2. TERM
A. Commencement Date: Upon Completion of this Agreement by all parties.

B. Initial Term: 12 Months from Date of Commencement of this Agreement.

C. Automatic Renewal: This agreement will automatically renew for a month-to-month period following the anniversary date.

D. Cancellation Notice: Either party may cancel this agreement on the anniversary of the commencement with a 30-day written notice.

E. Change of Terms: Any effective changes to this agreement after the initial term must be in writing and be presented to the other party at a minimum of 30 days in advance.

F. Termination: If Owner violates any terms of service contained in this agreement or Manager determines that effective management services can no longer be provided, Manager may terminate this agreement immediately without notice.

3. LEASING AUTHORITY OF MANAGER
Owner grants to Manager the following authority which Manager may exercise on behalf of Owner’s Best interest.

A. Advertise the Property for lease using methods Manager determines to be most effective.
B. Place a “For Rent” sign on property in accordance with local rules and regulations.
C. Place a lockbox on the home to allow Realtors® and pre-screened applicants with access for showings as deemed appropriate by Manager.
D. Authorize other Manager, their associates, inspectors, appraisers, and contractors to access the property at reasonable times and to disclose security and lock box codes as required or needed to facilitate access to the home under Manager discretion.
E. Duplicate keys and security devise as needed to access the property for showings and repairs in a timely manner.
F. Negotiate and execute leases on Owner’s behalf at market rates for not less than 6 months and no more than 36 months.
G. Negotiate and execute any amendments, extensions, or renewals to any lease for the property on Owner’s behalf and Terminate leases for the property, negotiate lease terminations, and serve notices of termination.

4. FINANCIAL AUTHORITY OF MANAGER
A. Collect and deposit Owner rents, security deposits, and other funds related to the property in a trust account and pay any compensation and reimbursements due Manager under this agreement and any other persons this agreement may authorize to compensate.
B. Collect all administrative charges without accounting to Owner any additional tenant fees, administration fees, processing fees, animal prescreening fees, application fees or any other tenant related charges associated with management.
C. Enforce actions to, at Owner’s expense, evict tenants in the property, recover possession of the property, recover lost rent with damages, and defend against legal action with attorney’s fees.
D. Negotiate and make reasonable concessions to tenants on a case by case basis.
E. Obtain information from any holder of a note secured by a lien on the property and any insurance company insuring all or part of the property.
F. Manager is allowed to bring current any delinquent or outstanding Association Dues and fees to avoid fines or other legal action on behalf of Owner.

5. MANAGER MAINTENANCE AUTHORITY
A. Routine Repairs: Hire contractors to repair, maintain, improve, or alter the property provided Manager does not expend more than $500.00 for any single repair, maintenance item, or alteration without Owner’s prior approval.
B. HVAC – Plumbing – Electrical: During repairs for HVAC, Plumbing, or Electrical work regarding the safety and health of safety of a Tenant, Manager may expend no more than $500.00 for any single repair, maintenance item, or alteration without Owner’s prior approval.
C. Manager may hire contractors to make emergency repairs to the property without regard to the expense limitations that Manager determines are necessary to protect the property or the health or safety of an ordinary tenant. In these situations, the Property Manager may conduct repairs without owner permission if owner is nonresponsive.
D. Manager may contract, at Owner’s expense, in either Manager’s or Owner’s name, for utilities and maintenance to the property during times that the property is vacant, including but not limited to electricity, gas, water, alarm monitoring, cleaning, pool and spa maintenance, yard maintenance, and other regularly recurring expenses that Manager determines are reasonable to maintain and care for the property.

6. MANAGER AUTHORITY – AGREEMENTS
A. This agreement is subject to policy and procedures changes updated periodically into the Owner Handbook.
B. Manager reserves the right to amend or supplement the terms and conditions contained in this Agreement or the Owner Handbook by providing written notice to Owner via email.
C. In the event or sale of the Management Company, this agreement may be assigned without the written permission from the Owner.

7. RECORD KEEPING
A. Manager will file reports with the Internal Revenue Service related to funds received on behalf of the Owner under this agreement. Owner authorizes delivery of 1099 via electronic methods.
B. Manager will remit each month to the Owner funds collected by Manager for Owner under this agreement, less authorized deduction, and a statement of receipts, disbursements, and charges. Owner may instruct Manager to remit the items to another person or address.
C. Overdrawn Owner accounts reaching past 30 days will incur a surcharge for payment by Owner. The charge will equal 10% of the total overdrawn amount with a minimum charge of $39 per month.

