It is hereby agreed as follows.

The Owner hereby agrees to enter into a service agreement with Race Real Estate Inc (the Manager) subject to the terms and conditions as set forth hereafter in respect to the Property(s) listed in the attached Schedule, hereinafter referred to in this agreement as the “Property”.   The Owner understands that this is a Customer agreement and not a Client relationship. 

SERVICE OPTIONS

The Owner must choose one Option at a time and cannot change the Fee Option during the time one tenant or tenant group is the occupant.  The Fee Option can be changed between occupancies, that is when one tenant moves out and before a completely new tenant is even sought out.

A) Full Service: (Default option) The greater of $150 or Ten Percent (10%) of Gross Monthly Rent Received plus GST.  No Rent = No Monthly Fee.  The charges for Full Service is in relation to leasing. The payment for the acquistion of the tenant occurs over the duration of the tenants occupancy (not merely the lease). 

B) OR Self-Management Assistance Services: $100/mth ($75/mth for basements, must come with upstairs) This is for owners who already have or acquire their own tenants. For $100/mth plus GST (min 12 months or $1000/$750 one time payment for a year 17% off) you get access to our A La Carte services, 24/7 emergency call centre with maintenance policies and group rates for maintenance calls.

C) OR Volume Discount or Fixed or Temporary rates: to be negotiated separately in writing.  Agreement by email is accepted.

D) Premium Service: The greater of $300/mth or Twenty Percent (20%) includes everything in Full Service plus after-hours contact by management, custom advertising and full monthly reporting instead of annual.

OTHER FEES:  Any non-management related tasks the Brokerage agrees to perform will be at an hourly rate of $100/hr.   For example, if our own staff physically pick up and deliver new furniture or if the owner needs specific mail picked up from the rental house and then brought to the post office to be forwarded.  Another example is if the condo corp does not keep a key on file and request us to provide entry.  We work to avoid charging this fee, it is only when the client needs something, requests it, and we have to go out of the way to accomplish it that this may be charged.  The client would be informed prior.

One time new tenant fee: $435, charged AFTER a tenant has signed and paid and deducted from the first month rent. NO fee on lease renewals

Urgent Invoices: The manager must pay certain contractors at the time of service. Primarily small and/or urgent plumbing and appliance repair.  For invoices the manager must pay in advance of the owner recieving the invoice there is a 10% markup.  Typically these are under $500 total.  We do this to acquire and retain reliable and quickly available service from preferred contractors.  Basically they want our card on file to payment pay before they even look at the job.  If the invoice can be deducted off the rent within the next 30 days there will be no markup.  If the invoice goes beyond 30 days due to vacancy or the owner does not pay it themselves there is a 10% markup plus an additional $50/mth per invoice.

If the owner has a preferred contractor they can provide their contact but the owner must pre-arrange payment options with the contractor for after-hours and emergency service.

If the task can be time shared with our existing tasks it shall be a flat rate of $75.  For example, installing furnace filters at inspections.  You can request to have this completed on a quarterly basis.

MAINTENANCE CALL-OUTS: IF and only if a call-out for maintence is required such as appliance repair, furnace or plumbing issues, the Owner agrees to pay for the contractor call-out charge plus 1 hour of billing without additional contact for permission.  The Owner will still be notified as soon as possible when a work order request is made by the tenant.  The Owner agrees to provide a credit card on file OR allow auto-debit for this.  With the exception of emergencies, repairs which reduce additional costs or damages, and attempts to repair appliances we will ask the Owner for permission before proceeding with most of the activities AFTER the initial call out.  This is depending on the Owners availability to respond, the urgency of the decision and the severity of the situation.

The Manager will pursue obtaining a receipt from contractors but the Manager will not be held responsible if the contractor does not provide a receipt. The Manager and/or tenant may provide verbal, written, or photo evidence of any work completed.

We do not advertise this but discretionary spending is allowed by the tenant without receipt up to $100. It may be considered excessive or invalid spending if evidence of problems and repairs are not also provided beyond the first occurrence. The first occurrence may be considered forgivable up to about $250. Managers discretion will be accepted based on their opinion on the tenant behaviour, communication and/or knowledge of the issue.

All water issues shall be considered emergencies for the purpose of billing communication since they can quickly create larger long terms costs through water damage and/or mold. 

