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Denver Property Management - Bank Reconciliations

Scott Lukes - Sunday, May 28, 2017
Professional property managers have very strict legal requirements regarding how they handle incoming and outgoing monies that belong to the tenant or the owner. There are also strict, but seldom followed requirements regarding bank reconciliations. While many property managers conduct monthly bank reconciliations (which reconcile their property management software general ledger balances with the final monthly bank statements), very few are conducting the necessary 3-way tie-over, which reconciles the bank statements and property management software WITH the individual owner and renter account ledgers.

In professional property management, there should be 3 bank accounts: 1) security deposit escrow, 2) rent escrow and 3) corporate operations. The third account, corporate operations, is where the company pays its operations bills, and receives any fee income derived from managing properties. There is no legal requirement to reconcile this account, as it has no bearing on tenants or owners. The security deposit and rental escrow accounts are very different. Monies going into these accounts do not belong to the property management company, which is why the accounts are established as escrow (or trust) accounts. It is critical that the property manager understands where every penny in these accounts is… on a tenant-by-tenant, and owner-by-owner basis, at any given point in time. This is a difficult task.

What many property managers do is reconcile the bank statements for the escrow accounts with the overall account ledger balance in their property management software (e.g. Yardi, TenantPro, AppFolio, Property Boss). However, what it required by law is a three-way reconciliation (or three-way tie over) between the bank statement, property management software and also the tenant and owner ledgers. Each month those ledgers need to balance to zero. This is mandatory to ensure there is no co-mingling of funds between owners and renters, and that all monies are appropriately accounted for.

As a property owner, when seeking out a professional property manger be sure to investigate how they keep their books reconciled each month.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver Property Management - Denver Property Management Utilities

Scott Lukes - Friday, May 19, 2017
As the rental market continues to thrive and home sales stay sluggish many homeowners are deciding to rent their homes until housing prices increase again. There is a long check list of items to consider when transition a personal residence into a rental. This report will be focusing on how to change the responsibility of the utilities from the homeowner to the new tenant in the context of Excel Energy.

The Landlord Agreement (LLA)
The first step in transitioning the utility bill is to include it in the Landlord Agreement. Utilities companies sometimes call this an LLA. The Landlord Agreement Team is an organization within the utility company that specifically handles this process. The Landlord Agreement provides a certain level of protection for the landlord with the key distinction of determining who the client is. Is it the homeowner or the new tenant? In this case the new tenant becomes the utility company’s client. As a result, any issue surrounding the utility bill, is exclusively between the company and the tenant. The landlord will have no visibility into any matter.

The Turn On, Turn Off Form
One of the provisions in the Landlord Agreement protecting the landlord is called “automatic turn on” and “automatic turn of.” So when a tenant moves in the landlord submits the turn on form and the utility bills goes out of the landlord’s name and into the tenants and vice versa when the tenant moves out. Another component of the turn on and turn off agreements is to be sure to have a 3rd party notification clause so if the tenant is not paying the utility bill, the landlord is notified monthly including the amount owed.

A good lease agreement will have language stating that the tenant is responsible for not only paying the rent but the utilities as well. This further protects the landlord from any financial exposure with regards to the utility expenses.

First Mover Advantage
Both the landlord and tenant have to fill out, sign and date the automatic turn on form. The party that first notifies the utility company as to what date the utilities are to be transferred; that date will be on the record. If the landlord believes, for example March 15th is the date of transfer but the tenant notifies first that the date is April 1 it’s that date that will be recognized. Any discrepancies of dates will have to be resolved between the landlord and tenant. The utility company will only recognize the date submitted first.

The Turn Off
When the tenant decides to move out the turn off form is completed with the turn off date. Both tenant and landlord sign and send to the utility company. If the tenant decides to move out a few days prior to that date they are still responsible for the utility expense up to the date on the form.

Another Way the Landlord is Protected
Sometimes a tenant might get way behind in paying the utility bill or in one particular winter month the bill spikes to several hundred dollars. They don’t have the money and decide to change the name on the bill to another family member, boyfriend / girlfriend….or maybe, back in the name of the landlord! By the basis of the Landlord Agreement and the Turn Off / Turn On Agreement the tenant cannot do this, hence, the importance of having the Landlord Agreement in place to protect the landlord. The Tenant is not allowed to change who is responsible for the bill unless both parties agree.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Echo Summit Property Management COO Kim Helton Quoted in Denverite.com

Scott Lukes - Wednesday, May 17, 2017

GREENWOOD VILLAGE, Colorado, March 10, 2017 – Echo Summit Property Management, a leading Denver and Ft. Collins-based Property Manager, has been quoted in a recent article in popular Denver news site Denverite.com.

In the article “Denver landlords describe eviction from their perspectives — and suggest how to avoid it,” Kim Helton, Echo Summit’s Chief Operating Officer, discusses impact of evictions, and how to best deal with them when they happen.

One of Ms. Helton’s quotes from the article: “Payment plans. I don’t know how often other companies do them or how they do them, but I find it simpler to save a resident than to evict a resident. There are some people who will lie to you — their mother has been in the hospital 20 times or has been killed 20 times — you know they’re playing games with you. .. I think to solve the eviction problem, you ought to work out more agreements without having someone default. If I can help the renter reestablish themselves, it’s a win-win situation, I don’t have to remarket the home and they stay.”

