PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT, dated ______________ is by and between
DECADE COMPANIES INCOME PROPERTIES, A LIMITED PARTNERSHIP, a
Wisconsin limited partnership ("Owner") and DECADE PROPERTIES
INC., a Wisconsin corporation ("Manager").
BACKGROUND:
Owner proposes to acquire a _____-unit apartment complex
located in ________________, known as _______________________
(the "Apartments"). In connection with such acquisition, Owner
desires to retain Manager to manage the Apartments on behalf of
Owner on the terms and for the compensation set forth below.
THE PARTIES, THEREFORE, AGREE AS FOLLOWS:
1. Appointment and Acceptance. Owner hereby appoints and
retains Manager to perform the services set forth herein, and
Manager hereby accepts such appointment and employment, subject
to the conditions of this Agreement.
2. Efforts and Conflicts. Manager agrees to use
commercially reasonable and continual efforts to fulfill its
obligations hereunder. Owner acknowledges that Manager has been,
is and will be engaged to perform duties for other entities,
including Affiliates of Owner and of Manager, that are similar to
those duties to be performed under this Agreement. Owner further
acknowledges that it has no exclusive right to Manager's
services.
3. Term of Agreement. This Agreement shall remain in full
force and effect until terminated as provided below.
4. Compensation. For services rendered hereunder, Owner
shall pay to Manager: (a) an amount equal to five percent (5%)
of rental income received from the Apartments (excluding security
deposits), plus any miscellaneous income received from the
operation of the Apartments (including rental of parking spaces,
coin-operated laundry facilities, and security deposits retained
for breach of leases and resident damage), and an amount equal to
one-half of the first month's rent on any newly-leased apartment
unit payable monthly. The parties acknowledge that this
compensation is competitive with that charged in the area for
comparably sized projects and for comparable quality and quantity
of services.
5. Manager's Authority, Duties and Obligations. During
the term of this Agreement, Manager shall provide the following
services and, in the performance of such services, shall have the
authority indicated to act as agent on behalf of Owner:
(a) To advertise the availability for rental of the
Apartments or any part thereof, and to display "For Rent" signs
thereon; to sign, renew and/or cancel leases for the Apartments
or any part thereof in Manager's own name without prior approval
of Owner; to collect rents due or to become due and give receipts
therefor; to terminate tenancies and to sign and serve in its own
name or in the name of Owner such notices as are appropriate; to
institute and prosecute legal actions; to evict tenants and to
recover possession of the Apartments; to sue for, in its own name
or in the name of Owner, and recover rents and other sums due;
and when expedient, to settle, compromise and release such
actions or suits or reinstate such tenancies. Any residential
lease executed for Owner by Manager shall not exceed a period of
one (1) year.
(b) To keep the Apartments in good condition and
repair under the supervision of Owner; to make or cause to be
made and to supervise repairs and alterations on Owner's behalf;
to purchase supplies and pay all bills therefor. Manager agrees
to secure the prior approval of Owner on all expenditures in
excess of $1,000 for any one item, except monthly or recurring
operating charges and/or emergency repairs in excess of such
maximum, if, in the opinion of Manager, such repairs are
necessary to protect the Apartments from damage, or to maintain
services to the tenants as called for in their leases.
(c) To hire, discharge and supervise all independent
contractors retained in connection with the operation and
maintenance of the Apartments.
(d) To borrow money in the name of Owner provided such
funds are used exclusively for payment of expenses related to the
Apartments.
(e) To make contracts for electricity, gas, fuel,
water, telephone, window cleaning, ash or rubbish hauling and
other services or such of them as Manager shall deem advisable.
(f) To carry at Owner's expense, necessary public
liability insurance with a minimum limit of $1,000,000 in
coverage and workmen's compensation insurance adequate to protect
the interests of the parties hereto, which policies shall, if
possible, be so written as to protect Manager in the same manner
and to the same extent they protect Owner, and will name Manager
as an additional insured under the policy;a nd acquire fire,
liability, steam boiler, pressure vessel, or any other insurance
required.
(g) To pay on behalf and at the direction of Owner,
mortgage and other indebtedness relating to the Apartments.
(h) To follow the directions of any consultants
retained by Owner for the establishment of the Apartments'
procedures and controls.
