KAR 11:121 Property Management

Section 10
(1) A principal broker, or an affiliated licensee, shall not engage in property management without a current written property management agreement.

(2) A property management agreement shall contain, at a minimum:
(a) The full name and address of the principal broker’s real estate brokerage company as registered with the commission;
(b) The name and address of the client for whom the property is being managed;
(c) The address of the real estate being managed and the number of units;
(d) The effective dates of the agreement, and a provision stating whether the client agrees to automatic annual renewal;
(e) A provision stating the method for early termination;
(f) The amount of, or the method for computing, the amount of compensation to the principal broker;
(g) The amount of, or the method of determining, the minimum security deposit to be col-lected from tenants for each unit managed;
(h) The name and address of the bank where the principal broker’s escrow or management account is held, and, consistent with KRS 383.580(1), the account number. This information shall also be contained in the lease;
(i) A provision which is in accord with KRS 383.580 setting forth the procedures governing returning or retaining the security deposit. This provision shall also be contained in the lease;
(j) A provision setting forth the conditions under which the principal broker may pay expenses related to the real estate being managed;
(k) A statement setting forth the date when the principal broker shall send the client an accounting of the transactions related to the real estate being managed;
(l) A copy of the form of the lease document which the principal broker shall have the tenant sign shall be attached to the agreement;
(m) A provision whereby the client certifies that he or she has received a duplicate copy of the agreement and the attached lease form; and
(n) The signature and date of signature of the client and the principal broker.

(3) A principal broker shall maintain, in electronic or written form:
(a) An owner ledger for each client of real estate being managed;
(b) A unit ledger for each unit in the real estate being managed; and
(c) Upon the written request of the client of the property being managed, the principal broker shall provide a unit ledger by tenant.

(4) Money received shall be deposited into an escrow or management account of the principal broker within three (3) business days of receipt.

(5) The amount of money received shall be entered into the owner and unit ledgers.

(6) A receipt shall be given for money received.

(7) Expenses paid by the principal broker shall be documented by invoice or receipt, by unit, and retained with a principal broker’s records.

(8) Adjustments to a security deposit shall be made in accordance with KRS 383.580. Adjustments shall also be entered on the owner and unit ledgers.

(9) On the date determined by the parties, a principal broker shall send a monthly accounting to a client of transactions related to the real estate being managed, by unit.

(10) Within sixty (60) days of the termination of a management agreement, a principal broker shall send the client a final accounting that contains any transaction that occurred after the last monthly accounting.

(11) A principal broker who has an ownership interest in the real estate being managed shall:
(a) Maintain a unit ledger for each unit in the real estate being managed; and
(b) Comply with KRS 383.580 relating to receipt, deposit, and adjustment of tenant security deposits.

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