PM & Brokerage Agreement
T&C last update: July 2020 – V1003
Property Management and Brokerage Agreement
This ONERATE PROPERTY MANAGEMENT AND BROKERAGE AGREEMENT (the “Agreement,” or “PMA”), is entered into as of the Effective Date as indicated on the Signature Page as defined below (the “Effective Date”), by and among the Owner(s) as indicated on the Signature Page as defined below (the “Owner”) and HOME365 LAS VEGAS INC., a Nevada corporation (“Property Manager”) by and through its authorized agent Ron Nir, Broker License Number 143667 and Property Management License Number 165042 (the “Agent”), together with Home365 signature page (the “Signature Page”), attached hereto and incorporated by this reference herein, for the management of the property or properties as indicated on the Signature Page (the “Property” or “Properties”). In consideration of the mutual covenants, promises and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree, confirm and reaffirm the following:
ARTICLE 1 – SERVICES
1.1 Engagement of Property Manager. Owner agrees to engage the Property Manager as the sole exclusive authorized representative of Owner to lease and manage the Property, including listing the Property for lease and securing a Tenant upon the terms and conditions of this Agreement, to perform the OneRate Services as described below, and to perform other services agreed to between the parties from time to time (collectively, the “Services”), constituting the Home365 OneRate Program (the “Program”). The Property Manager agrees to furnish such Services to Owner. The Owner acknowledges and agrees that the Services are to be performed through one or more of the Property Manager’s authorized agents, employees, or independent contractors (“Personnel”), and any reference to the Property Manager in this Agreement is inclusive of such Personnel.
1.2 Parties’ Relationship. The relationship of the parties shall be that of principal and agent, and, except as set forth expressly in this PMA, all Services to be performed by Property Manager under this Agreement shall be on behalf of Owner. In taking any action under this Agreement, Property Manager shall be acting only as agent for Owner, and nothing in this Agreement shall be construed as creating a partnership, joint venture or any other relationship between the parties, or as requiring Property Manager to bear any portion of losses or (other than as expressly agreed herein) to be responsible for any expenses arising out of, or connected with, the ownership or operation of the Property. Property Manager shall be an independent contractor of the Owner and shall not at any time during the period of this Agreement be considered a direct employee of Owner. Neither party shall have the power to bind or obligate the other, except as expressly set forth in this Agreement, provided that, however, Property Manager is authorized to act, bind, and obligate Owner as may be necessary to carry out the express provisions, as well as the spirit and intent of this Agreement.
1.3 OneRate Services. Under the Program, in connection with this Article 5, and for the OneRate Fees as described by Section 6.1, Property Manager shall perform for each Property the following services (the “OneRate Services”), up to a maximum aggregate amount of Fifteen Thousand Dollars ($15,000) in costs and expenses (including, without limitation, the Rent Guarantee as defined in Section 5.4) incurred by Property Manager for each Property for a period of twelve (12) months (the “Maximum Program Amount”):
- (a) Advertising of the Property’s rental listings;
- (b) Negotiating, preparing, and performing other services related to any Lease Agreements in accordance with this Article 4;
- (c) Restoring the Property to rentable condition, only if it is reasonable to do so without having to perform material upgrades and/or replacements, including but not limited to as a result of Code changes or HUD requirements, according to Property Manager’s sole and absolute discretion, and subject to the exclusions of Section 1.4;
- (d) Providing general routine repair and maintenance services to address normal wear and tear, as determined by Property Manager in its sole discretion, through Property Manager’s authorized and vetted service providers (the “Service Providers”), including labor and materials;
- (e) Offering preventative maintenance on the Property, as defined and determined by Property Manager in its sole and absolute discretion on a case-by-case basis;
- (f) Starting at ninety (90) days from the Program Start Date (as defined below by Section 5.2(e)) providing general maintenance services during periods of Tenant turnover in order to maintain the Property suitable for re-leasing, subject to the limitations of subpart (c) above, and with the exclusion of any upgrades and other exclusions according to Section 1.4;
- (g) Maintaining and repairing, during the Lease Agreement, and/or at the termination of any Lease Agreement, the appliances that were present in the Property at the time of signing of such Lease Agreement, provided that, however, the Property Manager shall have the right, in its sole discretion, to utilize refurbished parts, refurbished materials, or, should the cost of the maintenance or repair exceed the replacement of an appliance, replace such appliance with another working appliance with substantially the same functions;
- (h) Providing Owner with a comprehensive repair, maintenance and preventative maintenance plan after thirty (30) days from the Program Start Date (as defined below by Section 5.2(e)), and to be addressed during the Program Term;
(i) Starting ninety (90) days after the Program Start Date (as defined below by Section 5.2(e)), providing Owner with financial protection against loss of rental revenue of each Property (the “Rent Guarantee” as defined by Section 5.4), subject to the conditions specified in this Section 5.4.
Additionally, Property Manager shall have the right to perform on the OneRate Properties manual check-ups and place motion sensors, cameras, other types of sensors, alarms and/or security devices on any nature to facilitate the delivery of the Program and increase the security of the OneRate Properties.
1.4 Exclusions. The following are excluded by the OneRate Services and are the sole responsibility of Owner:
- (a) any item covered by the Owner’s homeowner insurance or any other coverage, bond, or warranty service, and/or a Tenant’s rental insurance. Owner hereby expressly authorizes Property Manager to contact its carrier, surety or warranty service for coverage, although Property Manager shall not be obligated to do so;
- (b) Any service requested by any Tenant as a result of the Owner’s coordination or communication with such Tenant (for example, if Owner encourages a Tenant to submit a Service Request to Property Manager to have a specific service performed);
- (c) Cosmetic and appearance issues, which will be dealt with mainly during Tenant turnover;
- (d) Any repairs or maintenance related to CIC or CC&RS non-compliance (for example, repairs or maintenance to any structure built on the Property in contravention to, or without the approval required by, CIC or CC&RS rules);
- (e) Any repairs or maintenance needed because of an application of force to a surface, regardless of the source of the force (for example, force used by humans including in cases of burglaries or unauthorized trespassing, or force used by animals or natural events such as rodents, termites, roots, water, or drainage);
- (f) Any repairs or maintenance attempted before contacting Property Manager, or performed by anyone not authorized by Property Manager;
- (g) Any repairs or maintenance to damages resulting from an underlying condition or defect (e.g. damages to the walls due by a water leak on the floor), if the cost of such repairs or maintenance exceed One Thousand Dollars ($1,000);
- (h) Any repairs or maintenance to damages caused by a “Force Majeure Event,” defined as any act that could not have been reasonably foreseen by Property Manager, including without limitation, acts of governmental authorities, war, war-like conditions, insurrection, revolution, terrorism, riot, looting, strike, lockout, fire, explosion, flood, earthquake, natural catastrophes, health epidemics, pandemics, viruses, health emergencies, other acts of God including weather-related, or other external causes or circumstances beyond the parties’ control. For any Force Majeure Event, and any governmental or administrative directive or order, law, mandatory rent forgiveness, abatement or deferment, and/or major financial crisis, resulting from same, Property Manager shall not be responsible for the costs of any repairs or lost Rent. Further, Property Manager is not required to make any repairs on the Property for Owner, even at Owner’s cost, for a reasonable time after the end of the Force Majeure Event;
- (i) Any Rent lost, uncollected, or forfeited as a result of governmental or administrative directive or order, law, mandatory rent control, rent forgiveness, abatement or deferment, major financial crisis, or any other governmental program, including on a temporary basis, that in any way inhibits a property owner’s right to collect the full Rent on the terms and conditions set forth in a Lease, month-to-month arrangement, or any occupancy agreement.