(i) To bond by a fidelity bond all of Manager's
employees who are responsible for the handling of money.
(j) To pay all taxes and special assessments for
public improvements now or hereafter assessed or levied against
and on the Apartments as they become due and to deliver to Owner
and to Owner's mortgagee, copies of receipts evidencing payment
thereof. Payments may be made in installments as permitted by
the municipality.
(k) To pay all costs of data processing and/or
computer processing charges in connection with the accounting and
controls established by Owner for the Apartments.
(l) To perform such other services as may be
reasonably directed by Owner in the diligent management of the
Apartments.
6. Records and Reports. Manager will have the following
responsibilities with respect to records and reports:
(a) Manager, at the direction and expense of Owner,
will maintain a comprehensive system of records, books and
accounts relative to the operation of the Apartments (as opposed
to the Partnership records and accounts of Owner) in a manner
satisfactory to Owner and according to systems and procedures
established for Owner by Manager under separate agreement. All
records, books and accounts shall be subject to examination at
reasonable hours by any authorized representative of Owner.
(b) Manager shall render monthly statements of
receipts and disbursements and remit the balance due Owner after
deduction of the amounts payable to Manager pursuant to
Paragraphs 4 and 7 hereof.
(c) Manager will furnish such information (including
occupancy reports) as may be requested by Owner from time to time
with respect to the financial, physical or operational condition
of the Apartments.
7. Reimbursement of Expenses. In addition to the
compensation payable under Paragraph 4, above, Owner shall
reimburse Manager for the cost of all goods, materials, and
services used for or by Owner, including without limitation,
telephone, computer and equipment costs, and for all expenses on
an accountable basis incurred in connection with services
performed by employees of Manager including without limitation,
services relating to the collection of rents, services relating
to the maintenance of the Apartments, accounting services, legal
services and secretarial services. In the case of services
performed by employees of Manager, the reimbursable costs shall
be based upon the time actually spent by such employees in
performing such services as supported by time records multiplied
by a rate established by Manager to cover overhead and expenses
incurred to discharge Manager's duties hereunder; however, such
amounts charged to the Partnership will not exceed those which
Owner generally would be required to pay to independent parties
for comparable services in the area in which the Apartments are
located.
8. Termination of Agreement. Either party hereto may
terminate this Agreement upon one hundred twenty days (120) prior
written notice without penalty. Owner shall pay over to Manager
upon the termination by either party, all accrued but unpaid
property management fees plus any amounts payable pursuant to
Paragraph 7.
9. Pending Leases. Upon and after the termination of the
Agreement pursuant to Paragraph 8, above, Owner shall pay to
Manager, in one lump sum, an amount equal to five percent (5%) of
the rental to be paid after the date of termination under leases
for apartment units in force as of such date for the balance of
the terms of such leases. In addition, Owner shall recognize
Manager as the broker in any pending negotiations for the rental
of any apartment units, and in the event of the consummation of
such lease, Owner shall pay to Manager, in one lump sum on the
date of said consummation, a commission at the rate of five
percent (5%) of the total rental to be paid under such new
leases.
10. Entire Agreement, Amendments. This Agreement
constitutes the entire understanding between the parties hereto
with respect to the subject matter hereof. The rights and
obligations specified herein are intended to be construed as
separate and independent from any other prior, contemporaneous or
subsequent agreements among the parties hereto. No amendment or
modification of the Agreement will be valid unless made by
supplemental agreement in writing.
11. Assignability. The rights under this Agreement may be
assigned and the duties hereunder may be delegated by Manager
without the consent of Owner provided that such delegation shall
not relieve Manager of its obligations to Owner hereunder.
12. Severability. If any of the provisions of this
Agreement are judicially held to be invalid, the remainder of
this Agreement shall not be affected thereby.
13. Choice of Law. This Agreement shall, in all respects,
be governed by, and construed in accordance with, the laws of the
State of Wisconsin.
DECADE PROPERTIES INC. DECADE COMPANIES INCOME
PROPERTIES, A LIMITED
PARTNERSHIP
BY: DECADE COMPANIES
By: ________________________ By:___________________________
By: ________________________ By: _________________________