Topic: I have been a property manager now for 21 years and have never heard of a fee for a renewal?

I wanted to ask everyone's thoughts. This was in my newest lease renewal addendum. Please read it carefully: essentially anytime you sign a renewal (more than 60 days within the lease expiration period) my management company is now charging a $95 fee. If within 60 days (and they only contacted me about renewing 40 days out), it is $195.00. This is on top of the now $25 monthly fee they are charging each property for a tenant management fee paid directly to them (on top of ownership management fees). I have been a property manager now for 21 years and have never heard of a fee for a renewal? Or a direct tenant management fee? I appreciate the input. I don't want to sign now with what amounts to a $495 increase with all their fees, but am 2.5 weeks out from expiration. This seems excessive imo

That is crazy,you will probably loss a lot of tenants with that.

Sorry, I should have clarified. This is my personal lease renewal. My company I manage for would never do this!

That’s insane! I understand charging after the 60 day notice period, but before?? That seems like punishment for wanting to continue to live at your property. I’d move!

I’ve seen this before at a sister property (it was not across the board but something the pm came up with...the only reason it came out was the apm was in a training session and mentioned how they waived the fee if someone asked which triggered a massive fair housing question)...it was a $200 ‘renewal fee’ that was basically the equivalent of a new move in admin fee. I’ve only ever had to deal with changing the renewal rate if the offer had expired (thankfully).

I’ve seen this with the house I’m renting. It was in a form I signed prior to move in that there would be a renewal fee ???? ridiculous but it was all written out.

We rent a house too. This will be our fourth year. Have never had these fees and never been mentioned. Was just snuck into our renewal

Wow. My residents would have a fit and that would kill our retention. Your management company is coming off as nickel and diming people as we are going through a pandemic. Does not reflect well.

I would simply tell them you aren’t paying it. This wasn’t part of the agreement you signed when you moved in and they should have given you much more notice, at least 90 days, to allow you time to decide if you wanted to renew with these new fees. Sneaking it it with a couple of weeks left until lease expiration is not adequate or fair notice.

This! 100% they are required to give advance notice of fee changes.

I tried this with the new management fee and got nowhere. I haven't even received a response about this renewal fee. Ughhh, I am seriously beside myself. We have paid on time or early for 4 years!! There are some maintenance issues needing addressed that management acknowledges but can't do because owners won't allow. So they aren't really even managing effectively anyway. Just two months ago I was without a refrigerator (with a freon leak into the house) for almost 2 months. And it goes on

Depends in what market u re in. Weather there is shortage of housing and if everyone does it. We have A balance of supply and demand. We actually give great great services to retain residents. The cost of turnovers for us is higher than cost of retention.

Tell them that you are sorry that others aren’t paying their rent but they should be happy that you have continued to do so instead of punishing you by having you pick up the non-payers’ slack.

For the cost of $200 plus if there is a renewal increase, it is more than hiring movers. I’d get out off there. Not to mention what else are they going to throw at ya down the road.

They possibly just want you to move out.

They definitely don't want us to move out. The management company almost stopped managing for the deadbeat owners but were convinced to stay on. They were going to do our renewal a few months ago when all this transpired before they gave it back to owners to handle. And I am sure the owners don't want us to move out because they can't afford any maintenance on top of their mortgage where they are now. Sure paying the mortgage too here wouldn't be good.

I thought we are supposed to reward residents who continue to renew not punish them. Hate this is happening to you and the other residents. I would start looking to vacate.

I agree!!!! Where I work, we do not charge people when they renew. I know a bunch of people who would move out if I told them we were going to charge for their renewal.

I’m familiar with the renewal rates being based on the length of the lease or simply how quickly they renew, but not fees to simply renew ... it has always been a push to incentivize residents to renew, not deter them by adding this fee ????

Wow I’ve never seen this before and I’ve been a PM for 20 years. Rent increases - yes. But renewal fees - no. Did they charge an admin fee at application time? I worked for a company that charged $50 for the app fee and $150 admin fee (which we stated was for lease preparation and move in gifts but really it was just a fee). If we had to cancel a lease and create a new one (for example to add or remove names or to change dates) we charged a $25 fee for that. And of course if the lease wasn’t renewed on time, month to month fees are added.

Who is the property management company? Are they the owner as well? If not I would contact the owner of the property. I wonder if they know that the fee manager is pocketing $25.00 per unit/per month.

They are not the owner. That is a good idea to contact the owner.

I would be willing to bet that they don’t know that the management company is charging a $25.00 management fee directly to the resident on top of the percentage that the owner is already paying. They also may not know about the new admin fee which the management company is probably keeping for themselves as well.