- (j) Any repairs or maintenance that relate to the Property’s infrastructure, a defect existing at the time if this Agreement, or that are systemic, such as mold, fungus, extensive water damage, or asbestos;
- (k) Any repairs or maintenance related to the garden, lawn, or landscaping;
- (l) Any pool maintenance, if applicable, unless agreed to by separate writing and with Owner directly responsible for any charges. Property Manager also recommends that Owner purchase additional insurance and/or riders relating to the Pool, both for liability and general coverage. Based on the special nature of pools and related equipment, Owner agrees that Property Manager shall not have any responsibility relating to any pool and that Owner will instead rely on the third-party pool vendor for any repair, maintenance, or advice relating to any pool and pool equipment, and installation of any required or suggested restricted access, security or notification device;
- (m) Any pest control unless agreed to by separate writing which will include Owner being directly responsible for all charges.
- (n) Any repairs or maintenance of any Tenant’s personal accessories and commonly moved items of personal property (e.g. lamps, furniture, fans, audiovisual equipment, bikes);
- (o) Any repairs or maintenance excluded by Article 5, including but not limited to, Section 5.2(d);
- (p) Any improvement projects, defined as the replacement, or upgrade to a better quality or new standard or design, of five percent (5%) or more of a surface or that requires a permit from any governmental entity (for example, while replacing most of the roof is an improvement, replacing a few tiles is not, and while re-painting most of the house exterior is an improvement, re-touching a small area is not), provided that, however, improvement projects could be submitted by Owner to Property Manager, who could accept at its sole discretion to perform the requested work for a separate and discounted price as quoted by Property Manager in writing on a case-by-case basis;
- (q) Any service, repairs, maintenance or repair not expressly included by this Agreement;
- (r) For any Property which is furnished or partially furnished, and also applicable to any of a Tenant’s furnishings or personal property, Property Manager shall not be responsible, guarantee, warrant, or otherwise provide any insurance for any such items. Tenant and Owner as the case may be, shall be fully responsible, including without limitation, providing an inventory list of all such furnishings, fixtures, and appliances. Property Manager further strongly recommends that Tenant and Owner procure insurance coverage for such items and/or a rider to Owner’s existing insurance coverage for the Property. Notwithstanding the above, subject to the terms and conditions set forth in this Agreement, including for damages caused by misuse, and further subject to the Maximum Program Amount, Property Manager will be responsible for repair of major appliances such as washers, dryers, refrigerators that are provided by Owner for the Property.
(s) Any repairs or maintenance that Property Manager, in its sole discretion, determines are not within the definition or the spirit or intent of the OneRate Services as provided by this Article 1.
ARTICLE 2 – TERM AND TERMINATION
2.1 Term. Subject to the terms and provisions herein, the term of this Agreement shall commence on the Effective Date and shall continue for twelve (12) months (the “Initial Term,” and together with the Extended Term as defined below, the “Term”), unless terminated before in accordance with this Article 2. At the expiration of the Initial Term, this Agreement shall automatically renew for an additional twelve (12) months period (the “Extended Term”) unless either party provides written notice to the other of its desire not to renew no less than thirty (30) days in advance.
2.2 Early Termination. The Program and this Agreement may be terminated before the expiration of the Term as provided below.
(a) Automatic Termination. The Program and this Agreement shall automatically terminate: (i) when the Maximum Program Amount, as set forth in this Section 1.3 is reached, provided that Property Manager shall provide written notification to Owner within a reasonable time from when the Maximum Program Amount was reached; (ii) if Property Manager receives a charge-back with respect to the Owner’s payment, or is otherwise unable to process payment, for any OneRate Fees or other amounts owed to Property Manager under this Agreement; or (iii) when otherwise provided by this Agreement.
(b) Owner’s Termination. Owner may terminate the Program and this Agreement as follows: (i) after receiving the Adjustment Notice as provided by Section 5.2(c), by delivering to Property Manager a written notice to that effect within five (5) calendar days of receiving the Adjustment Notice, provided that, however, Owner will have to pay a one-time inspection fee to Property Manager of Two Hundred Fifty Dollars ($250); (ii) at any time and for any reason, upon payment of a termination fee equal to the greater of: (x) fifty percent (50%) of the OneRate Fees due under the remainder of the then-current Term; or (y) one hundred and ten percent (110%) of all Property Manager’s actual expenses and costs incurred for the previous six months in performance of the Program for the Properties, less the aggregate OneRate Fees paid by Owner in the six (6) months period preceding the termination notice (the “Termination Fee”); or (iii) after receiving written notice from Property Manager regarding the increase of the OneRate Fees as provided by Section 6.1, by providing written notice to that effect to Property Manager within fifteen (15) business days from such Property Manager’s notice. The Termination Fee shall be equal to Zero Dollars ($0) if Owner terminates the Program for a Property that is being sold, and Property Manager is serving as the exclusive broker or selling agent.
(c) Property Manager’s Termination. Property Manager may terminate the Program and this Agreement as follows: (i) after the Inspection Report, providing a written notice to that effect to Owner within fifteen (15) business days from the Inspection Report; (ii) at any time, with written notice effective immediately, if Property Manager concludes, in good faith and in its sole discretion, that a User (defined below) is misusing the Program; (iii) at any time, if Property Manager concludes, in good faith and its sole discretion, that Owner is in breach of any provision of this Agreement by providing a written notice to that effect to Owner at least fifteen (15) days before the date of effective termination; (iv) at any time if Property Manager concludes, in good faith and its sole discretion, that the number of Service Requests and/or the amount of time under which one of the Properties is vacant materially exceeds those associated with comparable buildings and properties, by providing a written notice to that effect to Owner at least thirty (30) days before the date of effective termination; (v) at any time, if Owner fails to pay any fees or costs due and payable to Property Manager for more than thirty (30) days, and Property Manager provides written notice to Owner of such Outstanding Sums as described by Section 6.2(d), provided that, however, Owner shall have five (5) business days from the Property Manager’s written notice to cure such failure to pay by corresponding the Outstanding Sums, including costs and interest, and this Agreement and Program will terminate at the expiration of such five (5) days if Owner fails to provide any Outstanding Sums to Property Manager.
- (a) Neither party will incur any liability whatsoever for any damages, losses, or expenses of any kind suffered or incurred by the other party arising from or incident to the termination of this Agreement by such party, except as provided by this Agreement or mandated by Delaware law; provided, however, that termination or expiration of this Agreement will not relieve either Party of any obligation reasonably incurred hereunder before such termination or expiration.
- (b) Upon Early Termination of this Agreement by any party, Owner shall pay all sums due to Property Manager according to this Agreement within ten (10) business days from the termination date via certified funds. In the event Owner directs Property Manager to transfer files and documents to Owner or a succeeding management company, Owner shall be responsible to pay Property Manager a transfer fee of Two Hundred Dollars ($200).
- (c) Upon Early Termination of this Agreement by any party, before Property Manager leases the Property for the first time, Owner shall pay Property Manager: (i) all the expenses incurred as it relates to the Property, within ten (10) business days from the presentation of the receipts by Property Manager, via certified funds; and (ii) in addition to other sums due under this Agreement, Two Hundred Fifty Dollars ($250) as consideration for the time invested by PropertyManager in the Property within ten (10) business days from the Termination Date, via certified funds.
- (d) Notwithstanding anything in this Agreement to the contrary, if Property Managers concludes, in good faith and in its sole discretion, that a User (defined below) is misusing the Program, and therefore terminates the Agreement pursuant to thisSection 2.2(c)(ii), Owner shall immediately reimburse all sums spent by Property Manager on the OneRate Properties as a result of the misuse of the Program (the “Program Misuse Reimbursement”) via certified funds. Owner hereby authorizes Property Manager to deduct the Program Misuse Reimbursement from any rent receivables associated with the Properties or to pay such amount through monies available in the Trust Account or Deposit Trust Account (each as defined below).
