Introduction to Our Residential
Property Management Agreement

The Residential Property Management Agreement that we use for managing your property is very comprehensive.  We are providing  a synopsis of its provisions below.  It contains commentary that explains certain provisions, as well as helpful links to other related information. 

The terms used in the agreement are defined as follows:

• Agent:  This is DMS Properties, LLC Residential Real Estate Services.  The Principal Broker who is responsible for the agreement is Dale M. Servetnick.
• Owner:  This is the legal owner(s) of the property as shown in the Maryland Department of Assessments and Taxation (SDAT) and/or any legal documents required, such as a Power of Attorney or Deed.
• Property:  The address of the home being offered for rent and to be managed by DMS Properties, LLC Residential Real Estate Services
• Terms:  The starting date and ending date of the management agreement.  Typically, our agreement runs for a term of 12 months and then automatically renews for an additional 12 months.
• Management Defined:  This paragraph outlines that the owner(s) authorize the Agent to manage the property.  This includes collecting rent from tenants and hiring appropriate contactors to perform necessary maintenance and repairs.  The owner agrees to honor all expenses.  This also includes finding new tenants for the property under the Exclusive Right to Lease Residential Brokerage Agreement.

Feel free to Contact Us if you have any specific questions.

Leases and Receipts from Tenants

The residential property management agreement contains information about the lease and receipt of funds received from tenants.  We will negotiate the terms of the lease directly with the tenants.  Most of the lease terms are found in the Deed of Lease for Maryland.  It was created by Maryland Realtors.  Generally, the lease term is for a minimum of 12 months and a maximum of 24 months.  There are occasions where short-term leases will be considered.

We collect the security deposit from the tenants once their application is approved by the owners.  This action will remove the property from active marketing.  It will show as PENDING in the regional MLS (Bright MLS).  We will then collect the first-month’s rent payment prior to tenants beginning occupancy of the home.

If we begin managing a property for a homeowner who already has tenants occupying it, the owners are responsible for transferring the tenants’ security deposit to us.  They can elect to continue holding the security deposit if they like.  In either event, they must notify the tenants of the location of the security deposit.  We hold the security deposit in a non-interest bearing account.  It will be returned to the tenant at the end of their tenancy, along with interest as mandated by Maryland law.  The interest will be paid by the homeowner out of their maintenance account.  If there are unpaid balances or repairs that are the responsibility of the tenants, those expenses will be taken from the security deposit.

We are also authorized to collect, as needed, late fees to be paid by tenants.  These funds are retained by DMS Properties, LLC Residential Real Estate Services as additional administrative costs.  Owners can elect to opt out of this provision.  In that event, they will authorize us to complete any rent-collection activities (mailing late rent notices to tenants, filing Failure to Pay Rent actions in District Court, attending hearings, etc.) on the owner’s behalf at the rate of $100 per hour.  

We will also collect from the tenants charges for bounced checks to defray the cost of our bank processing NSF checks.  In addition, we will levy a charge against tenants for any missed appointments.

Disbursement to Owners
and Fees/Commissions

The owner understands and agrees that DMS Properties, LLC Residential Real Estate Services has a first lien against all money collected or to be collected for any non-reimbursed expenses.  In short, we will be paid for our services before any funds are disbursed to the homeowners.

Distributions of funds due to owners are typically completed between the 12th and 14th of each month.  The majority of our homeowners elect to receive their funds through ACH (Direct Deposit) transfers to their designated bank account.  Disbursements are done after the applicable management fee and any expenses are deducted.  Vacant properties that are not actively listed are charged a Vacancy Management Fee.  If there are pending repairs or maintenance, we retain the right to withhold funds for payment to contractors at the completion of the work.

When new tenants are found through the Exclusive Right to Lease Residential Brokerage Agreement, the commission for finding the tenants will be dictated by that agreement.  The commission will be retained and agents compensated accordingly.  At any time, if owner’s account contains a negative balance, it is the owner’s responsibility to forward sufficient funds to cover any shortages.

Pets in Your Rental Property

Landlord is advised that because of a 2012 decision of the Maryland Court of Appeals, pit bulls have been identified as being aggressive and vicious, capable of inflicting serious and sometimes fatal injuries, and are inherently dangerous.  Consequently, the Court held that both the owner of a pit bull and a landlord where a tenant owns a pit bull which attacks a human are strictly liable for any injuries and/or deaths caused by such pit bull.

As the property owner, you will need to make the decision regarding pets.  It has been our experience that rental homes where pets are allowed tend to rent faster.  We believe that is because there are so many more people who own pets than those who don’t.

Rental Licenses for Your Home

You may want to refer to our FAQ about rental licenses.  In addition to the various jurisdictional rental licenses, there are other legal requirements, depending upon the property.

The most important is the lead-based paint certification.  Beginning in 2015, all rental properties that were constructed BEFORE 1978 must be registered and certified.  The tenants will be provided with copies of the certifications upon request.

Inspections and Maintenance of the Rental Home

We conduct a thorough inspection of the home prior to tenants moving in.  This ensures that we have a photographic record of the property condition.  This is helpful when tenants move out.  We conduct an exit inspection, as well, and will use the photos to confirm if there is any damage that should be charged against the security deposit.  In addition, we will conduct periodic exterior inspections.  If maintenance is needed at the property, we will accompany the service provider and inspect accordingly.  At the time of any repairs or maintenance, we will determine whether the cost is the responsibility of the owners or the tenants.

One of the things that need to be maintained at the smoke detectors and carbon monoxide detectors that are installed in the home.  In addition, furnace filters need to be changed periodically.  The tenants are responsible for ensuring these are completed.  Under the terms of the lease, the tenants are required to handle minor interior and exterior maintenance.  If they are unable to do so, we can provide them with a service provider to handle the maintenance at their expense.

Owner Responsibility for
Insurance and Financial Condition

The owners of the home agree to indemnify and hold harmless DMS Properties, LLC Residential Real Estate Services and its agents from any claims, civil or criminal action in connection with the leasing and manage of the property.  This also includes any liability for damage to any other property, injuries or death of any persons.

It is important that the owners maintain adequate insurance on their home.  They should have Owners, Landlords and Tenants Insurance or Extended Premise Liability Insurance with a minimum liability coverage of $500,000.  If possible, owners will name DMS Properties, LLC Residential Real Estate Services as an additional insured.

The owners have the obligation to provide us with any information about any adverse financial condition of the property.  This would include any impending bankruptcy or foreclosure actions.