8. SECURITY DEPOSITS
A. During this agreement, Manager will maintain security deposits received from tenants in a trust account and will account to tenants for the security deposits in accordance with the lease agreement and state law.
B. If property is onboarded with pre-placed tenants, Owner will provide funds for the Security Deposit amount held according to the tenants’ lease. If owner does not fund the security deposit within 30 days of the execution of this agreement, Manager will hold and apply rent income to the security deposit amount until fulfilled.

9. RESERVES
Upon execution of this agreement, or at time of execution of a new lease, Owner will allow Manager to hold in a trust account a reserve. These reserve funds will be used to pay any expense related to the leasing and management of the property. If the balance of the reserve becomes less than the amount stated, Manager may deduct the applicable amount from the monthly income to bring the balance to the amount requested. The standard reserve is $250 per unit. This fee can increase if due diligence cannot be completed and/or if Manager is concerned about property condition and safety.

10. E-PAYMENT POLICIES
Owner draws will be batch processed and sent out via ACH on or about the 15th of each month. All Owner payments are made ACH and will be sent directly to the Owner’s checking or savings account from the bank ACH information provided by the owner.

11. SET UP FEE
Upon completion of this agreement, a standard $99 Set up Fee will be charged to the Owner. This fee can increase depending upon the property setup, number of doors, and availability of documents for occupied units. This fee accounts for the set-up of all bank accounts, multiple software systems, resident introduction packets, organizing with any existing tenants, outgoing tenants, co-operating with Realtors®, and/or Owner’s point of contact to gain access to the home to integrate the home into Manager’s care.

12. ANNUAL TAX PREPARATION FEE

There is a $40 Annual Tax Preparation and Technology Fee to cover the costs of administration fees associated with all technology features to include electronic delivery of the required IRS Form 1099 each year is included at no additional cost. This fee is per owner and shall not be paid twice by any one company.

13. MISCELLANEOUS FEES
A. There is a $75 Property Visitation Fee if an LREI representative needs to meet someone at the property outside of our scope of management.
B. There is a $75 Collections Filling Fee if you choose to pursue the Collections Process for a previous tenant with an outstanding balance.
C. There is a $75 Court Appearance Fee if an LREI representative is required to appear in court on behalf of the owner.

14. OWNER REPRESENTATIONS
Owner represents and attest to all the following:
A. Owner has fee simple title to and the legal capacity to lease the property.
B. Owner is not bound by another agreement with another Broker or Manager for the leasing, management, or sale of this property that will affect the timing of this agreement. Should Owner enter into an agreement with another Manager, this agreement can be terminated without notice subject to all cancellation fees.
C. No person or entity has any current rights to purchase, lease, or acquire the property by an option, right of first refusal, or any other agreement.
D. Owner is not delinquent in the payment of any property taxes, Association fees, property hazard insurance, or mortgage payments.
E. Owner is in compliance with all local rental requirements to include licensing, fees, association permissions, or local taxes.

15. PROPERTY CONDITION
A. Owner and Manager are obligated under law to disclose to a tenant or to a prospective tenant any known condition that materially and adversely affects the health or safety of an ordinary tenant. Owner may be obligated under the Property Code to repair such condition for a tenant. Owner represents that:
I. Any pool or spa has the required enclosures, fences, gates and latches in place to comply with all laws and ordinances; and
II. Owner is not aware of any condition existing on the property that would materially affect the health or safety of an ordinary tenant.
B. Utilities: Utilities may be removed out of the Owner’s name starting the first day of the executed Property Management Agreement. Manager may place utilities in Management’s name on Owner’s behalf.