PROPERTY means the building or unit within a building situated upon the lands described in the address listed above.  The Owner acknowledges that they are the legal owner of the Property.

TRUST: The owner agrees to use of an account called a Trust for the Manager to collect rent and Security Deposits.  As for the Security Deposit the Residential Tenancy Act requires that the Manager be the one who holds the Security Deposit.  Also, the interest earned in a Trust account is typically less than the cost of administering the account and thus not a profitable task. The owner agrees the Manager may pay bills on behalf of the owner via the Rent Trust including the Managers own fees.  All interest earned on funds held in Trust will be to the benefit of the Manager and put towards banking fees, management of the trust and dispersed as required by the Real Estate Act.  The Security Deposit will be held in a separate Trust with the Manager to be processed after a Tenant has moved out of a property.

Rent statements for Full Service are issued annually.  For Premium Service it is issued monthly.

FEES: means a fee payable by the Owner to the Manager, that is, to the Brokerage as designated from time to time, for duties as described within this agreement, carried out by the Manager in respect to the Property.  To be pre-paid or paid with the rent via the Tenant. 

The Owner agrees that the Manager may receive payments for Fees or other invoices from rent held in Trust, credit card or collect payment directly from the tenant, or directly from the Owner for the purpose of, but not limited to, management fees, application fees, pet fees, penalties, and any contractor invoices against the home or management of the property.  All receipts that are against the property shall be provided to the Owner.  Primarily we shall auto-debit the tenant's account for fees and the owner shall receive their portion of rents directly from the Tenant through auto-debit.  Corporate Tenants may pay the whole rent by cheque to the Owner and the Owner shall pay the Manager by auto-debit.

The Owner agrees that the Manager may collect additional fees from the Tenant for maintenance services and/or finders fees for assisting tenants.

The management fee is considered overdue after the rent has been sent to the Owner for 60 days. The Owner agrees to pay a late fee of fifty dollars ($50) per property, per month once the Fee has become overdue. The owner also agrees that rental late fees collected by the manager are paid to the manager for the effort of collecting them.

RELATED ACTIVITIES AND MAINTENANCE: If work is required to be completed that the Real Estate Act does not require being completed by a Licensed Real Estate Associate in the Province of Alberta then it is agreed that the work be delegated and/or subcontracted. If the Manager performs tasks that are outside of their direct responsibilities they will bill the Owner as a subcontractor.  

PERMISSIONS AND POWERS: Of the Manager to be performed in a professional manner, authorized and empowered by the Owner as follows:

DISCLAIMER: The Duties of the Manager vary with the service option above.  Every task is performed as applicable to the service option chosen by the Owner.  Permissions and Powers means the Manager has permission and is empowered to act on the Owners behalf but does not necessarily mean it is a Duty of the Manager unless that task is part of the service level the Owner has chosen or requested and paid for.  For example, the Manager has permission to repair a broken item in the home by hiring a contractor, or performing the task if the Manager is able, but it is not a duty because the Manager is a Leasing service and not actually a maintenance contractor in an of itself for the purpose of this agreement.

The the Owner agrees the Manager has the exclusive right to manage the Property. Including collection of rent, Security Deposit, inspections and all communications with the tenant.

The Manager will observe and abide by the Residential Tenancies Act of Alberta including any amendments which are still in effect.

If applicable, Leasing: To make reasonable efforts to obtain and retain tenants to maximize financial returns on the Owner’s property on an annual basis.  This includes balancing vacancy against maximizing monthly rent and minimizing costs.  If the Manager has other priorities that may affect the activities of the Owner they must inform the Owner in writing of these priorities. 

If applicable, Advertising: The Manager will administer the advertising of the Property as necessary

If applicable, background checks: The Manager will complete background checks on prospective individual tenant(s) prior to their occupation of a Property.  This will primarily include gainful employment, sufficient income and tenant history.  This may include other reference checks and credit checks.  The Owner understands that the Tenant’s personal information is private as per the Privacy Act cannot be shared in detail with the Owner without the Tenant’s written permission.

The Manager can assign, renew or cancel leases without prior specific permission from the Owner. NOTE: see the next term. 

