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property management agreement - 25 circle dr, dixmoor, il 60426.pdf

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PROPERTY MANAGEMENT AGREEMENT Background A. The subject property of this agreement is located at 25 Circle Dr, Dixmoor, IL 60426 referred to hereunder as the ‘The Premises’. B. The Premises is currently held in a Delaware Limited Liability Company known as Lofty Holding 25 Circle Drive LLC, referred to hereunder as ‘The Company'. C. The Company’s nominee is Earl Vanze Co as Authorized Officer of Lofty Holding 25 Circle Drive LLC, referred to hereunder as ‘The Officer’. D. The appointed member of The Company to serve as managing member according to the terms set out below is ECO Systems, LLC and/or its vendors and assignees, referred to as ‘The Property Manager’. E. Collectively, the Officer and The Property Manager will be referred to as ‘The Parties’. A. The Property Manager shall establish or have established trust accounts for the purpose of holding, collecting and disbursement of the Company’s funds and Operating Reserves, hereinafter referred to as ‘The Account’. B. This is an agreement (‘The Agreement’) to agree to terms with The Property Manager to manage The Premises as agreed herein. C. The Date of the Agreement is established upon its execution date. IN CONSIDERATION OF the Officer appointing The Property Manager to manage the Premises, both parties agree to keep, perform and fulfill the following promises, conditions and agreements: Appointment of Agent 1. The Officer hereby appoints and grants The Property Manager the exclusive right to rent, lease, operate and manage the Premises. Term 2. This Agreement shall run for a period of 5 years. After the initial term, this Agreement shall automatically renew for successive periods of 5 years until such time as this agreement has been revoked by the either party with 60 days’ written notice or such time as the Premises is no longer held in the Company. Right to Terminate 3. During the Term, the Officer may terminate this Agreement at any time with 60 days’ written notice in accordance with its obligation as the Nominee Officer. The Property Manager must satisfy all terms and conditions of this Agreement and the related Company Operating Agreement. Any default of such terms and conditions may result in the termination of this Agreement by the Officer. Fees 1. In consideration for the services provided, the Company agrees to pay The Property Manager the following fees: Management Fee: 15% of Gross Monthly Rent until the property is stabilized at which point it lowers to 10% of Gross Monthly Rent. At this point the 5% decrease in PM fee will be directly sent to the operating reserve. Definition of stabilized: A property that has been receiving rent consistently for 4 months and has a 100% full operating reserve. Leasing Fee for New Tenancies - one month's rent (only when a new tenant is placed) Lease Renewal Fee – None Maintenance and Repairs Margin – None Leasing 2. The Officer hereby grants The Property Manager power to create rental agreements related to the Premises. Security Deposits 3. All security deposits collected must be deposited and held in accordance with the laws of the state in which the property is located. Returning said security deposit shall be the responsibility of The Property Manager upon vacating tenants. Monthly Lease Payments 4. The Parties agree that The Property Manager shall manage all lease payments. Any amount owed to the Company shall be deposited monthly in the Account. Any default in monies owed by Manager in the related Company Operating Agreement shall be considered a default in this Agreement. Repairs/ Maintenance 5. The Officer hereby gives power to The Property Manager to supervise repairs, improvements, alterations, and decorations to the Property as well as purchase and pay bills for services and supplies. The Property Manager may hire contractors to repair, maintain, or alter the Premises. Any funds expensed greater than $1000 for any single repair, improvement, or alteration which shall require reimbursement from the Company must be approved by members of the Company prior to such expenditures, unless the repair is deemed immediate and necessary by The Property Manager. Accordance with Federal and State Law 6. All services provided by The Property Manager shall comply with federal, State, or local law. To include but not limited to Fair Housing obligation, signage, financial reporting, zoning, and all enacted laws governing its role as The Property Manager. Evictions 7. The Officer hereby gives power to The Property Manager to sign and serve notices on the Officer’s behalf and prosecute actions to evict tenants; recover possession of the Premises; recover rents and other sums due; and, when expedient, settle, compromise and release claims, actions, and suits and/or reinstate tenancies. Lease Alterations 8. The Officer hereby gives power to The Property Manager to initiate, sign, renew, modify, or cancel rental agreements and leases for the Premises, or any part thereof and collect and give receipts for rents, other fees, charges, and security deposits. 