16. OWNER AGREES TO:
A. Cooperate with Manager to facilitate showing, marketing, and lease of the property.
B. Not rent or lease the property to anyone without Manager’s written approval.
C. Not negotiate with any prospective tenant who might contact Owner directly but refer all prospective tenants to Manager.
D. Not deal with or negotiate with any tenant in the property concerning any matter related to the management or leasing of the property.
E. Provide Manager with any existing copies of lease agreement related to the property, keys, remotes, or any warranties.
F. Tender to Manager any security deposits paid by existing tenants.
G. Notify Manager if Owner becomes delinquent in the payment of any mortgage secured by the property, property taxes, property insurance, or association fees.
H. Make a contribution before work is scheduled (if property reserve is not sufficient to cover cost) to improve the condition of the unit in between vacancies, or before any major work is performed to bring any known condition that materially and adversely affects the health or safety of an ordinary tenant back to standards.
17. OWNER’S INSURANCE AND SURCHARGE
A. At all times during this agreement, while this home is under management, Owner must maintain in effect a public liability Insurance policy (Home Owner’s Insurance) that covers losses to the property. This will include an amount equal to the reasonable replacement cost of the property’s improvements and containing endorsements showing the insuring party is aware that the home will be leased to prospective tenants. It is required that the Owner name LREI Property Management LLC as “Additionally Insured” on their Owner’s Insurance Policy. Being listed as “Additionally interested” is not the same.
B. This agreement will also serve as Owner’s authorization to obtain and discuss any claim regarding this home with the Owner’s Insurance company.
C. All Owners incur a $10.00 (ten) per month Administration Surcharge to cover the cost of administrative fees associated with homeowner’s insurance policy compliance and tracking.
D. Owners may OPT OUT of this $10.00 (ten) per month Surcharge by providing Manager a letter of notice delivered via mail, email, or fax that indicates LREI Property Management LLC – as named “Additionally Insured” on their Home Owner’s Insurance Policy no later than 15 days from the completion date of this agreement.

18. MANAGEMENT FEES
Management Fees: LREI Property Management LLC will charge the management fees monthly according to the formula of 10% of charged rents with a $50 minimum collected per owner for which the Agent manages 1 to 9 units, 9% for 10 to 19 units, 8% for 20 to 49 units, or 7% for owners having 50 or more units managed by the Agent. Management Fee charges begin once the home has been turned over to Manager.
Minimum Fee = $50 per month
Leasing Commission: LREI Property Management LLC charges the equivalent of ONE HALF MONTH’S RENT (50% of One Month’s Rent) for marketing and leasing a home for each new tenancy.
Minimum Fee Per Leasing Occurrence = $450
Renewals or Extensions: Each time a tenant renews or extends their lease agreement, LREI Property Management LLC will charge a Renewal Commission of $150. This charge will be paid the following month after the extended lease agreement has been executed.
Timing of Fees: LREI Property Management LLC will charge the management fees on the month after the management has occurred and before Owner payout.
Interest on Trust Accounts: LREI Property Management LLC retains any and all income resulting from an interest bearing account.
Administrative Fees: LREI Property Management LLC will retain any and all administrative fees to include late fees, non-sufficient fund fees, returned checks, appointment no-show fees, or any other assessed tenant fees.
Owner Exit Fee: Upon completion or termination of this agreement, owners will incur a $100 charge for turning over all documentation, accounting for all funds, archiving all files, and forwarding any information required to the owners and/or the tenants. All files and accounting are required to be archived for seven years.

19. EARLY TERMINATION OF AGREEMENT
A. Prior to Lease Execution: Owners may request an early termination to this agreement prior to a tenant renting their home, or while their home is being marketed. There is a one-time early termination charge of $300. Owner will reimburse Manager for any refunded applications, or unpaid fees caused from this early termination.
B. After Lease Execution: Owner may cancel management services during this agreement with a 30-day written notice. Manager reserves right to nullify executed custom lease agreements by sending Owner and Tenant Notice of Agreement Cancellation.
I. Cancellation Fee during the first twelve months = $600

20. ASSISTED HOUSING PAYMENTS
A. HUD Housing Payments – Management requires payments to be made to Management on the Owner’s behalf. Management requires payment in order to properly control Tenant ledgers and communication with the program.

21. REPAIRS
A. Manager will charge owner $65 per hour plus material costs for labor and maintenance handled by in-house maintenance staff. All subcontracted labor Vendors will be paid at face value for their invoices.
B. Make Ready Turns are bid by the job. The scope of work will be presented to the owner and require approval and funding prior to the start of work.
I. Manager will charge owner a $150 turn estimate fee when a Make Ready Turn bid is created. If owner approves full estimate that fee will be waived. The owner has the opportunity to decline this service if Manager is notified prior to the tenant vacating.
C. Owner should consider this notice that on occasion without accounting to Owner, Manager may receiving incentives, reimbursement, referral fees, or cash payments from business associates including cable companies, internet service providers, contractors, and vendors to refer or participate in joint business arrangements relating to repairs, inspections, improvements, maintenance, referrals, or group marketing efforts.