With regard to requests here and not covered elsewhere in this agreement the Manager will attempt to contact the Owner prior to proceeding with any action. Depending on the urgency of the item the Manager will act to the best known interests of the Owner. For example, it is more expensive to pay for most furnace repairs over the first service call and a return after providing an estimate than to just get the contractor to fix the furnace the first visit. 

If applicable: The Manager will perform a walkthrough of the Property upon move-in and move-out of a Property by a tenant to document the state of the Property and identify any outstanding items caused by the tenant.  The Manager does NOT do a complete inventory count between tenants but does take pictures of the unit to try and determine that the tenant has not stolen or replaced major goods for lesser ones.  A complete inventory can be requested under hourly charged services.

The Tenant may provide rents to the Owner via electronic method as provided by the Manager, it may be less fees and invoices.  If physical methods of payment are used the Tenant may deliver them to the Manager for forwarding to the Owner. 

The Manager will pursue all delinquent rents and and costs of damages from tenants.  The Owner accepts the Managers direction and statement of reasonable deductions, if required, from a Security Deposit.  The Owner agrees the interest earned on the Security Deposit will be to the benefit of the Manager and cover the costs of managing the Trust.

In the unlikely event that any matters require legal proceedings they can be administered (note, only within activities allowed by the court for a non-lawyer) by the Brokerage and all costs will be borne by the Owner of the Property.  This is usually $75-$600 court fees plus our hourly rate and typically lower court documents or applications such as through the Residential Tenancy Dispute Resolution Service.  Kings Bench cases will be required to be handled by a lawyer.

The Brokerage may delegate on behalf of the Owner, hiring and facilitating work to be completed as necessary such as plumbing, cleaning, furnishing, purchase of supplies, pick-ups, delivery and removal.  For larger jobs the Owner gives permission to the Manager to act a General Contractor to facilitate sub-contractors and perform light tasks through staff such as acquisition of materials and cleaning. 

The Owner understands the Associate is not the only person representing the Brokerage and activities such as maintenance inspections may also be performed by other staff or licensed contractors hired by the Brokerage.  The Owner is to make service requests in writing through the Brokerage website so that the service request can be best ensured to have been received and delegated to the appropriate party.

OWNERS OBLIGATIONS: Only in relation to the Manager.  The Owner may have more responsibilities in relation to their property such as a condominium association, a government, lender, insurer, etc. than this list contains depending on the variable arrangements of the Owner.

If the Owner requires any tasks to be done that are not defined within the task of Leasing, then Owner will pay the Manager as a sub-contractor at local licensed rates.

 

INSURANCE: The Owner covenants to maintain comprehensive public liability insurance to protect the interest of the parties hereto, which insurance shall be in the form so as to protect the Manager in the same manner and to the same extent as it protects the Owner.  This does not mean to name the Manager on the insurance, only that the owners insurance covers activities handled by the Manager which are done on the Owner's behalf.  The Manager emphasizes that the Owner fully understands and receives in writing the insurance policy on their rental property and liability coverage when the unit is considered a rental and/or vacant.  The Owners insurance may require the Owner to do tasks which the Manager does not include in this contract such as inspections every 48 hours when vacant.

The Owner shall plan for a maintenance budget of approximately 15% of annual rent received or 1.5 month’s rent value.  This is not required spending, it is merely good planning.  This would include normal wear and tear than may not be actually addressed in any given year but may be at the end of a few years.  Older and furnished homes should consider 20%.  Furnished homes shall have new, premium, mattress covers installed on mattresses annually or between tenants.  See FAQ for more details.

Evictions: The Owner shall provide direction to the Manager in writing regarding servicing notices such as evictions.  The manager may not proceed on eviction without Owner's written instruction.  Verbal or text messages will not be acceptable.  The Owner understands that the Manager cannot “make or force” the Tenant to act in a responsible way.  The Owner understands that the Manager can only seek the Owners actual costs in court on the Owner’s behalf and mitigating costs are expected by the court.  The Owner understands the balance of a lease is forfeit by the Owner once a Tenant is evicted.  See FAQ for more details.  Notices shall be posted within 2 business days from written direction.

If the unit is partially or fully furnished (excluding appliances), the Owner must provide the unit inventory list.  If the Owner cannot complete this checklist then the Manager can at an hourly rate.

