Property Management Agreement Template (Page 5 of 10) in pdf

deficiency.

4.7

Operating Budget.

(a)

Agent shall prepare a recommended annual operating budget and projected rental rates for the

Property for each Fiscal Year during the term of this Agreement. Agent shall submit the annual

operating budget to Owner at least 90 days before the beginning of such Fiscal Year. The

proposed budget shall be subject to approval by Owner. Owner shall inform Agent of any

changes incorporated in the approved operating budget within 45 days after receipt from

Agent.

(b)

The annual operating budget shall include a schedule of recommended rents to be charged for

each Rental Unit, including recommended Rent increases with respect to Lease renewals and

new Leases. The recommended rents shall be in compliance with the Property Requirements,

including consideration of changes in median family income and utility allowances.

(c)

In preparing each proposed annual Operating Budget, Agent shall use its best efforts to take

into account anticipated increases in real estate taxes, utility charges, and other operating costs.

To the extent feasible, Agent shall support anticipated increases in real estate taxes and utility

charges with written evidence or documentation.

(d)

At the same time Agent prepares the annual Operating Budget, Agent shall prepare for Owner’s

approval an assessment of the capital needs of the Property for the coming year and for the two

years following the coming year.

(e)

Agent shall make no expenditures in excess of the amounts in the approved operating budget,

for each line item of operation expense itemized, without the prior written approval of Owner,

except as permitted pursuant to Article 4 for emergency repairs involving manifest danger to

persons or property, or required to avoid suspension of any necessary services to the Property.

4.8

Escrow and Tax Payments; Property Tax Exemption:

- If required by the terms of a mortgage

encumbering the Property, Agent shall make monthly escrow payments required under the mortgage loan for

the purpose of funding insurance, tax, and such other reserve or escrow accounts from funds collected. Agent

shall promptly present tax bills and insurance premium notices to the escrow agent for payment and shall

furnish Owner with evidence of timely payment of such taxes and insurance premiums, and of timely payment

of mortgage and escrow payments.

4.9

Agent shall acquire and keep in force at Owner's expense any and all licenses and permits required for

the operation of the Property as rental housing.

4.10

Agent shall prepare and provide reports reasonably required by the Owner (such as monthly occupancy

reports, Property’s balance sheets, monthly budgeted and actual income and expense reports, and tenant

eligibility reports, etc)

4.11 Agent shall establish and maintain a system of records, books, and accounts in a manner reasonably

satisfactory to the Owner. Agent shall establish Tenant files containing copies of Leases, certification forms,

notices, and other documentation reasonably required by Owner. All records, files, books, and accounts shall

be subject to examination at reasonable hours upon reasonable notice by any authorized representative of

Property Management Agreement Template Page 5

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