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Property Management Agreement (Hannibal Grove) - KRF 3 Acquisition Co. LLC and BRI OP LP

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 Hannibal Grove                          1

                                                             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 Hannibal Grove Apartments, containing 316 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 maintained;
          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 "Hannibal Grove 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
          a.       Special attention will be given to preventive maintenance,
                   and, to the extent feasible, the services of regular
                   maintenance employees will be used;


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          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
          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 payable:
                   (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


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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
          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.


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          IN WITNESS WHEREOF, the parties hereto (by their duly authorized representatives)
have executed this Agreement as of the date first above written.

 OWNER:                                      AGENT:

                                             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