2.4 Survival. The provisions of this Agreement regarding the effects of termination, representations, warranties, indemnification rights, and/or duties, shall survive the termination of this Agreement. Specifically, the following provisions, among others, shall survive the termination of this Agreement: Section 2.2 (Early Termination), Section 2.3 (Effects of Termination), Section 2.4 (Survival), Article 3 (Notice), Article 8 (Confidentiality), Article 10 (Indemnity and Insurance), Article 11 (Representations, Warranties, and Liability), and Article 12 (Miscellaneous).
ARTICLE 3 – NOTICE
3.1 Notice. Any notice, demand, or communication required or permitted to be given by any provision of this Agreement, or is given in connection with this Agreement, shall be in writing, and shall be deemed to have been sufficiently given or served if (i) sent by overnight courier; (ii) mailed by certified first-class mail, postage prepaid, return receipt requested; (iii) sent by e-mail transmission, or (iv) sent by facsimile. The parties hereto agree that all such notices shall be delivered to the addresses specified below, or in the Signature Page, provided that any party may change its address by giving written notice to the other parties to that effect, per this Section 3.1.
A written notice shall be effective on the date that such notice is sent, mailed, or faxed, whichever is sooner. No objection shall be made by any party as to the manner of delivery of any notice if actual receipt is acknowledged in writing by an authorized agent of the opposing party.
ARTICLE 4 – LEASING AND RENTING
4.1 Lease Agreements.
(a) Owner hereby authorizes Property Manager to negotiate, prepare, sign, terminate, modify, renew, extend, and enforce, in Property Manager’s reasonable discretion, all agreements between the Owner and any individual related to such individual’s rights to use a Property for a specific amount of time (collectively the “Lease Agreements”). All Lease Agreements shall be written based on Property Manager’s approved forms.
(b) For the purposes of this Agreement, a “Tenant” or “Tenants” shall be defined as anyone that engages in negotiations regarding, or enters into, an agreement with the Owner or the Property Manager to use, occupy and possess a Property for a specific amount of time (a “Lease”).
(c) Property Manager is authorized to institute, sign, and initiate in Owner’s name and on its behalf: (i) legal or equitable action for the eviction or dispossession of a Tenant or other persons from the Property, including, if possible, via Summary Eviction (collectively “Evictions”) and (ii) all legal actions or proceeding for the enforcement of any of the Lease Agreements, including but not limited to the collection of rent or other income related to the Property (collectively “Other Suits”). For Evictions, Property Manager is authorized to sign any documents for the initiation, continuance, and completion of such action and in Property Manager’s sole discretion, Property Manager may engage the services of an attorney or eviction service and another necessary vendor (including for posting of notice and service) of its choice by providing written notice to Owner, provided that, however, within ten (10) business days from the receipt of such notice, Owner shall have the right to select a different attorney. For Other Suits, Property manager must obtain Owner’s written permission and if given, Property Manager is authorized to sign any documents for the initiation, continuance, and completion of such action and in Property Manager’s sole discretion, Property Manager may engage the services of an attorney or other service and any other necessary vendor (including for posting of notice and service) of its choice, provided, however, that within ten (10) business days from the receipt of notice of Property Manager’s choice of counsel, Owner shall have the right to select a different attorney. For both Evictions and Other Suits, Owner shall be exclusively responsible for all attorney’s fees, vendor, service provider, expert, and court costs.
4.2 Multiple Listing Service. Owner acknowledges that Property Manager is a participant of the Las Vegas Realtors (“LVR”) Multiple Listing Service (“MLS”), and therefore that the Properties will be published and disseminated to the MLS participants in accordance to the MLS’s own rules and regulations.
(a) Owner hereby authorizes Property Manager to cooperate with other real estate professionals and to report any information regarding the Lease Agreements, including price, duration, and terms thereof, for publication, dissemination, information, and use by other LVR members and MLS participants.
(b) Owner understands and acknowledges that MLS will disseminate the Property’s information to other MLS participants, as well as online websites such realtor.com, lasvegasrealtor.com, and that such information is generally available to the public. Owner recognizes that some of these websites may include a commentary section where consumers may include reviews and comments about the Property, or an automated estimate of the market value of the Property.
4.3 KeyBox, Lockbox, or Smartlock. If the Property is vacant, Property Manager shall take reasonable precautions to secure it, at Owner’s sole expense. Owner hereby authorizes Property Manager to install an electronic or mechanical keybox (the “KeyBox” or “Lockbox”), or an electromechanical lock (the “Smartlock”) in each Property to allow access to any licensed real estate professional for showing to potential Tenants, and to any person per Section
4.4 below. In case of electronic KeyBox, Lockbox, or Smartlock, Owner hereby authorizes Property Manager to issue to any licensed real estate professionals a code valid for one time admittance (the “One Time Code”) as an electronic means to allow them direct access to a Property or its keys. Further, notwithstanding anything to the contrary contained in this PMA, Owner acknowledges that he has been advised and is in acceptance of the following:
(a) The purpose of the KeyBox, Lockbox, or Smartlock is to allow access to the interior of a Property to any licensed real estate professional to facilitate the leasing of such Property;
(b) If a Tenant is occupying a Property, the Tenant’s consent is also required for Property Manager to utilize a KeyBox, Lockbox, or Smartlock;
(c) Property Manager shall not in any way or for any reason be responsible to Owner or any Property’s occupants against theft, loss, vandalism, or other acts or omissions resulting from access to a Property through the KeyBox, Lockbox, or Smartlock; and
(d) Owner shall obtain appropriate insurance against all losses described above.
4.5 Self-Showing. Owner hereby authorizes Property Manager to issue a One Time Code to any person providing to Property Manager the following information: (a) full name; (b) full address; (c) telephone number; (d) credit card; and (e) valid Identification Document (e.g. Passport or Driver’s License) (the “Qualified Person”). Upon Property Manager’s issuance of a One Time Code to any Qualified Person .Owner understands that the Qualified Person will have direct access to a Property or its keys through the Property’s KeyBox, Lockbox, or Smartlock. To avoid any doubt, Owner acknowledges that he has been advised and accepts the following:
(a) The purpose of issuing a One Time Code to a Qualified Person is to allow access to the interior of a Property to such Qualified Person to facilitate the leasing of such Property;
(c) Property Manager will only issue One Time Codes to Qualified Persons for vacant Properties (i.e., Properties that are not occupied by any Tenants); and,
(d) Owner shall obtain appropriate insurance against all losses derived from the issuance of One Time Codes to any Qualified Person and/or as described above.
4.6 Holding Fee. Property Manager may collect from a prospective Tenant a fee in exchange for an agreement to reserve a Property and take it off the rental market for an amount of time specified from time to time before entering into a Lease Agreement (the “Holding Fee”). The Holding Fee shall be the exclusive property of the Property Manager.
4.7 Management and Maintenance Reviews. At the time of occupancy, at the time of expiration of a Lease Agreement, and at any time deemed reasonable by the Property Manager, Property Manager shall make management and maintenance reviews of the Property (the “Reviews”). Following such Reviews, Property Manager shall report to Owner the condition of each Property.
4.8 Utilities and Other Services.
(a) Owner shall be solely responsible, at its own expense and in its own name, to provide and negotiate for each Property’s utilities, including but not limited to electricity, gas, water, waste, and all such other services as necessary or prudent for the operation of each Property (the “Utilities”).
(b) All Utilities’ charges, fees, and/or deposits shall be the sole responsibility of the Owner. Owner authorizes Property Manager to communicate with each Property’s utility companies and service providers and make changes to such utilities or services in Property Manager’s reasonable discretion. Owner shall be responsible for any costs and sums related to any of the Properties’ Tenants’ failure to maintain such utilities or services.
