.
  • Home Warranty: If our client maintains an active home warranty on the property, we will make a reasonable effort to coordinate applicable maintenance through the home warranty company. However, due to our inability to dictate or control a home warranty company's ability to act promptly and to perform as required by our policies, lease agreements, and/or by state and federal statutes, we maintain the authority to repair and hire to be repaired as outlined in the agreement. In the event of an after-hours or emergency maintenance call, we maintain the authority to repair and hire to be repaired as outlined in the agreement.  Due to the increased time and resources it requires, we reserve the right to charge a reasonable administrative fee to coordinate with home warranty companies.

Advertising & Leasing:  

All advertising of rentals is at our discretion.  Advertising tools may include but are not limited to property lists, internet postings, signage, internet web site usage, and networking resources. We reserve the right place a lockbox on the property and make the code available to staff, contractors, and other parties at our discretion. In order to secure a tenant more efficiently and effectively, the lockbox code may be available to prospective tenants for viewing the property without being accompanied by the manager or Manager’s agent so long as Manager has followed procedure to register each prospect with its or its partner system, properly pre-screen and verify prospective tenants, or other methods of verification and/or registration as determined by Manager.

Showings:

  • Occupied: When a unit is occupied by either our client (prior to moving out) or a tenant (after they gave notice), unlike many companies, we will do many pre-vacancy leasing activities to reduce vacancy time. When we advertise the unit for rent, we will also disclose that it will remain occupied until an availability date. Showings are handled by scheduling appointments with the occupant and the prospective resident. The prospective resident will view the unit by the current occupant allowing them access. Often times a Keyrenter representative is not present for these showings.
  • Vacant: In most cases, we do our vacant showings through a secure lockbox verification process. This allows tenants to view the home at their convenience which will reduce vacancy time, reduce leasing costs, allow for more viewings, and track who’s viewing and when.
    • How are Lockbox Showings Secure?
      • Thorough Registration Process
      • Driver's License and/or credit card info on file
      • Person must be on site to get code
      • Code only works for 1 hr
      • Only good from 8am - 8pm 7 days per week
      • They have to check in and out
      • We check on the home regularly
      • In the extended time we have been doing this we have not had issues with security or vandalism.

Disbursement of Funds & Statements:  

We make disbursements from our client’s funds for repairs, maintenance, utilities, materials, banking costs, collection fees, legal fees, late fees, deposits, management fees, client contributions and draws, and any other disbursements needed to fulfill the agreement. In the case the disbursements and charges are in excess of the receipts, our clients agree to pay the excess promptly. We are authorized to initiate debit/credit entries for payments owed to and from our client’s account on file. 

We provide to our clients monthly and yearly statements accounting for all expenses, income, management fees, client contributions, and draws. We are responsible for preparing annual summary reports referred to as "Year-End Reports" and to send them to our clients along with 1099 forms each year for the preceding year. At our discretion we may hire a 3rd party company to electronically process and distribute 1099 forms.

  • Full Month Accounting:  Unless our client's property has been grandfathered in from our previous accounting method, we operate on a “full month” accounting system. In other words, we close our books on the last day of each month. Here’s how it works: If we collect April rent on 4/1, we pay all expenses authorized by our contract with our client and then close our books on April 30.  We then process an electronic funds transfer of the balance of funds (less the required minimum account reserve) to our client on or about May 1st. Our client's monthly statement for April is then emailed to at the same time we initiate the payment to our client (takes 3-4 business days to deposit). 
    • Why?:
      • We want our clients and their accountants to be able to understand their statements easily, without confusion. This should be one of our client's top priorities as it is the primary responsibility of a property owner. Owner statements are confusing and messy if they cover parts of two different months.  Having a statement that covers the full month after the month's closing simplifies them (accountants strongly encourage this). It's very important that the owner statements accurately reflect all activity in any given month.
      • Full Month Accounting allows our clients to better plan financially and forecast.  If there is ever a collection problem with a tenant, our clients will know far ahead of time and will be able to plan for the shortfall, should it occur.
      • There are circumstances where a tenant pays their rent and prior to the funds clearing, we have already paid bills for the client and processed a payment to the client for the difference. If the payment were to bounce (NSF, reversed payment, or bad account), our owner's balance would be negative leaving our trust account in a negative situation. Removing this situation as a possibility is of the utmost importance and priority. 

