Service fees in case of termination of PM services
Either party may initiate the termination of our property management services at any time. In such case, service fees due for rental contracts that were already successfully closed, will still be payable to PPE Inc.
This is because our service fees are contingent only on the successful closing of revenue-generating rental contracts for the owner. We only collect fees when we are able to generate revenue from a property. The services that are compensated here are those that went towards the closing of such contracts.
The maintenance, facilitations and other services that are included in our PM services are not dependent on whether or not we get to collect fees. These are only complimentary and value-added services that we provide while a property is under our care. We provide these services even during periods of vacancy when we don’t have service fees due for collection.
So if our property management contract should be ended, the collection of our service fees will likewise not be conditioned upon the delivery of these complimentary services.
What about the possible expenses when an existing tenant moves out and you’re not there to facilitate anymore?
A standard provision in our lease contracts requires that tenants should return the rented property in a condition similar to when they received it from us, save only for reasonable wear and tear.
This means that if a tenant only complies with the terms of their lease, there are no expenses to be expected. If they don’t, and expenses should be necessary, their security deposit can, and should be used to cover those expenses. This includes the costs of your time if you have to use your own or your representative’s time to attend to the outgoing tenant’s non-compliances.