22. LIABILITY AND INDEMNIFICATION
A. Manager is not responsible or liable in any manner for personal injury to any person or for loss or damage to any person’s real or personal property resulting from any act or omission not caused by Manager’s negligence, including but not limited to injuries or damages caused by: Other non-LREI Property Management, LLC Managers, their associates, inspectors, appraisers, and contractors who are authorized to access the property on behalf of the Owner; Acts of third parties (vandalism, theft, or other criminal acts); Freezing or leaking water pipes; A dangerous condition or environmental condition of the property; Hurricanes or Flooding; Or the property’s non-compliance with any law or ordinance
B. Manager is not responsible or liable in any manner for any late fees or other charges Owner incurs to any creditor caused by late or insufficient payments by any tenant in the property damages to Owner caused by a tenant’s breach of lease.
C. Owner agrees to protect, defend, indemnify, and hold Manager harmless for any damage, costs, attorney’s fees, and expenses that: (1) Are caused by Owner, negligently or otherwise; (2) Arise from Owner’s failure to disclose material or relevant information about the property; (3) Are caused by Owner giving incorrect information to any person; (4) related to the management of the property and are not caused by Manager, negligently or otherwise.
D. Owner is responsible for and liable for all contracts and obligations related to the property for maintenance, service, repairs, and utility arrangements made before or during this agreement. Owner agrees to hold Manager harmless from all claims related to such contracts.
E. Property Codes & State Laws: State law may require certain types of locks or security devices on all exterior doors of residential rental properties and requires smoke detectors in certain locations including all bedrooms. These guidelines may require the security devices to be rekeyed, peep holes on exterior doors, an interior only locking mechanism, and the smoke detectors to be tested each time a new tenant occupies the property.
F. Indemnity provision. If any third party asserts any claim against broker for any cause of action related to the lease agreement or this agreement, owner will indemnify broker from any and all claims, including attorney fees incurred in defense of any claim subject to indemnity that are or may be asserted against broker and that relate to owner’s obligations under: (1) the lease and/or (2) this instrument; or that arise from (3) owner’s negligence; (4) owner’s failure to disclose material or relevant information regarding the property; (5) accounting and return of tenant’s security deposit.

23. MISCELLANEOUS PROVISIONS
A. OWNER, and MANAGER expressly submit to the jurisdiction of the State of KY and agree that venue in any litigation touching or concerning this agreement shall be proper ONLY in Jefferson County, KY.

24. FORECLOSURE NOTICES
A. If Manager receives notice of the Owner’s delinquency in the payment of any mortgage or encumbrance secured by the property, property taxes, property insurance or Home Owner’s Association fees, Manager may give 15 days to cure the delinquency during which period Owner authorizes Manager to freeze any funds held by Manager and no disbursements will be made to Owner related to this agreement or the Property. If after the 15-day period, the delinquency is not cured, and the foreclosure process is initiated, Owner authorizes Manager to deduct from any other funds being held by Manager for Owner any remaining Manager fees or funds due to Manger related to services performed under this agreement.
B. Owner authorizes Manager to return any security deposit being held by Manager to a tenant of the Property in addition to any prorated amount of rent being held by Manager and Manager may terminate this agreement without notice. This paragraph does not preclude Manager from seeking any other remedies under this agreement or at law that may be available to Manager.

25. PERIODIC HOME ASSESSMENTS
A. It is the policy of LREI Property Management LLC to conduct a Home Condition Assessment prior to a lease renewal being fully executed. Owners may elect to have additional Home Condition Assessments. A copy of this assessment will be sent to the owner. In the event of a renewal fee will be excluded and service is included in the renewal fee.
B. As a cost-effective method for ensuring the home is reviewed a Home Condition Assessment is conducted with only a visual inspection. During this Home Condition Assessment as described above, no mechanical, plumbing, electrical, HVAC, or other is manually inspected that requires a specialty trade license.
I. $85.00 per each additional Home Condition Assessment Requested

26. INITIAL HOME INSPECTIONS
A. At the beginning of this agreement, and once the home is surrendered to the Manager, an Initial Home Inspection will be conducted at a cost to the Owner of $85.00 for each property that does not already have a Move-In Inspection Report. This is in addition to an account setup fee.

27. NECESSARY MAINTENANCE
A. During an initial or annual Home Condition Inspection, it may become necessary to perform required maintenance to a home. It is the policy of the Manager to ensure full compliance with state law.

28. POOL MAINTENANCE
A. Owner agrees to provide an ongoing Pool Maintenance Service Contract with Manager. All billing and service arrangements may be made through Manager.

29. FEDERAL FAIR HOUSING NOTICE
A. in accordance with the Federal Fair Housing laws, the National Association of Residential Property Managers (NARPM), and the National Association of Realtors Code of Ethics, Manager’s services must be provided and the property must be shown and made available to all persons without regard to race, color, religion, national origin, sex, disability, familial status, sexual orientation, or gender identity.