4.9 Violations of Environmental and Other Regulations. Owner shall be solely responsible for each Property’s compliance with any environmental or other regulation. If Property Manager discovers any such regulatory violation, then Property Manager shall notify Owner within a reasonable time, for Owner to cure the violation or offending condition at its own and sole expense.
4.10 Common Interest Community. If a Property is located within a Common Interest Community (“CIC”), Owner acknowledges that Property Manager has no control over the CIC rules and regulations. Owner understands that the CIC’s Declaration of Covenants Conditions and Restrictions (“CC&RS”) may impose restrictions on the use of such Property, including restricting the leasing of the Property, and it is Owner’s sole responsibility to determine whether each Property is subject to such restrictions. It is Owner’s sole responsibility to ensure that each Property complies with the CC&RS at any time, including future amendments and additions. Owner shall solely be responsible for the assessment, violations, and fines/fees imposed and payable to the CIC for violations of the CC&RS. Owner agrees to promptly reimburse Property Manager for any fines or fees paid on Owner’s behalf. Any notice from the CIC indicating Property Manager as owner of a Property, or violator of any CC&RS, shall not affect the terms of this Section.
ARTICLE 5 – ONERATE PROGRAM, PLATFORM, AND RENT GUARANTEE
5.1 Home365 Account. Owner shall create and activate a Home365 Account on www.home365.co/login (the “Home365 Account”) to participate in the Program. The Program’s subscription for the Property may commence only after the Home365 Account is created and activated by Owner. At all times, Owner may request Property Manager to receive the monthly statements, the status, and historic and ongoing events associated with the Property by contacting Property Manager atwww.home365/co/help.
5.2 Program Integration. At a specific date to occur within sixty (60) days from the Effective Date (the “Program Integration Start Date”), Property Manager shall start the integration process aimed to incorporate the Property into the Program (the “Program Integration Phase”).
(a) As a material part of acceptance into the OneRate Program, and to have access to the Platform, Owner has completed a detailed questionnaire describing the Property as provided by Property Manager. This questionnaire included specific data regarding the Property’ maintenance history and material renovations or repairs made to the Property, including but not limited to renovations and repairs made to roofs, floors, water pipes, pumps, or electric systems. Both acceptance of Owner by Property Manager into the Program, and pricing, including the Program Maximum Amount, and the Exclusions, are based upon the completeness and truthfulness of the questionnaire, and if for any reason, the true condition of the Property or its condition varies, Property Manager may increase pricing, lower the Program Maximum Amount, and/or revise exclusions, or Property Manager may, without penalty or liability, terminate this Agreement and remove Owner from the OneRate Program and Platform.
(b) Property Manager, or any of its Personnel, will perform a detailed onsite inspection. If any of the Properties are leased at the time of the inspection, Owner hereby authorizes Property Manager to contact the Tenants to arrange for such inspection. If any of the Properties are vacant at the time of the inspection, then Owner shall provide to Property Manager full access to such Properties. Following a reasonable time after inspection, Property Manager shall prepare, or cause to be prepared, a detailed inspection report (the “Inspection Report”) for each of the Properties, which will be delivered to Owner within a reasonable time after completion.
(c) Within the Program Integration Phase, based on the results of the Inspection Report, Property Manager shall compare the results with the initial questionnaire and confirm or adjust the OneRate Fees as initially estimated in the Signature Page, and provide written notice of the same to Owner (the “Adjustment Notice”). As part of the OneRate Fees adjustment, Property Manager may also require modifications to the provisions of this Agreement, including higher OneRate Fees based on the condition of the Property, additional exclusions or limitations to the OneRate Services, and/or higher or additional deductibles or co-pays for specific items.
(d) If any of the Properties are vacant at the time of the inspection, Property Manager shall confirm whether such Properties are in a rentable condition, and whether repairs are required to make such properties rentable, which shall be the sole responsibility of Owner to perform and pay for, as they are excluded from the OneRate Services. If such repairs are required, all of Property Manager’s obligations under this Agreement shall be suspended until the repairs are completed and approved by the Property Manager.
(e) The Program Integration shall be deemed completed after ten (10) calendar days from the Adjustment Notice unless terminated by any of the Parties under Article 2.2(b). For the purposes of this Article 5, the date in which the Program Integration is deemed completed shall be the Program start date, unless the parties agree to a different program start date in writing (the “Program Start Date”).
5.3 Platform and Service Requests.
(a) Platform. The Program is delivered to Owner and the Property’ Tenants through the Home365 platform, which includes the Property Manager’s mobile application and website (the “Platform”). The Platform will be available to receive service requests on a 24/7 basis and shall respond from 9 a.m. to 5 p.m., local time, every day excluding weekends and national holidays. The Platform may have embedded some additional terms of service, or additional conditions, as in effect from time to time, incorporated herein by this reference (the “Platform TOS”). To the extent that the Platform TOS conflict with the terms of this Agreement, this Agreement shall prevail.
(b) Service Requests. The Owner and/or any of the Property’ Tenants that register on the Platform (each, a “User”) will be able to initiate requests for any of the OneRate Services provided by Property Manager under the Program (the “Service Requests”). The Platform will include access to a portal through which the Owner shall be appraised of each Service Request submitted for any of the OneRate Properties. Property Manager shall review each Service Request, confirm whether the requested service is included in the OneRate Services, and accept or deny the request through a Portal notification sent to the Owner and the User, if different from the Owner.
(c) If Property Manager accepts a Service Request, then the Platform will match the Service Request with an appropriate individual or entity with whom Property Manager has contracted to provide services under the Program (the “Service Provider”). No User shall have the right to refuse a Service Provider.
(d) Property Manager shall have the right to charge to Owner any applicable deductible, as indicated in the Signature Page and as amended from time to time by Property Manager in its sole discretion or by the Adjustment Notice (the “Deductible”), for each Service Request, and as otherwise provided by this Article 5, including Section 5.4. Where a deductible applies to the Service Request, a User cannot refuse or decline to receive services where the estimated amount of the services to be performed is below the applicable Deductible amount.
(e) Emergency Service Requests. If a Service Request requires a prompt or immediate resolution necessary for any of the Property to be accessed or usable (e.g. lockouts, clogs in all toilets, water heater leakage, or breakdown of air conditioning during the summer) (the “Emergency Service Request”), the Platform will employ all reasonable efforts to respond within six (6) hours during workdays, and within twelve (12) hours during weekends and national holidays.
(f) Property Manager shall have the right, in its sole discretion, to determine the severity of a Service Request, including whether it constitutes and emergency, and the time frame and sequence in which each Service Request will be managed and responded to by Property Manager and/or tis Service Provider.
(g) Property Manager shall have the right, in its sole discretion, to re-direct a Service Request to the insurance carrier, bond provider or warranty service that provides homeowner insurance, a bond or warranty service for Owner, applicable to the Property for which the Service Request has been submitted. Owner shall facilitate the handling of such claim with said provider.
(h) Owner agrees that, when the Property is under a Lease Agreement, the Service Requests should be submitted solely by the Property’s Tenants.
5.4 Rent Guarantee.
(a) Property Manager shall continue to pay to Owner the same amount of rental income that Owner was receiving at the time of the Program Start Date from the Property, minus the OneRate Fees, the Deductible, and any other applicable charge including utility charges and/or other Deductible(s) due to repair, even if the Property goes vacant, for the whole duration of the Term, provided that, however, the Rent Guarantee shall not apply to any of the Properties that were vacant at the time of the Program Start Date until such vacant Properties enter into a Lease Agreement while under the Program, and shall continue for the remaining duration of the Term. To avoid any doubt, Property Manager shall have the right to charge the Owner a Deductible, in the amount as indicated in the Signature Page and as amended from time to time by Property Manager in its sole discretion or by the Adjustment Notice, for every time in which the Property Manager’s obligations are triggered under this Section 5.4, which is at every Rent Guarantee Start Date as defined in Section 5.4(b) below, and for each month thereafter that Rent is not paid.
