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Property Management Agreement (1 Dorsey's Forge) - KRF 3 Acquisition Co. LLC and BRI OP LP

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                                         1 Dorsey's Forge
                                                            RESIDENTIAL PROPERTY
                           PROPERTY MANAGEMENT AGREEMENT

 This Agreement is made as of the 1st day of January, 2002 between the undersigned,
KRF 3 Acquisition Company, L.L.C., a Delaware limited liability company, (the "Owner")
and the undersigned BRI OP LIMITED PARTNERSHIP, (the "Agent").
     1. APPOINTMENT AND ACCEPTANCE. The Owner appoints the Agent as exclusive agent
for the management of the property described in Section 2 of this Agreement, and
the Agent accepts the appointment, subject to the terms and conditions set forth
in this Agreement.
     2. DESCRIPTION OF THE PROJECT. The property to be managed by the Agent under
this Agreement (the "Project") is a housing development consisting of the land,
buildings, and other improvements located in Columbia, Maryland and known as Dorsey's
Forge Apartments, containing 251 dwelling units.
     3. BASIC INFORMATION. The Agent will thoroughly familiarize itself with the
character, location, construction, layout, plan and operation of the Project, and
especially the electrical, plumbing, air-conditioning and ventilating systems, the
elevators and all other mechanical equipment.
     4. MARKETING. The Agent will carry out the marketing activities designed to
attract tenants as described below.
     5. RENTALS. The Agent will offer for rent and will rent the dwelling units
and commercial space, if any, in the Project. Incident thereto, the following provisions
will apply:
     a. The Agent will show the Project to prospective tenants;
     b. The Agent will take and process applications for rentals. If an
        application is rejected, the applicant will be told the reason for
        rejection, and will be given the rejected application, with reason for
        rejection noted. A current list of prospective tenants will be
     c. The Agent will prepare all dwelling leases and, unless otherwise directed
        by the Owner, will execute the same in its name, identifying itself
        thereon as agent for the Owner. Dwelling leases will be in a form
        approved by the Owner;
     d. The Owner will furnish the Agent with rent schedules, showing contract
        rents for dwelling units, and other charges for facilities and services.
        The Agent will periodically review such rent schedules and make
        recommendations to the Owner with respect to changes thereto;


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     e. The Agent will collect, deposit, and disburse security deposits, if
        required, in accordance with the terms of each tenant's lease;
     f. The Agent will negotiate and prepare commercial leases and concession
        agreements, if the Project shall now or hereafter contain any commercial
        space, and will execute the same in its name, identified thereon as agent
        for the Owner, subject to the Owner's prior approval of all terms and
        conditions; and
     g. The Agent will perform periodic market surveys with respect to the market
        area in which the Project is located.
     6. COLLECTION OF RENTS AND OTHER RECEIPTS. The Agent will collect, when due,
all rents, charges and other amounts receivable for the Owner's account in connection
with the management and operation of the Project. Such receipts will be deposited
in an account, separate from all other accounts and funds, with a bank whose deposits
are insured by the Federal Deposit Insurance Corporation. This account will be carried
in the Owner's name and designated of record as KRF 3 Acquisition Company, L.L.C.
d/b/a "Dorsey's Forge Apartments" (the "Project Rental Account"). Subject to compliance
with Section 11 hereof, the Agent is, however, hereby authorized to make deposits
to and withdrawals from the Project Rental Account as agent for the Owner.
     7. ENFORCEMENT OF LEASES. The Agent will secure full compliance by each tenant
with the terms of such tenant's lease. Voluntary compliance will be emphasized,
but the Agent may lawfully terminate any tenancy when, in the Agent's judgment,
sufficient cause (including but not limited to non-payment of rent) for such termination
occurs under the terms of the tenant's lease. For this purpose, the Agent is authorized
to consult with legal counsel, to be designated by the Owner, to bring actions for
eviction against such tenants; provided, however, the Agent shall keep the Owner
informed of such actions and shall follow such instructions as the Owner may prescribe
for the conduct of any such action. Subject to the Owner's approval, attorney fees
and other necessary costs incurred in connection with such actions will be paid
out of the Project Rental Account as Project expenses.
     8. MAINTENANCE AND REPAIR. The Agent will maintain the Project in good repair
and in compliance with local codes, and in a condition at all times acceptable to
the Owner, including, but not limited to, cleaning, painting, decorating, plumbing,
carpentry, grounds care, and such other maintenance, repair, remodeling and refurbishing
work as may be necessary, subject to any limitations imposed by the Owner in addition
to those contained herein. The Agent will also assist the Owner in identifying and
implementing capital improvements to the Project.
     The Agent will perform such periodic physical inspections as shall be appropriate
in connection therewith. Incident thereto, the following additional provisions will


