Rebuilt our management agreement and lease package with counsel. It ended a fee dispute at $0 instead of arbitration
We manage 340 units across nine owners. Our management agreement was a form the previous owner of the company bought in 2016 and had never touched. Our lease was a state association form with four addenda stapled on by whoever was working that year.
Spent $7,200 with a firm that does landlord-tenant and management work in our state. Two pieces. First, the management agreement, where the real work was the fee section, the maintenance authorization limit, the termination provision, and what happens to leases we signed when an owner sells. Second, the lease package, where the attorney pulled two addenda entirely because they conflicted with statute here, and rewrote the fee and notice language. What is enforceable in a residential lease varies a lot by state, so none of the specific language transfers, and every operator needs their own state's counsel on it.
The test came from an owner with 46 units who decided our maintenance markup was undisclosed and demanded $31k back plus the right to terminate without the 60 day notice. Old agreement, I think that's an arbitration I half lose, and the fee alone would have been $15k to $20k on our side.
New agreement had the markup stated as a percentage with a dollar ceiling per work order, and an acknowledgment paragraph the owner had initialed. Our attorney sent one four page letter with the initialed page and the work order history. The owner dropped it in three weeks and is still with us. Total legal cost on the dispute was $1,850.
The part that nearly broke it was that we had signed the new agreement with only six of nine owners before this came up. He was one of the six by about five weeks. The other three took four months of nagging, and if he'd been in that group I'd be writing a different post.
What I'd keep is the initialed disclosure page. Doing the renewals in a batch with a deadline is the thing I'd do differently.