California has one of the highest number of rentals in the US, according to the Public Policy Institute of California. With this many renters come a significant demand for rental property management, helping landlords to oversee their properties while handling day-to-day activities.
Some of these responsibilities include rental property maintenance. In Contra Costa, California, who pays for these repairs -- the landlord or property manager?
This helpful guide explains who pays for property management expenses.
Rental Property Management: Who Pays for Repairs?
In short, landlords pay for repairs, although a property management company oversees these repairs. However, it's not always this cut and dry, as landlords might need to approve these repairs before completion.
When landlords hire property managers, these owners delegate daily responsibilities to management companies. This doesn't mean the property manager foots the bill for repairs -- they use funds from the landlord's reserve account to pay for any approved maintenance requests. This is true for residential and commercial properties alike.
Property managers are tasked with keeping each rental property in good condition, working in tandem with owners to agree on budgets and overall expenses.
Where Do These Funds Come From?
These repair funds are typically held in some type of emergency escrow account, allowing property managers to quickly access cash for repairs. This might be any of the following accounts:
- Savings account
- Checking account
- Money market
These accounts are perfect for emergency repairs or routine work in rental units. This is where open lines of communication between a landlord and property manager are paramount, as these funds need to be replenished. It's common for property managers to evaluate what they think a rental will cost in repairs and ask for this amount to be held in escrow.
To streamline the entire process, landlords may allow a property management company to take a portion of rental payments and apply it to said escrow account as needed.
Can Property Managers Make Repairs Without Landlord Approval?
This depends on the contract between a landlord and a property manager. Before entering into any type of business agreement, the two parties decide on specific roles. This includes what repairs a property manager can agree to make without the landlord's approval.
Next, they'll discuss what type of routine maintenance a property typically encounters in any given year. From here, the landlord gives the property manager a set budget to stick to. Anything over this may require landlord approval.
Property managers may need to budget for personal expenses. This includes charging landlords a fee for any repairs that require their attention, as this takes time and energy and deserves compensation.
Work With the Best Contra Costa Property Managers Today
Rental property management might oversee repairs, but these managers aren't tasked with paying for them out of pocket. With landlords, budgets and escrow accounts are created. These funds come from rent but are used to pay for any repairs.
If you're a landlord in Contra Costa, California, and need an experienced property manager for your rental, contact PMI East Bay today. We offer Free Rental Analysis, tenant screening, rent collection, and more.