The Owner will in a timely fashion pay their own, but not limited to, mortgage, property taxes, condo fees and various utilities when included in the rent and any and all other liabilities regarding their property.  The Owner shall have all the Owners mail forwarded to the Owners own address.

The Owner will supply a lawnmower to the Tenant if the Property has a lawn in which the resident is responsible for it’s care.  An electric lawnmower and extension cable is recommended.

Appliances: The owner agrees, the same as regular maintenance, to pay for a technician to assess any appliance issues.  If parts for appliances appear to take too long to obtain (determined based on nuisance to the enjoyment of the tenant) the Owner agrees to replace any appliance plus the cost of delivery, plus the cost of proper removal plus installation as applicable. In this case the washer and dryer are the highest nuisance followed by the full loss of the stove.  The owner is aware that if these appliances fail the tenant can request from the owner, via the court, the tenants costs be reimbursed for hiring laundry services and/or eating out and it is best to be avoided.

The Owner agrees that if fridge compressors are broken they will replace the whole fridge immediately as they take too long to repair and tend to cost nearly as much as a new fridge.  

The Owner agrees to allow remote access for pre-screened applicants via lockbox and/or keyless entry. This is usually pre-existing tenants looking to change units or third party relocation services.

The Owner must be aware of the receipt of rent into their account and in the event of late rents, inform the Manager for further action.  Banking and software systems do make mistakes and have glitches that need to be caught as soon as possible.  Rents usually arrive within 5-8 business days of when the tenant sends it.

The Owner agrees to provide and maintain the Manager with the Owner’s current full address of residency email, phone number and any methods to contact the Owner in the event of an emergency. 

The Owner agrees to respect, support and honour the Manager’s operating Policies & Procedures and Fee Schedule for a la carte services (determined by the local manager).

The Owner shall accept the inspections provided by the Manager and the instructions provided by the Manager.

For full service, the Owner shall respect the privacy of the Tenant and shall not contact the Tenant except through the services of the Manager.  If the Tenant attempts to contact the Owner the Owner shall ignore, block and report the communication to the Manager. If the Owner contacts or enagages in communication with the Tenant directly this shall be considered a breach in agency.  Please see the FAQ for more details.  Please contact your local manager for information and clarification.

 

The Owner shall pay all Vendors including the Manager, within 30 days of receiving an invoice.

If after 30 days the Owner has not paid a Vendor and not legitimately disputed the invoice then the Owner gives the Manager permission to pay the invoice and auto-debit the Owner’s account plus $50 and 10% of the bill.  Performed tasks are not up for price negotiation.  Merely stating a bill is "too much" is insufficient unless appropriate comparisons can be quantified with similarly qualfied, insured and licensed competitors.  Owner are not allowed to complain about the work completed to the contractor for the purpose of reducing the bill.  All disputes are to be handled through the Manager.  Our contractors serve all our owners and any owner disrupting service risks service interruption to themselves and the other owners and so may be charged a penalty.

LIMITATIONS OF THE MANAGER’S LIABILITY: 

 

The Manager shall not be liable to the Owner for any arrears in the collection of rentals or other payments due from tenants or any one with respect to the operation of the property or as a result of any damage or other loss affecting the property or the operation of its equipment, or for any error in judgment or for anything which it may do or refrain from doing unless any resulting damage, loss injury or liability has been caused by the negligence of the Manager or those for whom it is in law responsible; nor shall the Manager be liable to the Owner for failure to perform any of the obligations set forth in this Agreement if such failure is occasioned by or results from destruction or damage to the Premises by fire or other cause, a strike or lockout, a civil commotion or disturbance, an act of God, a supervening illegality or any other act or cause which is beyond the reasonable control of the Manager except if due to the negligence of the Manager or those for whom it is in law responsible.

The Manager seeks positive working relationships with multiple contractors within a trade.  The Owner agrees any contractor is responsible for their own availability and performance.  The Owner does not hold the Manager responsible for contractor performance.

The Manager will inspect the work of the contractor to the best of the Manager’s ability but the Manager is not responsible for disputes of workmanship.  The Manager does arrange bulk buying power through the group of Owners the Manager represents and any disputes affect all parties, both owing monies to contractors and contractors performing appropriately for the potential work we offer.