(b) Subject to the restrictions of this Article 5, Property Manager’s obligations under the Rent Guarantee shall start seven (7) days after a Property is vacated (the “Rent Guarantee Start Date”), and shall terminate on the date when a new Tenant enters into a Lease as defined by this Article 4, or as otherwise provided by this Agreement. During such seven (7) days, Property Manager will use all its reasonable efforts to identify new Tenants for such vacated Property. For purposes of clarity, Owner shall be the sole approver of any new Tenants for the Property, provided that, however, if Owner refuses any of the Tenants identified by Property Manager when a Property is vacant, for any reason whatsoever regardless of any restrictions, pre-screening obligations, or other limitation selection set forth in this Agreement, the Rent Guarantee shall terminate immediately.
(c) Property Manager shall have the right to set, at its sole discretion, the listing rental price and rental minimal durations for each of the Properties that have been vacated and that are subject to this Section 5.4. Specifically, Property Manager may set the listing rental price for such Properties at a price up to ten percent (10%) less than what was paid by the immediately prior tenant, provided that Property Manager shall not be obligated to pay such difference to Owner. Also, Property Manager may set the rental minimal duration for shorter durations than the ones specified by Owner in this Agreement or otherwise, provided that such duration must terminate at the end of the then-current Initial Term or Extended Term.
(d) This Section 5.4 and the Rent Guarantee shall not be applicable, at Property Manager’s sole discretion:
(i) When specifically agreed to in writing by the parties;
(ii) When the vacancy of any of the Properties results, directly or indirectly, from the Owner’s breach of this Agreement, or from any communication between the Owner and current, prospective, or new Tenant provided that, however, Owner agrees that all communications with any current, prospective, or new Tenants shall be conducted solely through Property Manager;
(iii) When any of the Properties’ Lease Agreements are terminated or full Rent is not paid because of the death of any Tenants, or because of any crimes or illegal activities perpetrated on the Property in question, or by statutory or administrative right, law or order allowing a Tenant to cancel such as age, pandemic, illness, infirmity, domestic abuse;
(iv) When a Force Majeure Event (defined above), or governmental or other decree reasonably prevents Property Manager from evicting a current Tenant, and/or finding a new Tenant for any of the Properties, or from collecting rents on time or collecting rent at all, then for the later of 90 days after the Force Majeure is declared ended, or 90 days after the governmental order, decree, or law is removed or lifted,
(v) When the Real Estate ITFs or other major market indexes (e.g. Dow Jones, S&P, NYSE, NASDAQ) decreases for twenty percent (20%) or more, at any period within a running forty-five (45) day period during the Term, and then for the later of 90 days after the Force Majeure is declared ended, or 90 days after the governmental order, decree, or law is removed or lifted,
(vi) When any of the Properties are sold or, if earlier, on the date in which the Building is advertised for sale, provided that the Rent Guarantee shall not apply only to the Property that is sold or advertised for sale; or
(vii) When applicable Federal or State laws or orders either (x) prevent or delay the eviction of a Tenant, or (y) limit Property Manager’s ability to reclaim any of the Properties following such Properties’ Tenants’ delinquency under the applicable Lease Agreements.
(e) Disclosure regarding Rent Guarantee and Security Deposit Requirements. In further consideration of the Rent Guarantee set forth herein, and to otherwise decrease the time of vacancy of any Property to the mutual benefit of the Owner and Property Manager, the Property Manager shall be entitled in its sole and absolute discretion to determine the Tenant’s obligations regarding a Security Deposit, including without limitation, the amount of the Security Deposit, the timing of the payment of a Security Deposit, and/or not requiring a Tenant to provide a Security Deposit at all, but instead to pay increased rent, to which the Property Manager shall be entitled to any excess payment made in furtherance thereof and which shall not otherwise impact the Rent Guarantee. In cases where a Security Deposit is not required, Property Manager’s decision shall neither reduce nor waive the Tenant’s obligations to pay for any damages resulting from any breach of the Lease by the Tenant, nor shall it otherwise impair the Property Manager’s obligations under this Agreement, including without limitation, according to the Rent Guarantee herein and Property Manager’s payment and repair obligations upon a Tenant vacating the Property. However, regardless of if a Tenant places or does not place a Security Deposit the Maximum Program Amount shall remain as set forth in Section 1.3 above. If this Agreement is terminated for any reason, Owner may, in its sole discretion, give written demand to Tenant to place the full Security Deposit as negotiated by the Lease.
(f) Other Charges May Be Assessed to Tenant and Retained by Property Manager. From time to time in Property Manager’s sole discretion, it may charge Tenant for optional services or products (e.g. Internet access, security monitoring, appliance reporting and remote access, “smart home” features, and others as technology and Tenants’ requests develop over time. Property Manager may include charges for such services or products in the Lease as part of Rent or Additional Rent, or separately in an agreement with Tenant, and may brand same under Property Manager’s name or a different name altogether. In all such instances, Owner grants Property Manager or its Affiliate, in their sole discretion, the right to offer, provide and charge for such services and products as they see fit. No portion of any amount collected by Property Manager shall belong to Owner, and all such amounts shall belong solely to Property Manager and/or its Affiliate, and specifically, no amount collected under this paragraph by Property Manager or its Affiliate shall alter or increase the Rent Guarantee amount agreed to by the Parties.
ARTICLE 6 – STANDARD FEES AND CHARGES
6.1 OneRate Fees. As compensation for the OneRate Services rendered by Property Manager under this Agreement, Owner shall pay Property Manager for each Property a flat monthly fee and a deductible, as indicated in the Signature Page or the Adjustment Notice (the “OneRate Fees” or “Subscription Fees”), provided that, however, Property Manager may modify from time to time the OneRate Fees in its sole and absolute discretion by notifying the Owner at least thirty (30) days in advance, including as provided in Section 5.2 (c). Specifically:
(a) Owner shall pay the OneRate Fees monthly, for the whole duration of the Term, starting from the Effective Date as defined above, and as indicated on the Signature Page. If the Agreement is renewed, then Owner shall continue to pay the OneRate Fees monthly for the whole duration of the Extended Term. If the Program is terminated before the natural expiration of the Initial Term or the Extended Term, then Property Manager shall owe Owner nothing other than any amount set forth in Article 2;
(b) Owner understands and agrees that all OneRate Fees are not refundable unless otherwise specified by this Agreement;
(c) Owner hereby authorizes Property Manager to deduct the OneRate Fees and any other amount owed to it by Owner from any rent or any other amount received or due to Owner from any Property within the Program and not just the Property from which said amount is owed.
6.2 Other Fees. As compensation for Services provided by Property Manager to Owner, including services not defined as OneRate Services, Owner shall pay Property Manager as follows, per each Property:
(a) Expenses. Except as expressly included as part of the OneRate Services, Owner shall pay to Property Manager all of the expenses in connection with each Property under this Agreement, and with all Services;
(b) Extraordinary Services. Owner shall pay Property Manager a sum equal to Thirty Dollars ($30) per hour for all necessary or requested tasks to be performed by Property Manager which are not expressly included in the OneRate Services;
(c) Other Services. Owner shall pay Property Manager as agreed to by the parties in writing from time to time to perform services other than the ones expressly contemplated by this Agreement;
ARTICLE 7 – COLLECTION AND DISBURSEMENT OF RENTS AND OTHER SUMS
7.1 Collection of Rents and Other Sums.
(a) Collected Amounts. Property Manager shall collect all rents, charges, and other amounts receivable on Owner’s account in connection with the management and operation of each Property (the “Collected Amounts”). Such Collected Amounts shall be deposited by the Property Manager in the Trust Account according to Section 7.5, except for Security Deposits or other Deposits, which shall be deposited by Property Manager into the Deposit Trust Account according to Section 7.9.