Communications/Client Involvement:  

In order for us to be successful at managing the property, lease, and tenants, we must handle all communications with any tenant.  Our clients agree that they will not communicate directly with the tenants or modify any term of the lease agreement (or any other related document signed by us and the tenant), or make any other oral or written assurances to the tenant without the our approval.  Any communication by a tenant to our clients for any reason must be directed to us.  Our clients agree to indemnify us for any damages incurred as a result of a tenant’s reliance upon an unapproved modification authorized by our clients. 

Homeowner's Associations

Due to challenges associated with homeowner’s associations ("HOA") and their affiliated management companies, we will not be liable for the failure of our client or tenant to comply with HOA rules, regulations, or covenants codes and restrictions ("CC&Rs") or for any associated fees, costs, or penalties assessed for noncompliance. However, we will work in good faith with the HOA/management company, client, and tenant in attempting to comply with HOA requirements. Our clients further agree to notify any governing HOA that we are the primary contact for any violation concerns and to include us on any mailings/notices sent by the HOA. Since it is not a part of normal management responsibilities, we will not attend HOA meetings unless agreed upon and our time billed and invoiced to our client.

Indemnification:  

In addition to the indemnification clause of the management agreement, the following also applies. We discourage our clients from leaving any personal or other property on the premises (ie. furniture, yard equipment, audio/visual equipment, items left in storage, etc.) for the risk of them being damaged or misplaced. Our clients acknowledge that we do not track such items and we do not hold tenants responsible for these items either.

Pricing & Fees:

  • Hourly Rate for Additional Services: There are some instances where we are asked by our clients to do work that is not included in our normal scope of services.  For these items we either provide an estimate or bill at an hourly rate. Some examples of these additional services may include providing on-site management, supervising and coordinating modernization, rehabilitation, fire or major damage restoration projects; obtaining income tax, accounting or legal advice; advising on proposed new construction, assisting our clients to sell or refinance, counseling, or attending Homeowner's Association meetings and the like. If our clients desire for us to perform these types of services, the cost of such will be agreed upon prior to us performing the work. 
  • Evictions: The costs associated with an eviction are passed onto our clients plus applicable administration fees.  Much of the costs of eviction are waived if our clients are enrolled in our exclusive EvictionGuard® program and have met the terms of the program. The cost of an eviction varies on the dollar amount submitted for judgment, whether the tenant contests the eviction, and other circumstances. Typically it will range from $500-700. 
  • Swamp Cooler Service:
    • Each Spring and Fall it is important that your swamp cooler (where applicable) is shut down and setup properly.  In the Fall they are drained, covered, and the water lines shut-off, drained, and disconnected. In the Spring they are uncovered, reconnected, turned on, and tested.  
      • Cost per service: $75/unit + parts (if applicable)
  • Sprinkler Service (if applicable):
    • Each Spring your sprinklers will need to be setup, and tested. Your main lines are turned on, zones are all tested, timers are set, and any adjustments are made.
    • Each Fall you will need to have your sprinklers winterized in order to prevent freezing and damage. Sprinklers are shut off at the main stop-and-waste, valves are turned off, and the lines are blown out with compressed air. 
    • If your property does not have a sprinkler system, or it is maintained by an HOA, we will not perform this service for you.  We do not allow tenants to perform this service for liability reasons and because it is very important to verify it is done properly to avoid damage.
      • Cost per service: $75/system + parts (if applicable)
  • HVAC:
    • Furnace filter change and unit configuration and testing. $50 
      • Included at no charge if completed with Inspection service.
  • Inspection Services:
    • Although there are many inspections included in our general services (move-in, move-out, vacancy inspections (1-2 per week), etc) there are routine inspections which are completed twice per year to add value to your investment and ability to stay informed and make decisions as a landlord.
    • Interior Inspection Services: You will receive 2 full interior/exterior inspection reports with a complete set of pictures and/or video documenting condition, maintenance concerns, lease concerns, and other items. The main goal is to ensure the tenant is taking care of your property and that your property is taking care of the tenant. This inspection packet is uploaded to your "Owner Portal" login through our website. 
    • We also change the furnace filters and test the HVAC for functionality prolonging the life and efficiency of the units.
    • More on the importance of routine inspections. Click Here
      • Cost per inspection: $75/unit (includes HVAC service described above)
  • Landscaping:
    • Yard Care and Snow Removal (While Vacant)
      • When your property is occupied the tenant is responsible for all yard maintenance and snow removal (except for multi-unit properties). However, while the property is vacant, we provide the service of keeping the yard cut and looking nice (every other week), as well as removing snow and ice (with 2 or more inches of snow fall within 48 hrs). This will keep your property in compliance with city regulations and avoid fines and other unnecessary issues. It will also keep your property looking great and more attractive to prospective tenants. We will also leave a bucket of ice melt at the property in order to reduce your liability as a property owner. We do not service your property if it is maintained on a service contract or by an HOA.
        • Cost per service ranges from $30-50 depending on size. Additional costs for excessive work required.
    • Yard Care and Snow Removal - Multi-Unit
      • With multi-family properties, the owner generally maintains the yard on a regular basis and removes snow as needed.
      • We provide the service of having the yard mowed, trimmed, blowed on a weekly basis, and clean-up of garbage and debris on a monthly basis and as needed. Snow removal is completed as needed when there is snow fall greater than 1.5"-2" to avoid heavy buildup. This will keep your property in compliance with city regulations and avoid fines and other unnecessary issues. It will also keep your property looking great and more attractive to prospective tenants. We will also leave a bucket of ice melt at the property in order to reduce your liability as a property owner.
        • Cost of service depends on the size of the lot and property, and is on a per estimate basis.

