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RPPTL Real Estate Leasing Committee

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Affiliated business transaction and property management

RR
RPPTL Real Estate Leasing Committee
Wed, Dec 2, 2020 9:11 PM

Many property managers are making it mandatory for the tenant to buy renters
insurance, a/c filters, fridge filters, coordination of utility services,
internet, and quite a few other products and services.  Some things are not
mandatory but more and more are.

The property management companies are making quite a bit off of these
arrangements with kickbacks becoming very common and addictive.

Does anyone know much about this type of thing and the legality?

Would an affiliated business statement be enough in the lease or the
addendum that they are using?

I know there is disclosure needed with an ABA for real estate closings due
to RESPA but rentals?

Not only is this occurring between the tenant and the property manager but
also the property manager and the owner.  For example, the property manager
uses a third party inspection service for move in and move out inspections,
the owner pays for it and the property manager is getting a kickback from
the third party inspection service.

It's getting really common.

Any experts out there?  I may have some clients who need something written
up properly in their property management agreements.

Thanks!

Harry

LAW OFFICES OF
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:  http://www.evict.com/ www.evict.com
Email:  mailto:harry@evict.com harry@evict.com

https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870

Visit us on Facebook

THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND
INTENDED FOR THE PERSONS NAMED ABOVE ONLY.  ALL OTHER USE, COPYING, OR
DISTRIBUTION IS STRICTLY PROHIBITED.

Many property managers are making it mandatory for the tenant to buy renters insurance, a/c filters, fridge filters, coordination of utility services, internet, and quite a few other products and services. Some things are not mandatory but more and more are. The property management companies are making quite a bit off of these arrangements with kickbacks becoming very common and addictive. Does anyone know much about this type of thing and the legality? Would an affiliated business statement be enough in the lease or the addendum that they are using? I know there is disclosure needed with an ABA for real estate closings due to RESPA but rentals? Not only is this occurring between the tenant and the property manager but also the property manager and the owner. For example, the property manager uses a third party inspection service for move in and move out inspections, the owner pays for it and the property manager is getting a kickback from the third party inspection service. It's getting really common. Any experts out there? I may have some clients who need something written up properly in their property management agreements. Thanks! Harry LAW OFFICES OF HEIST, WEISSE & WOLK P.A. PH: 1 800 253 8428 FAX: 1 800 367 9038 "Serving the Property Management Professional" Website: <http://www.evict.com/> www.evict.com Email: <mailto:harry@evict.com> harry@evict.com <https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870> Visit us on Facebook THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND INTENDED FOR THE PERSONS NAMED ABOVE ONLY. ALL OTHER USE, COPYING, OR DISTRIBUTION IS STRICTLY PROHIBITED.