(b) Administrative Fees. To the extent permitted by applicable law, Property Manager may collect from an actual or prospective Tenant all administrative fees concerning Lease Agreements related to a Property, including but not limited to: administrative charges for late payments of rent or other sums due under Lease Agreements, late fees, administrative charges for returned or non-negotiated checks, interest related to late payments, rental application fees, and any other administrative fees as implemented by Property Manager from time to time in its sole discretion (collectively, the “Administrative Fees”). Any Administrative Fees shall be retained by, and be the sole and exclusive property of, the Property Manager.
7.2 Disbursement of Rents and Other Sums.
(a) Operating Expenses and Fees. Property Manager is authorized to pay for all expenses and costs related to operating each Property, together with all fees and charges due to Property Manager under this Agreement, including the ones specified in Article 6, directly from the Trust Account as they become due and payable.
(b) Debt Payments. Owner authorizes Property Manager to make monthly or recurring payments related to any Property, utilizing the monies at that time present in the Trust Account (the “Debt Payments”), unless and until Owner provides a written notice revoking such authority, which shall to be made at least thirty (30) days in advance After receipt of such notice, Property Manager may choose to terminate this Agreement, without penalty of liability, for that Property or for all Properties. Property Manager shall have the authority to modify the amount required for the Reserve as provided by this Section 7.6 in its sole discretion. For the purposes of this section, the Debt Payments could include, without limitation: mortgage payments, general property taxes, special property assessment, home warranty, or insurance premiums.
(c) Retention of Sums for Future Repairs and Bills. Property Manager, in its sole and absolute discretion, may hold sums from the Collected Amounts deposited by Property Manager in the Trust Account to pay for authorized in process repairs and any authorized bills to be made on the Properties which are to be paid by the Owner per the terms of this Agreement (“Held Sums”).
(d) Disbursements to Owner of Net Proceeds. To the extent that funds are available in the Trust Account after maintaining the Reserve according to Section 7.6, Property Manager shall transmit the Net Proceeds (as defined below) to Owner as it directs in writing from time to time. For the purposes of this Agreement, “Net Proceeds” shall be defined as all amounts deposited in the Trust Account minus all costs, expenses, and fees due and payable by Owner under this Agreement, including any Held Sums.
(e) Deposits Disbursement. Any Security Deposits and other refundable Deposits as defined in the Lease deposited into the Deposit Trust Account shall be disbursed by Property Manager in accordance with the provisions of Nev. Rev. Stat. 118A.242 and 118A.244. To alleviate doubt, the higher rent as identified in Section 5.4 above shall not be considered for any purpose to be part of or credited toward the Security Deposit.
(a) Owner understands that it is solely responsible to file all appropriate Internal Revenue Service (“IRS”) forms and meet all IRS requirements, including accounting for each property and filing all federal state and local taxes or assessments due.
(b) Before Property Manager can disburse any sums to Owner, Owner agrees to provide to Property Manager all legal details and documents necessary to comply with tax laws and regulations, including (i) Driver License and Social Security Number; (ii) complete W-9 form or W-8 Ben form; and, (iii) certification issued by the Owner’s bank institute confirming that the Owner is the legal owner of the bank account provided to Property Manager for disbursement of the Net Proceeds, to be provided every time Owner requests to change the bank account where to receive the Net Proceeds. Property Manager will hold in Trust Account all sums, and will not disburse any Net Proceeds to Owner absent the documents required by this Section 7.4(b).
(c) Pursuant to the Internal Revenue Code 44, Section 1141 (the “Foreign Investments In Real Property Tax Act” or “FIRPTA”), the deduction of a withholding tax on all fixed or determinable gross income shall be required for any non-resident alien individual, fiduciary, foreign partnership or foreign corporation unless exempt under provisions provided thereunder. If Owner is a non-resident alien individual, fiduciary, foreign partnership, or foreign corporation, Property Manager will require a written statement pursuant to FIRPTA. Owner hereby declares that he is not a non-resident alien individual, fiduciary, foreign partnership, or foreign corporation.
(d) Property Manager shall, on a mutually acceptable schedule, furnish Owner with: (i) monthly statements of cash receipts and disbursements from the management of the Property; and (ii) any other reports as agreed by both parties. Property Manager will submit all appropriate forms as required to the IRS at the conclusion of each calendar year.
7.4 Trust Account. Property Manager shall establish and maintain a separate trust account, apart from any company or corporate account, for the deposit of payments collected on behalf of the Owner and concerning each Property (the “Trust Account”). Property Manager shall establish such Trust Account at financial institution selected in its sole discretion, provided that the deposits are insured by the federal government. Any interest accrued on the Trust Account shall be the exclusive property of the Property Manager. Any funds collected on behalf of the Owner for the Property and deposited into the Trust Account by the Property Manager shall be disbursed in accordance with the terms of this Article 7, subject to the Property Manager’s retention of any fees or expenses to it owed by Owner pursuant to this Agreement, including Article 6.
7.5 Reserve. Immediately upon the commencement of this Agreement, Owner shall remit to the Property Manager a reserve equal to Two Hundred Dollars ($200) per Property to be deposited in the Trust Account (the “Reserve”). The Reserve shall be used by Property Manager to pay sums owed by Owner under this Agreement as they become due from time to time, and at all times Owner shall maintain the Reserve for each Property under this Agreement. Property Manager shall notify Owner if additional funds are required, and Owner shall remit such funds immediately.
7.6 Remittance of Funds. If the balance of the Trust Account is at any time insufficient to pay any sums due and payable by Owner under this Agreement, Owner shall remit to the Property Manager sufficient funds to cover the deficiency and restore the Reserve no later than ten (10) days from the Property Manager’s written notice.
7.7 No Advance of Funds. In order to continue to participate in the OneRate Program, Owner agrees that its balance in the Trust Account shall remain positive at all times with a minimum reserve of $250. If at any time the balance becomes negative, Property Manager’s system will make a written and formal contribution request, and until this additional cash contribution is made, no bills will be paid, and no new repair and maintenance work will be authorized, undertaken or approved on the Properties. Notwithstanding the above, if Property Manager decides in its sole discretion that despite the Owner’s negative balance certain expenses are urgent/important to make (e.g. to avoid liens, litigation, safety issue or any law or regulation), Property Manager may, but is not obligated to contribute the negative balance or cover such expense, and will notify the Owner in writing of such a contribution. This contribution will be considered as Unpaid Sum and if not reimbursed in full by Owner , will bear 10% interest commencing on the eight (8th) calendar days after such a contribution. However, all of the above notwithstanding, in no event shall Property Manager be required to use its own funds to pay sums owed by Owner under this Agreement, nor shall Property Manager be required to advance any monies to Owner or to the Trust Account.
7.8 Deposits Trust Account. Property Manager shall establish and maintain a separate trust account, apart from any company or corporate account and apart from the Trust Account, for the deposit of security deposits and other refundable deposits, if any, collected on behalf of the Owner and concerning each Property (the “Deposit Trust Account”). To alleviate doubt, the higher rent collected by Property manager if a Tenant chooses not to place a Security Deposit, shall not be a part of or credited to the Security Deposit, and will not be deposited in the Deposit Trust Account. Any interest accrued on the Deposit Trust Account shall be the exclusive property of the Property Manager.