Utilities & Service Contracts

We need authority to manage utilities and other ongoing service contracts in order to effectively manage and oversee the properties we manage.  Our clients give us this authority so they don't have to deal with the day to day hassles of it.  Some utility companies and cities still require a signature from the property owner to establish landlord agreements and such though we are authorized through the management agreement to sign on our client's behalf. We are further indemnified and not held liable for any injury, damage to the property, or damage to neighboring property due to the failure of utility service being provided. We are also authorized to manage the utilities and coordinate the billing on behalf of our clients and for the tenants as we deem most appropriate for the situation.

Documentation: 

It is important that our clients provide us with evidence of insurance which we may verify to determine the adequacy of coverage. If necessary, additional changes in insurance coverage may be made upon the approval of our client. Our clients must notify us and provide documentation in the event the mortgage, taxes, and any other liens on the property are delinquent and will in any way affect the management agreement or any lease of the property.  In the event the premises is occupied and/or we did not complete the move-in inspection for a tenant, we are not able to accurately complete a move-out disposition of charges. For this reason, we can't be required to assess charges to the tenant.

Selling the Property

As licensed real estate professionals, we want to be your agent for all things real estate related.  If you decide to buy or sell property, we have great solutions for you. Our agreement with you requires that you utilize our sales services in the event you decide to sell the property tenant occupied.  Simply put, selling a house with a tenant has many challenges and most agents do not experience it enough to understand how to make it successful.  There are many ways we have witnessed over the years that 3rd party real estate agents create a more problems than solutions.  If you do decide to sell through a 3rd party brokerage, we will need to set some expectations with them in order for it to be successful.  Since we will not be a party or agent to the sale, following our introductory conversation with the tenant the 3rd party agent will take over to build rapport, get the tenant's buy-in, and see that the relationship will be positive.  The agent will then work directly with the tenant.  We can help the agent by giving recommendations however, it will be their sole responsibility to create a successful situation. If they do not handle it properly, the tenant could very well sabotage the sales process.  

Due to the sensitive nature of the sales process with a tenant, most of our property owners decide to list through our brokerage rather than a 3rd party brokerage.  We know the property, have exclusive marketing networks, know the tenants and the process well, etc.  If you decide to have the rental vacant prior to listing, we would also love to help at that point. 

Licensing & Compliance: 

Local or municipal ordinances may require certain property owners to license their rental properties and/or provide a current in-state agent to accept legal service on behalf of any such owner. It is the duty of our clients to become familiar with any local or municipal ordinances and the obligations they impose. Our clients are also responsible to ensure that the properties are in compliance with these ordinances and that any associated fees have been paid or licensing requirements have been fulfilled.  We do not assume and are not given responsibility for the property's compliance with the requirements of any statute, ordinance, law or regulation of any governmental body, and public authority, or any official hereof having jurisdiction, or any complaints, warnings, notices or summonses, received by it in relation to those matters.