Do you use a professional property manager? Do you know if that manager has any special arrangements with the vendors they use for maintenance? It’s a question you really ought to ask. Here’s why.
Many property managers have found what, for them, appears to be a diamond in the rough. Due to the economies of scale enjoyed by working with a professional property manager, many vendors are willing to discount their services by as much as 20%, in some cases. But rather than return this benefit to the property owner, the property manager makes arrangements with the vendor to pay them, rather than pass it along to the property owner.
According to statute, all rebates earned by real estate brokers either directly or indirectly from real estate services are required to be disclosed to the property owner. In many cases this is done, but despite the law, in others it is not. In some cases where the disclosure is made, it is obscured by small mice type, or hidden is some seemingly irrelevant exhibit to the property management agreement. In cases where the disclosure is not made, the property manager has come up with a clever scheme to have the rebate paid to a wholly owned subsidiary or apparently unaffiliated business entity that would demand a formal investigation to reveal the connection to the management company. At worst there is good reason to question the legality of this scheme, and at best it is unethical. It is regrettable that a professional property manager would do this, but it does happen from time-to-time. If your maintenance costs seem to be on the high side of price, perhaps you should ask for an explanation.
Daniel R. Wilhelm
Residential Management Professional
3 Options Realty
www.3optionsrealty.com
options3@3optionsrealty.com
678-397-1282