Collection Fees and Interest on Unpaid Sums. All sums due under this Agreement and not paid by Owner to Property Manager when due (the “Outstanding Sums”), shall bear interest at the rate of ten percent (10%) per annum. Owner shall also pay to Property Manager, in addition to all the amounts due and payable under this Agreement and interest, all reasonable costs and attorney’s fees incurred by Property Manager in connection with collecting such sums.
ARTICLE 8 – CONFIDENTIALITY
During the Term of this Agreement, and at all times thereafter, the Owner shall not release or otherwise disseminate or publicize any information, terms and/or conditions of this Agreement or as it relates to the Property Manager’s business and business strategies. All such information shall be held by the Owner in strict confidence. Neither party shall make any public announcement concerning this Agreement, any performance hereunder, or any other comment, one party about the other, without the advance approval, in writing, of the non-publishing party, provided that, however, a party may still issue a press release without the consent of the other if such press release is necessary to comply with applicable laws. The provisions of this Article 8 shall survive the termination of this Agreement.
ARTICLE 9 – ASSIGNMENT
9.1 Assignment. Neither party may transfer or assign this Agreement, in whole or in part, without the prior written consent of the other party, not to be unreasonably withheld. Notwithstanding the foregoing, Property Manager may assign or transfer this Agreement in its entirety, without the Owner’s consent, in connection with the sale of all or substantially all of its assets or its ownership interests, or a merger, consolidation, recapitalization, reorganization, or other transfer of control. Additionally, a transfer or assignment of this Agreement to Property Manager’s parent company or Affiliate will not be considered an Assignment under this Agreement.
9.2 Successors and Assigns. All references made in this Agreement to rights or obligations of Property Manager shall also be deemed to include permitted successors and assigns of Property Manager as set forth in Section 9.1. All references in this Agreement to rights or obligations of Owner shall also be deemed to include permitted successors and assigns of Owner after a transfer of this Agreement consented to in writing by Property manager per the preceding paragraph.
ARTICLE 10 – RELEASE, INDEMNITY AND INSURANCE
10.1 Release. Property Manager does not assume and shall not have any liability for any action, whether in tort or contract, damages, losses, liabilities, demands, actions, liabilities, fees, suits, causes of action, penalties, recoveries and deficiencies costs and expenses (including, without limitation, reasonable attorneys’ fees) as it relates to any of the Properties, including but not limited to: (i) any act or omission by any of the Properties’ Tenant, including default; (ii) any act or omission by Owner, any previous owner of any of the Properties, any of their previous brokers or representatives, or for damages claimed to be occurred for, in, on, or about any of the Properties; and (iii) any bankruptcy or failure of the depository bank where the Trust Account and Deposit Trust Account were opened. Except as otherwise provided for and/or restricted under Nevada law, including specifically, NRS 645.252, NRS 645.253 and/or NRS 645.254, or where such claims arise from Property Manager’s intentional misconduct and/or gross negligence, Owner acknowledges and agrees that neither Property Manager, its Affiliates or any employee, direct or indirect owner, officers, directors or any agent of the foregoing shall be liable for any liability, loss, cost, damage, expense, tax, premium, assessment, violation, suit, claim or destruction of any nature arising out of this Agreement and/or otherwise relating to the Property.
(a) Owner shall indemnify, defend, and hold harmless Property Manager, its parent, subsidiaries and affiliates, and its and their respective officers, managers, members, directors, agents, employees, representatives, successors and assigns (collectively, “Property Manager’s Indemnitees”), from and against any and all claims, whether in tort or contract, demands, actions, liabilities, fees, suits, causes of action, damages, penalties, recoveries and deficiencies, costs and expenses (including, without limitation, reasonable attorneys’ fees) brought or incurred by a third party against Property Manager as it relates to any of the Properties, or for damages claimed to be occurred for, in, on, or about any of the Properties. Property Manager shall not be responsible to indemnify Owner for such violations.
(b) Owner shall be solely responsible for any and all fines, penalties, or other expenses, (including reasonable attorneys’ fees), as it relates to any of the Properties’ violation or alleged violation of any laws or regulations, including but not limited to environmental protection, labor, fair employment, fair credit reporting, rent control, fair housing, illegal discrimination on the basis of race, sex, color, religion, national origin, physical handicap, familial status, elderliness and/or any other protected class, and/or taxes. Property Manager shall not be responsible to indemnify Owner for such violations and Owner shall pay Property Manager’s reasonable expenses incurred in obtaining any legal advice regarding any compliance.
10.3 Notice of Claim. Promptly after receipt by Property Manager or Property Manager’s Indemnitees of written notice of the commencement of any such claim, demand, action, suit or proceeding (each an “Action”) which is the subject of Owner’s indemnification obligations hereunder, Property Manager or Property Manager’s Indemnitee shall notify the Owner of same, in writing. Any failure to provide such written notice shall only relieve the Owner of its indemnification obligations hereunder to the extent it has been materially prejudiced by such failure. Owner shall have the right to select and retain attorneys (reasonably acceptable to Property Manager or Property Manager’s Indemnitee) to assert or negotiate, and the right to control, the defense and any settlement of the Action, to the extent of the Owner’s corresponding indemnification and defense obligations, except that under no circumstances shall the Owner enter into any settlement that involves an admission of liability, negligence or other culpability by the Property Manager or the Property Manager’s Indemnitee, or that requires the Property Manager to contribute to the settlement. Without limiting the Owner’s foregoing right to select and retain attorneys and to have sole control of the defense and settlement of such Action, Property Manager or Property Manager’s Indemnitees may, at their own expense, participate in the defense of, or otherwise consult with counsel of its own choice in connection with, an Action that is the subject of the Owner’s indemnification and defense obligations.
(a) Owner’s Insurance. Throughout the Term of this Agreement, Owner shall carry and maintain insurance which shall be primary and cover all risks and liabilities associated with the Property, including but not limited to loss, damage, and injury to property or persons which may arise out of the occupancy, management, operation, or maintenance for all the Properties, fire insurance, and vandalism (the “Policies”) and with limits of liability equal to at least Five Hundred Thousand Dollars ($500,000.00) per occurrence, and One Million Dollars ($1,000,000.00) in the aggregate per year, with any deductible required under the Policies being the exclusive responsibility of the Owner. Additionally, Owner shall name Property Manager as additional insured on the Policies, and for any applicable bond or service warranty agreement, and each shall provide that written notice of default, changes, or cancellation of such policy, bond or service warranty shall be sent also to Property Manager at least thirty (30) days before such default, change, or cancellation takes effect. Owner agrees to provide Property Manager within fifteen (15) days from the execution of this Agreement, a copy of the Policies, applicable bond and/or service warranty. Owner further agrees to provide further certificates regarding the Policies upon written request by Property Manager from time to time.
(b) Tenant’s Insurance. The Lease shall require each of the Properties’ Tenants, on behalf of Owner, to carry and maintain Tenant’s insurance compliant with Nevada law.