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     a. Special attention will be given to preventive maintenance, and, to the
        extent feasible, the services of regular maintenance employees will be
     b. Subject to the Owner's prior approval, the Agent will negotiate, review
        and sign, on behalf of the Owner, contracts with qualified independent
        contractors for the maintenance and repair of heating and
        air-conditioning systems and elevators, and for extraordinary repairs to
        such items and other assets of the Project, which are beyond the
        capability of regular maintenance employees;
     c. The Agent will systematically and promptly receive and investigate all
        service requests from tenants, take such action thereon as may be
        justified, and will keep records of the same. Emergency requests will be
        received and serviced on a twenty-four (24) hour basis. Complaints of a
        serious nature will be reported to the Owner after investigation;
     d. The Agent is authorized to purchase all materials, equipment, tools,
        appliances, supplies and services necessary to the proper maintenance
        and repair of the Project; and
     e. Notwithstanding any of the foregoing provisions, the prior approval of
        the Owner will be required for any expenditure which exceeds Five
        Thousand Dollars ($5,000) in any one instance for labor, materials or
        otherwise, in connection with the maintenance and repair of the Project,
        except for recurring expenses within the limits of the operating budget
        and emergency repairs involving manifest danger to persons or property or
        required to avoid suspension of any necessary service to the Project. In
        the latter event, the Agent will inform the Owner of the facts as
        promptly as possible.
     9. UTILITIES AND SERVICES. In accordance with the operating budget, the Agent
will make arrangements for water, electricity, gas, sewage and trash disposal, vermin
extermination, decorating, laundry facilities, and telephone service. Subject to
the Owner's prior approval, the Agent will make such contracts as may be necessary
to secure such utilities and services.
     10. NONCUSTOMARY SERVICES. Notwithstanding any contrary provision in this Agreement,
the Owner shall cause any services, in connection with the rental of the Project,
that are not customarily furnished to tenants of comparable buildings in the region
(including, but not limited to, the provision of maid service and the furnishing
of parking facilities, other than on a complimentary, unreserved basis), to be performed
by an entity qualifying as an independent contractor.
     11. EMPLOYEES. Except as otherwise agreed, all on-site personnel will be employees
of the Owner, for purposes of their compensation, and not the Agent, but will be
hired, paid,


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 supervised, and discharged through the Agent, in the Agent's sole discretion, subject
to the following conditions:
     a. The resident manager will have duties of the type usually associated with
        this position;
     b. Compensation (including fringe benefits) of bookkeeping, clerical, and
        other managerial personnel will be within the Agent's sole discretion,
        provided minimum wage standards are met;
     c. The Owner will reimburse the Agent for the compensation (including fringe
        benefits) payable to the on-site management and maintenance employees,
        and for all local, state and federal taxes and assessments (including,
        but not limited to, Social Security taxes, unemployment insurance, and
        Workman's Compensation insurance) incident to the employment of such
        personnel. Such reimbursements will be paid out of the Project Rental
        Account and will be treated as Project expenses; and
     d. Compensation (including fringe benefits) payable to the on-site staff,
        and all bookkeeping, clerical and other managerial personnel, plus all
        local, state and federal taxes and assessments incident to the employment
        of such personnel will be borne solely by the Project, and will not be
        paid out of the Agent's management fee. The rental value of any dwelling
        unit furnished rent-free to on-site personnel will be treated as a cost
        of the Project.
     a. From the funds collected and deposited by the Agent in the Project Rental
        Account, either the Owner or the Agent, as shall be determined from time
        to time by the Owner, will make the following disbursements, when
        (1)  Reimbursement to the Agent for compensation payable to the employees
             specified in Section 11 above, and for the taxes and assessments
             payable to local, state and federal governmental agencies;
        (2)  All sums otherwise due and payable by the Owner as expenses of the
             Project, including compensation payable to the Agent for its
             services hereunder and expenses of the Project incurred by the Agent
             under the terms of this Agreement;
        (3)  Any payment required to be made monthly by the Owner to any
             mortgagee of the Project, including the amounts due under the
             mortgage for principal amortization, interest, ground rents, taxes
             and assessments, and fire and other hazard insurance premiums;


