Property Management
A Kentucky property management company charges a vacancy fee equal to one month's rent when a unit is vacant. This type of fee is:
AStandard practice and always permitted
BPermissible only if disclosed and agreed to in the management agreement✓ Correct
CProhibited under Kentucky property management law
DRequired only for units vacant more than 90 days
Explanation
A property management company may charge various fees including vacancy fees, but all fees must be clearly disclosed and agreed to by the property owner in the management agreement. Undisclosed fees or fees not provided for in the agreement could constitute a breach of fiduciary duty.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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