10.5 The provisions in this Article 10 shall survive any termination of this Agreement.
ARTICLE 11 – REPRESENTATIONS, WARRANTIES, AND LIABILITY
11.1 Owner. Owner represents and warrants the following:
(a) Owner has full power and authority to enter into this Agreement for each of the Properties;
(b) There are no written or oral agreements affecting any of the Properties other than the agreements that have been disclosed, of which a copy has already been provided to the Property Manager;
(c) There are no recorded easements, restrictions, reservations, or rights of way which adversely affects the use of any of the Properties for the purposes intended under this Agreement;
(d) There is no claim, demand, action, suit or proceeding or investigation pending or currently threatened against Owner or any of its representatives involving or relating to any of the Properties, or which, if adversely determined, would restrict the Owner’s rights to enter into this Agreement carrying out its obligations under this Agreement;
(e) All Properties comply with all applicable laws, statutes, regulations, Common Interest Communities regulations, and/or judicial orders, including permits for each of the Properties’ operation, and they are zoned for the intended use;
(f) Owner, together with all its agents or representatives, will not use the OneRate Program, or any other service or program obtained by Property Manager under this Agreement, for any use or reason other than its intended use, and in good faith;
(g) ALL LOANS, NOTES, MORTGAGES, TAXES, DUES, UTILITIES, OR TRUST DEEDS REGARDING THE PROPERTIES ARE PAID AND ARE CURRENT WITHOUT DEFAULTS, and any future default on any of the above will be reported to the Property Manager in writing within fourteen (14) business days from the Owner’s receipt of the Notice of Default which commences foreclosure proceedings;
(h) NO LIENS OF ANY TYPE, INCLUDING HOA LIENS OR OTHER SUPER PRIORITY LIENS, HAVE BEEN RECORDED AGAINST ANY OF THE PROPERTIES, and Owner further acknowledges that offering any property for lease while subject to foreclosure proceedings without a written disclosure is a deceptive trade practice punishable by both civil fines and criminal proceedings.
11.2 Property Manager.
(a) Property Manager will deliver, or cause to deliver, the Services pursuant to this Agreement in a professional manner and will use reasonable commercial efforts to complete its obligations pursuant to this Agreement.
(b) Property Manager shall deliver the Services on an “as is” and “as available” basis, without warranties of any kind, whether express or implied, including without limitation those arising by statute, from a course of dealing, or from a use of trade.
(c) No advice or information, whether oral or written, given to Owner by Property Manager, shall give rise to any warranty of any kind, nor shall it be considered legal, accounting tax or professional advice of any nature. Owner agrees separately to retain and pay for professionals of its choice for such advice and shall rely on them, not Property Manager for same.
11.3 Limitation of Liability.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, EXPECTANCY, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOSS OF DATA, LOSS OF GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE, SYSTEM FAILURE, BODILY INJURIES, EMOTIONAL DISTRESS, OR OTHER THEORIES OF LAW ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT, WHETHER BASED ON TORT OR CONTRACT. By way of example, other than as may be mandated by Delaware law, Property Manager shall not be responsible for any damages resulting from failure to respond to a Service Request or for failure to resolve a Service Request.
(b) THE MAXIMUM AGGREGATE LIABILITY OF PROPERTY MANAGER OR ITS REPRESENTATIVES ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT SHALL NOT, IN ANY CASE AND FOR ANY REASON, EXCEED THE AMOUNT PAID BY OWNER TO PROPERTY MANAGER UNDER THIS AGREEMENT.
ARTICLE 12 – MISCELLANEOUS
12.1 Entire Agreement; Amendment; Waiver. This Agreement expresses the entire understanding concerning the subject matter hereof and supersedes and terminates any prior oral or written agreements between the parties with respect to the subject matter hereof. Any provision of this Agreement may be amended, and observance of any term of this Agreement may be waived, only with the written consent of the parties hereto. Waiver of any terms or conditions of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or a waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of Agreement.
12.2 Prior Dealings. No previous course of dealing or performance or usage of trade not specifically set forth in this Agreement shall be admissible to explain, modify or contradict this Agreement.
12.3 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.
12.4 Signature Page. The Signature Page attached herein is hereby made a part of this Agreement.
12.5 Construction. The parties acknowledge that each of them has reviewed this Agreement and has had the opportunity to have it reviewed by their respective attorney(s), whether or not taken, and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation or enforcement of this Agreement. The terms of this Agreement shall be construed as a whole according to their fair meaning and not strictly for or against any party.
12.6 Headings; Use of Gender and Number. The paragraph headings in this Agreement are inserted for purposes of convenience only and shall not define, limit, or describe the scope or intent of this Agreement, nor in any way affect this Agreement. Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place(s) in this Agreement in which the context requires such substitution(s).
12.7 Application of Delaware Law; Exclusive Jurisdiction. Owner is not located in Nevada where the Properties are located. Property Manager is a Nevada corporation. Thus, as a negotiated for compromise, the law of neither Party’s home state will be applied, unless expressly stated herein. Rather, this Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware applicable to agreements made and to be performed entirely within that state, to the exclusion of all others. The Parties agree that any action brought by either party under or concerning this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the exclusive jurisdiction and venue of, any state or federal court located in Clark County, Nevada.
12.8 Attorneys’ Fees. Should either party retain counsel to enforce or prevent the breach of any provision of this Agreement, including instituting any action or proceeding to enforce any provision of this Agreement, for damages because of any alleged breach of any provision of this Agreement, for a declaration of such party’s rights or obligations under this Agreement, or any other judicial remedy available hereunder, then, if the matter is submitted for judicial determination or arbitration, the prevailing party (whether at trial, on appeal, or arbitration) shall be entitled, in addition to such other relief as may be granted, to be reimbursed by the losing party for all costs and expenses incurred, including reasonable attorneys’ fees and costs for services rendered. Additionally, Owner shall pay Property Manager any reasonable expense incurred by Property Manager in obtaining legal advice regarding compliance with any laws and regulations affecting a Property. If such expenditure also benefits other clients of Property Manager, then Owner shall pay its apportioned amount as determined by Property Manager in its sole discretion.
12.9 Mandatory Negotiation and Mediation. Any dispute arising out of or relating to this Agreement, including any alleged breach, termination, validity, interpretation, or performance thereof (each a “Dispute”) shall be resolved as follows:
- (a) Upon written notice of a Dispute, the parties shall attempt to resolve it promptly by a good faith negotiation between them (the “Negotiation”). The parties agree that engaging in Negotiation shall not be deemed to waive, prejudice, or compromise, any of their legal or factual positions concerning the Dispute. (b) If the Negotiation is not completed within thirty (30) days from the written notice, provided, however, the right of the parties to agree in writing to a different timeframe, then the parties agree that before commencing any legal action through a formal court of law, they shall proceed with mediation in Las Vegas Nevada, through with a mutually agreeable mediator> If the parties are not able to agree to a mediator within thirty (30) days, then mediation shall take place through Alternative Dispute Resolution in Las Vegas, and if that service is no longer in business, then through JAMS, and if that is not in business than as appointed by a court of competent jurisdiction.
12.10 Waiver of Jury Trial. OWNER AND PROPERTY MANAGER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. EACH PARTY REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY GIVEN.
12.11 Waiver of Class Action or Representative Action. OWNER AND PROPERTY MANAGER WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES AGREE THAT (I) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS’ FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (II) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.
12.12 ARBITRATION OF DISPUTES. If for any reason negotiation and/or mediation is unsuccessful per Section 12.9 above, the parties agree to submit all disputes to binding arbitration, to be conducted Alternative Dispute Resolutions (“ADR”), in accordance with its then published rules, including if any, for real estate brokerage disputes, and failing that, for commercial disputes. ADR will have sole jurisdiction over any dispute between the Parties to this Agreement including determining the scope of the arbitrator’s authority. Each party will equally bear the arbitration costs; however, the arbitrator shall award the prevailing party in the arbitration all arbitration costs, and attorney’s fees as set forth above.
The parties specifically agree to all of the following:
Arbitration is final and binding on the Parties;
The Parties are waiving their right to seek remedies in court, including the right to a jury trial;
Pre-arbitration discovery is generally more limited than and different from court proceedings; and
The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or seek a modification of rulings by the arbitrators is strictly limited by law.
12.13 Signature Page and Counterparts. The execution by the parties of the Signature Page attached hereto, which terms, conditions, and definitions shall be incorporated by this reference herein, shall be equal to the execution of this Agreement. This Agreement and/or the Signature Page may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument; the counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.