The Manager is not responsible for the Owner's personal cash flow from the property, that is, if the revenues from the Property do not cover the Owner's costs, such as their mortgage, it is the responsibility of the Owner to cover the costs themselves. Although, we do care and will do our best to ensure this investment works for the Owner before we do anything. 

The Owner understands and agrees that the Manager is not responsible for delays in funds transfers by neither the Tenant nor the banking systems.  The Owner is accepts that the normal time for deposit by the electronic funds transfers is 5-8 business days.

The Owner agrees that the Manager provides the Tenant electronic/internet based banking services and understands that the Manager cannot see what is deposited into the owners account.  The Owner must inform the Manager of any discrepancies.  If the Tenant provides a cheque the Manager may mail them to the Owner, or the Owner’s bank rather than in person deposit.

The Manager does neither the Owner’s accounting nor recording of the funds they have received.  The Owner is to inform the Manager of discrepancies.  The Manager shall provide an end of year receipt for fees collected in regard to Brokerage Fees.

The Manager does not deliver or run errands on behalf of the Owner within the monthly fee structure.  This includes forwarding mail, providing keys or access for insurance, adjusters, assessors, condo managers, maintenance technicians, etc.  The Manager will cooperate with providing a pickup location as needed, shall charge the owner for time to travel, and if additional keys are needed, for the cutting of keys.  At no time shall the Manager release their last key to a third party.

The Manager shall provide a receipt for services and copies of invoices received.  If a contractor performs work but does not provide a receipt after payment the Manager shall provide the owner a receipt for the work from the Manager.  For contractors that bill the Manager for multiple property invoices the Owner may receive a receipt from a Billing Provider.  The Manager may also invoice the Owner for small maintenance work through the Billing Provider.

The Owner hereby agrees to hold the manager harmless from any and all claims, charges, debts, demands and lawsuits, including attorneys fees related to the management of the property and from any liability or injury on or about the property which may be suffered by any employee, tenant, guest or other persons which may or may not have cause to enter the property.

In other words, the Manager is not responsible for people getting hurt or as an indirect beneficiary of the property.

It is possible for a Tenant to mistreat a Property.  The Manager will do their best to avoid this for both the Owner’s benefit and the Manager’s as problems by Tenants cause undue work, stress and poor business reputation for the all parties involved. 

TERM AND COMMENCEMENT:

The Manager will commence management of the property whenever the Owner so directs the Manager to begin, in writing (by email) but no sooner than the date that this agreement is signed.

There are no annual renewal terms.  The agreement remains in effect while the Lease, including auto-renewals, AND/OR Tenant are those provided by the Manager.  In other words, if the Tenants still resides on the Property this service agreement remains in effect. 

There is no preset duration of this agreement.  The contract survives any lease AND/OR Tenant provided by the Manager.

ASSIGNMENT/Change of Management:  The Manager may, with 30 days notice, assign this service agreement to another Brokerage, change their business name, and/or the Associate which will serve as the primary contact.  The Manager shall provide any new contact information at that time.

TRANSFER OF OWNERSHIP/SALE OF THE PROPERTY: If the Owner transfers ownership of the Property during the Term of the management agreement or Lease, the Owner agrees to ensure the New Owner (or Buyer) assumes the role of the Owner in this management contract and all that it entails OR pay the Manager equal to the management fees that would have been earned by the manager to the end of the current agreement with a minimum of $1500 (one thousand five hundred).

If the tenant is the purchaser the Owner agrees to use the transaction services of the Manager for a one-time cost of $5000 (five thousand).  If the Owner had the property listed with another Brokerage and the tenant was the purchaser the Owner will pay a transaction fee of $2500 (two thousand five hundred).  During the sale of a property while a tenant is in place the Manager will withhold from the rent $1500 (one thousand five hundred) as a retainer in the event of a transfer of ownership.

In the event the Owner is going bankrupt they must notify the Manager upon the first missed mortgage payment.  All rents will be paid to and for the Manager from the beginning of bankruptcy proceedings until the title has changed.  This will be to cover the Manager's costs of lost contract and additional costs incurred transferfing the tenant.

 

TERMINATION:  If either party wish to end this agreement they must do so in writing no less than three and a half (3.5) calendar month's notice before the end of the existing lease.  Either party may cancel the contract during a time in which the property is vacant. 