I assume the purpose is to motivate the resident so management knows what is or isn’t coming available sooner which is great A person should know 3 to 4 months if they staying or moving.
Perhaps a automatic renewal if resident fails to provide written notice with acceptance from landlord a minimum of 90 days before the expiration date of their lease the lease will automatically renew for one term with a 10%increase
If resident provides notice 60 days 20% 30 days or less or no notice 30% increase
Obviously an attorney should construct language and perhaps consider at a certain point landlord may want the option to not renew the lease and start marketing unit to others if resident fails to notify landlord at which time another apartment maybe available for them to move into if their apartment is pre-leased

I know that we're running businesses but, wow, it just seems like such a negative ???? to charge all of these fees if someone wants to continue to live with us. I work for a relatively small, local, management company and seeing things like this make me glad that I do. We notify residents 90 days in advance, sometimes more for our communities that are mostly students, and if they do not renew by a certain point they are advised that basically their unit will be going on the market if they don't so they will have to move. It's definitely a motivator

I will never understand charging a fee for “processing” paperwork. It’s like tipping someone at the cash register for simply ringing in your order. Residents paying people fees to do the job that their employer hired them to do. It’s nothing short of nickel and diming residents.

You either think that the place is worth the cost and sign it or you find another place. How they want to structure compensation really isn’t exactly relevant to you. They could put in there that you need to bring them a lollipop every 30 days your job is very simply to ask yourself if the value you are getting is worth the cost you are paying.

I mean how much do they charge you to put notice in. I understand industry standards and all but if iam getting charged new rent plus a fee. How do they expect people to stay iam surprised they just dont roll leases into month to month and charge a fee for that. You never signed a new lease you never put in notice ...you could have saved 500 a month without month to month fees by signing a new lease.

This is fairly common in the real estate side of property management. I’m surprised but not, to see multifamily management co starting to move toward this

Never heard of this either but once they get a hold of a bone it will spread. I would never sign. Amounts to new deposit somewhere else.

I love the PM industy and enjoy being of service to others.
I would like to see my residents sign their lease renewals early but I disagree with charging fees if leases are not signed early.
We should not penalize residents for not signing a lease within our desired time. Residents should be allowed to sign anytime prior to the commencement of the new lease period without penalty.
(I understand they are calling it a fee but it is a penalty as most of us understand it here).
Most of us work hard to make a living and sometimes look to ideas for creating ancillary income for our businesses but this is definitely Predatory.
This is a horrible way to create urgency for the lease signing process, creating ancillary income and not the way to take care of our residents. This will only encourage residents to look elsewhere as they will feel undue pressure and unappreciated.
This is an example of failure to take good care of customers (residents, owners and investors). I am shocked and disappointed to see this practice being introduced to PM and hope to see it come to an end.

Not a good business practice. I wouldn't include this addendum in my renewals.

I would never do it. Whoever came up with this has ZERO business sense and is in wrong business. We grow revenue but also it’s a business to make a resident desire to renew as there are MANY OTHER OPTIONS.
Do an early bird deal to sign within a certain time

Some of these new owners have no clue about the multifamily industry and it shows. I completely agree Tina.

point of order: I've replied on the basis that any building trying this.

I am a Realtor and I would love to see rental buildings do this.
You ask why? it's a rather simple strategy from a marketing point of view and a business.

Any time you charge a fee outside of the years first, you start the thinking of " maybe the grass is greener on the other side let me look at buildings "

Everyone knows rental increase, and that's acceptable. Most people don't accept, or welcome, fee's of any sort.

A rental building that does this would be a target for my local bar advertising in the local area ( believe it or not, bar coasters work ) and I would make sure that it would be part of my presentation if I know the history of the building.

easy pickings.

Without data, we can only assume that retention rates will drop from upper 90's to lower 90's and brand value will diminish. I am also guessing ( I have no data ), that vacancy rates will increase from 2% to 6% or greater.

We've been in this business since 1948 and I've never heard of or seen any kind of "renewal fee" charged by either a third-party management company or an owner management company. We obviously do see Rental Increases imposed for renewals at the end of the current lease term.

Sounds like usury.

This is bad. The owner should have to reply to the push-back. The fee should be pro-rated for timing as well. Wait, there should be NO renewal fee. Some people have to learn the hard way, after nobody renews and gives the renewal fee as the reason for vacating. Sounds like a banker move.

It would benefit them more to offer a $5 decrease in monthly rent if signed early. A few places in our area have done that with pretty good results.

Wow!! I have been doing this for 34 years and have never heard of such a thing. We strive to gain renewals not push them away. I would move out in a heartbeat if I received something like this.