9. Permitted rental agreements could include: Fixed-Term arrangements not exceeding 2 years and 11 months, month to month rental arrangements in accordance with the Governing Law, or other rental periods so long as they do not exceed the herein established limit. Short-Term Rentals fewer than 30 days must be approved by members of the Company. Due Diligence 10. The Property Manager accepts the appointment of the Officer and agrees to use due diligence in the performance of this Agreement while furnishing their services to properly lease, maintain, and continue the operation and management of the Premises. Funds 11. All funds shall be held in the Account and be the responsibility of The Property Manager. All funds managed under this section must be done so in accordance with applicable law. The Property Manager shall be obligated to provide full reports of all funds being managed and access to the Account on a monthly basis and upon request. Advertising 12. The Officer grants The Property Manager the right to display "For Rent / Lease" and similar signage on the Premises and advertise the availability of space through publications and online marketing methods. Hiring Contractors 13. The Officer hereby gives power to The Property Manager to contract, hire, supervise and/or discharge firms and persons, including utilities, required for the operation and maintenance of the Premises. The Property Manager may perform any of The Property Manager’s duties through attorneys, agents, employees, independent contractors, and outside vendors. Expense Payments 14. Any reimbursement to be paid by Officer, in its role as Nominee, to Manager beyond the combined balance of the Company's Account and Operating Reserve must be approved by the members of the Company. Such expenses and costs may include, but are not limited to, property management compensation, fees and charges, expenses for goods and services, utilities, property taxes and other taxes, association or condominium dues, assessments, loan payments, and insurance premiums. 15. Manager may contract for all utilities and maintenance to the Property and other regularly recurring expenses that Manager determines are reasonable to maintain and care for the Property in the name of the Company and at the expense of the Company. Performance Metrics 16. The Property Manager agrees to use commercially reasonable efforts to meet the following performance standards: a. Occupancy Rate: Maintain an average occupancy rate of not less than 85% per calendar year; b. Turnover Time: Complete tenant turnover, including cleaning and listing for new occupancy, within 14 calendar days of unit vacancy, provided sufficient funds are made available by the Company; c. Repair Response: • Emergency repairs (e.g., HVAC outage, water intrusion) responded to within 24 hours and completed as promptly as commercially reasonable; • Non-emergency repairs responded to within 3 business days. 17. Failure to meet these KPIs for two consecutive quarters shall constitute a performance deficiency and may subject The Property Manager to corrective action as determined by the Company, which may include written warnings, suspension of fees, renegotiation of terms, or termination in accordance with this Agreement. Non-Interference with Tenants 18. All members in the Company signing herein shall not directly contact, visit, communicate with, or interfere with any tenant(s), occupant(s), or applicant(s) residing at or applying to lease the Premises, without the prior written consent of The Property Manager. 19. All communications regarding tenancy, lease terms, maintenance, payment, notices, or legal processes shall be conducted exclusively through The Property Manager, who serves as the sole authorized liaison for the Premises. 20. A first violation of this provision shall result in a written warning to the responsible Company member(s). Subsequent violations may result in the assessment of liquidated damages to the responsible Company member(s) in the amount of $5,000.00 per occurrence, with a maximum aggregate cap of $15,000.00 per calendar year. These damages are intended to reflect the difficulty of quantifying disruptions to tenant relationships and are in addition to any injunctive or equitable relief to which The Property Manager may be entitled. 21. In parallel, The Property Manager agrees not to directly contact, visit, or interfere with any personal tenants, clients, or managed properties of Company members outside the scope of this Agreement, nor shall The Property Manager act in a way that exceeds its authority or materially breaches fiduciary obligations. In the event of such misconduct, the affected Company member(s) shall be entitled to pursue injunctive relief and, if The Property Manager fails to cure the breach after written notice and 14 days’ opportunity to cure, may seek liquidated damages in an amount equal to $5,000.00 per material violation, subject to the same $15,000.00 aggregate annual cap. 22. These remedies are not exclusive and are intended to supplement the right of either party to seek actual damages, attorneys’ fees, or other legal or equitable relief. Insurance 23. The Property Manager shall maintain the following minimum insurance coverage throughout the term of this Agreement: a. Commercial General Liability Insurance: Not less than $1,000,000 per occurrence and $2,000,000 aggregate; b. Professional Liability (E&O) Insurance: Not less than $1,000,000 per claim; c. Fidelity Bond / Crime Insurance: Minimum coverage of $100,000 against employee dishonesty, if The Property Manager has any employees. 24. The Property Manager shall provide proof of insurance upon execution of this Agreement and upon renewal of any policies. Amendments 25. This Agreement may only be amended, modified, or terminated by the written consent of a supermajority vote of not less than sixty percent (60%) of the outstanding voting interests of the Company, as defined in the Company Operating Agreement. Any unilateral amendment by the Officer or The Property Manager shall be void unless duly ratified by the Company in accordance with this section. Notices 26. Any written notice to the Officer or The Property Manager required under this Agreement shall be served by sending such notice by Certified Mail with return receipt. Such notice shall be sent to the respective address found within the related Company Operating Agreement and held on account by the Officer. Mediation 27. In the event of a dispute between the Company members and The Property Manager, but not involving the Officer, the Parties agree to first attempt mediation facilitated by Lofty AI Inc., acting in a neutral capacity. 28. Lofty AI Inc., as Officer, shall coordinate the selection of a mutually agreed-upon neutral mediator. Lofty AI Inc. may assist in administering the mediation process but shall not serve as the mediator unless expressly agreed to by all P