Should the Owner fail to provide the 3.5 months calendar notice required they may still end the agreement by paying the Manager equal to the management fees that would have been earned by the Manager to the end of the existing tenant’s lease plus an additional 3 months.  If the Owner renews the lease with the Tenant afterward the Owner must again buy-out the Manager of the agreement as this agreement is tied to BOTH the Lease AND the Tenant. 

This agreement can be terminated by either party with one (1) full calendar month’s notice in the event that any of the following incidents should occur:

If the Owner becomes bankrupt, insolvent or takes any steps, actions proceedings for its dissolution, wind-up, liquidation, foreclosure, consumer proposal or similar action involving the property all futher rents shall be paid to the Manager to cover loss of contract, utilities, maintenance and any legal costs the Manager may incur against the tenant.

The Property suffers such destruction, damage or frustration where the tenancies become null and void. 

Cancellation fee: if the owner decides to cancel this contract BEFORE we have aquired a tenant but after we have begun advertising the property the owner can do this anytime with a cancellation fee of no less than $200 and no more than $500.00 OR the owner can downgrade the account choose to downgrade to the $29/mth * 2 years SelfManageProperties.com in leu of cancelling.

The Manager or the Owner fails to perform, or is in default of performance of its agreements and covenants and has not taken adequate steps to remedy such default after twenty-one days of receiving a written notice of nonperformance, stating the specific non-performance.

 

On termination of this Agreement:

The Manager shall immediately surrender to the Owner all lease agreements and move-in inspections, subject to the provision that the Owner shall reimburse the Manager or any reasonable costs in connection with reproduction of documents and information which the Manager, acting reasonably, is of the opinion that it should retain to support or verify its action during the currency of this Agreement; and

The Owner shall assume the obligations of any and all contracts which the Manager has made for the purpose of arranging the services to be provided pursuant to this Agreement.

CONFLICTS OF INTEREST. The Manager may act as a General Contractor or perform work not related to the licensed activity or responsibilities of the Manager in this agreement.  The Manager shall invoice the Owner on behalf of the sub-contractors and/or the Manager via Fort Maintenance.  The reason for this is that contractors negotiate with the Manager as a group client and if one Owner does not pay the contractor as agreed the contractor may end the service agreement arranged for the benefit of all Owners.  The Owner agrees to honour the group service agreement, either implied or written, in order to receive ongoing services such as customer service arrangements (ex, pre-screening for false emergencies) and discount after-hours emergency plumbers, electricians, small jobs contractors and cleaners.  In this situation the Owner understands that this is a conflict of interest as the Manager has an interest in the Owner paying the invoice and the Owner agrees that this is acceptable to the Owner.

FINAL PERMISSIONS SUMMARY

I, the Owner of the attached schedule of properties, give the Manager the following rights and permissions regarding the properties named on the attached Schedule, to manage the property: To Lease out the property.  To hire contractors to perform services such as cleaning, repairs, installations, etc; to order, purchase, and collect such items related to the Property; to open, close, and handle any bill or invoice related to the Property in the Owner’s name, address, email and phone number as necessary; and to but not limited to, collect payment from the Owner and/or the Tenant.
 

DIGITAL SIGNING The Manager and the Owner both agree to digital signing of this contract.

 

AGREEMENT: This agreement constitutes the entire understanding between the parties hereto and includes all representations of every kind and nature made by either party to the other.

 

This agreement will inure to the benefit of and is binding upon the parties, their heirs, successors and assignees.

 

The Owner(s) understands and agrees that until this has been submitted to the Manager and acknowledged as received and acceptable by the manager it is not in effect.  If the Owner does not specify a service option then option A is provided by default.

 

IN WITNESS WHEREOF the parties have read and understood every page of this contract and hereunto set their hand and seal, as attested by their properly authorized signing officers: 

Race Real Estate

Mailing address: 200, 200 Carnegie Dr, St. Albert, AB, T8N 5A7

In Fort McMurray:In person by appointment only.

Upon completion of this agreement the Owner(s) must supply

 

A) Government Issue Photo ID and

B) Void Cheque or Cashier’s Debit Form for the bank account they wish funds to be deposited into and for making payments as necessary.

C) Keys or codes to enter the property.

 

I, the owner or legal representative of the above described property(s) agree to this service agreement.

I am the only signer or all other signers have also signed a copy of this service agreement