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     b. Except for the disbursements mentioned above, funds will be disbursed or
        transferred from the Project Rental Account only as the Owner may from
        time to time direct; and
     c. In the event the balance in the Project Rental Account is at any time
        insufficient to pay disbursements due and payable under Section 12(a)
        above, the Agent will inform the Owner of that fact and Owner shall
        immediately deposit sufficient funds. In no event will the Agent be
        required to use its own funds to pay such disbursements.
    13. RECORDS AND REPORTS. The Agent will have the following responsibilities
with respect to records and reports:
     a. The Agent will establish and maintain a comprehensive system of records,
        books and accounts in a manner satisfactory to the Owner;
     b. With respect to each fiscal year ending during the term of this
        Agreement, the Agent will furnish an annual financial report. The Agent
        will also prepare and review budgets and cash flow projections for the
        Project in such manner and at such times as may be agreed with the Owner;
     c. The Agent will furnish such information (including occupancy reports) as
        may be reasonably requested by the Owner from time to time with respect
        to the financial, physical, or operating condition of the Project; and
     d. By the twenty-fifth (25th) day of each month, the Agent will furnish the
        Owner with a statement of receipts and disbursements during the previous
        month, a schedule of accounts receivable and payable, as of the end of
        the previous month and reconciled bank statements for the Project Rental
        Account, as of the end of the previous month.
     14. ON-SITE MANAGEMENT FACILITIES. Subject to the further agreement of the
Owner and the Agent as to more specific terms, the Agent will maintain a management
office within the Project, for the convenience of the Owner, for the sole purpose
of the Agent's performing its duties under this Agreement, and the Owner will make
no rental charge for such office.
     15. INSURANCE. The Owner will inform the Agent of insurance to be carried with
respect to the Project and its operations, and the Agent, when authorized by the
Owner, will cause such insurance to be placed and kept in effect at all times. The
Agent will pay premiums out of the Project Rental Account, as an expense of the
Project. All insurance will


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 be placed with such companies, on such conditions, in such amounts, and with such
beneficial interests appearing thereon as shall be acceptable to the Owner and shall
be otherwise in conformity with any mortgage relating to the Project, provided that
the same will include public liability coverage, with the Agent designated as one
of the insured, in amounts acceptable to the Owner, Agent and any mortgagee of the
Project. The Agent will investigate and furnish the Owner with full reports as to
all accidents, claims, and potential claims for damage relating to the Project and
will cooperate with the Owner's insurers in connection therewith.
     16. AGENT'S COMPENSATION. The Agent will be compensated for its service under
this Agreement by monthly fees to be paid out of the Project Rental Account to be
treated as Project expenses. Such fees will be payable monthly. Each such monthly
fee will be in an amount equal to five percent (5%) of the gross receipts (including
rentals and other operating income of the Project) actually received during the
preceding month.
     17. INDEMNIFICATION BY THE OWNER. The Owner shall indemnify and hold harmless
the Agent from all liability, claims, damages or loss arising out of the performance
of its duties hereunder, and related expenses, including reasonable attorneys' fees,
to the extent such liability, claims, damages or losses and related expenses are
not fully reimbursed by insurance; provided, however, that the Agent shall be entitled
to indemnification, under this Section 17, only if the Agent, in connection with
any liability, damages, claim or loss for which it seeks indemnity, acted in a manner
which would not constitute gross negligence or willful misfeasance.
     18. INDEMNIFICATION BY THE AGENT. The Agent shall indemnify and hold harmless
the Owner from contract or other liability, claims, damages, losses and related
expenses, including attorneys' fees, to the extent that such liability, claims,
damages, losses and related expenses are not fully reimbursed by insurance and are
incurred by the Owner by reason of the Agent's deliberate dishonesty or gross negligence.
     19. RIGHT TO ASSIGN. The Agent may assign some or all of its rights or obligations
under this Agreement, provided that the Agent remains principally responsible hereunder,
and the Owner is given notice of such assignment. The Owner may assign its rights
and obligations under this Agreement to any successor in title to the Property,
and upon any such assignment, the Owner shall be relived of all liability accruing
after the effective date of such assignment.
     20. TERM OF AGREEMENT. This agreement shall be in effect for a period commencing
on the date hereof. This agreement may be terminated, without penalty, by written
notice of either party to the other as of the end of any calendar month, provided
at least thirty (30) days advance notice thereof is given.
     IN WITNESS WHEREOF, the parties hereto (by their duly authorized representatives)


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 have executed this Agreement as of the date first above written.


                                              By: Berkshire Apartments, L.L.C.,
                                                  its general partner

 By: /s/ David C. Quade
    ---------------------------- Its: Executive Vice President
                                              By: /s/ Kenneth J. Richard
                                              Its: Senior Vice President