About Echo Summit Property Management

With nearly 1,000 properties managed, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local investors and Realtors who understand that there can be no compromise in quality and ethics in property management. Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one. ALL WE DO IS PROPERTY MANAGEMENT. We do not do real estate brokerage, real estate development, or sell cars. We are property managers who strive for nothing short of excellence. Our dedication and approach has earned Echo a quality reputation in Denver area rentals.

Essential Denver Property Management - Craigslist Scams

Scott Lukes - Wednesday, May 10, 2017
The number of fake rental scams on Craigslist and other online classifieds continues to grow, with new aliases appearing daily. But while the names may change, the methods are always the same. These thieves, mainly based in Nigeria, the U.K. and the U.S., are out to steal renter’s money and identity.

There are several items to look out for:
1) The scammers tend to use yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses.
2) They use photos stolen from other property advertisements and many times copy the legitimate ad with same description and photos.
3) Look for the misspelling of words and more formal language that isn’t commonly used in such online advertising. The emails will be overly polite and poorly written or express excessive eagerness to rent the property without having proper steps including property inspection, background and credit checks.
4) When there are two identical ads the monthly rental fee will be much different. For instance a legitimate ad for a 4 bedroom house would be, say $1,350 per month. The scam ad will list the same property, same pictures and assume the homeowner’s identity but list it for $850. If it’s too good to be true it probably is. They will have a sob story or say they are not available to show the property but the renter can go and check it out if they wish.
5) What they all have in common is that sooner or later they send request to transfer funds via Western Union, Money gram or some other wire service. Never, under any circumstances wire money at the request of the prospective “landlord” and never provide a bank account number, bank routing number or other financial or personal information.

A renter should ALWAYS do business face-to-face with the landlord or property management company. It’s important to have access inside the property and to sign documents and contracts in person and in an office or professional setting.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver Property Management - Normal Wear and Tear

Scott Lukes - Monday, May 01, 2017

Normal wear and tear is a very important topic because it’s where landlords and property managers often run into difficulties when over-charging when conducting a security deposit disposition.

The tenant moves out of the house and the carpet is heavily worn. The landlord wants to withhold some of the security deposit to repair or replace the carpet. The landlord has to ask some questions before they withhold some or all of the security deposit.

  • How old is the carpet?
  • How long have the tenants been living there?
  • Is the damage above and beyond normal wear and tear for a typical renter in their same situation (e.g. family of 4 living there for 3 years)
  • Do we have photo or video documentation of what the carpet looked like BEFORE the tenant moved in?
  • Was there a pre-move-in inspection sheet returned to us?

If the carpet is more than 3 years old, the landlord has to be very careful because, in the state of Colorado, the average useful life of carpet (or paint for that mater) in a non-owner occupied property is typically 3 years. Does that mean if the carpet is 5 years old, and if the landlord has documentation showing the carpet was in great condition before the tenet moved in, then one little section was completely destroyed during their stay – that they can not withhold deposit? No, they can absolutely withhold for that. They just have to be careful when we are dealing with carpets that are entering the end of their useful life.

Mildewed bathroom, very unclean kitchen. Here is another situation where the landlord might want to withhold security deposit to scrub the tile and maybe even re-grout because it’s so badly worn. Can they do this? Again, if this is a situation where a family of four had lived there and the tub area was already starting to get mildewed. When they move out the judge would ask ‘what would that tub look like after normal use by a family of four who had lived in the home for X period of time.’ The landlord will have to ask themselves this question because this will be what’s going to be defensible in court. The most important thing you’ll need to do is have documentation of what the area looked like before the tenant moved in. If you do NOT have before pictures or video, be very careful about withholding security deposit.

Holes in the wall. This is a very common issue – because people like to hang things on walls; from pictures and mirrors, to flat screen TVs. In this case, the landlord checks a tenant out and find quite a different size few holes in the walls. What can they withhold for? Our first recommendation is having lease verbiage that defines what is allowed, and what is not. For instance: “…tenant cannot make alterations to wall surfaces without prior written approval from the landlord, aside from small nail holes used to hang pictures.” If the landlord does not have clear language in the lease agreement a judge could easily rule against them and say the big anchor bolts in the wall are in fact normal wear and tear because most televisions available today are flat screen and require wall mounting. Another good idea is to simply ask the tenant to leave all nails in the walls so it will be easier for the landlord to go back and clean up the areas versus the tenant trying to fix t walls and making it even worse. This could require the landlord to come back and have to retexture and paint the surface and then charge the tenants... which they won’t like.

Scuff marks are another issue that’s common and often misunderstood. Scuff marks can result from a couch, chair or bed head board being close to the wall. The landlord would most likely want to charge the tenant to have the wall re-painted. In general, if the tenants have been living there for a reasonable period of time there, will be normal wear and tear and we would advise against withholding exorbitant security deposit in this case. There will be some cases of excessive dings and dents in which you might have cause to withhold, but you have to be very careful

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Echo Summit Property Management CEO Scott Lukes to Offer “Property Management Trends and Issues” CE Course

Scott Lukes - Wednesday, April 12, 2017

GREENWOOD VILLAGE, Colorado, January 15, 2017 – Echo Summit Property Management, a leading Denver and Ft. Collins-based Property Manager, is proud to announce that it will once again offer the popular “Property Management Trends and Issues” continuing education course, taught by its CEO and founder, Scott Lukes.

The 2 hour continuing education course, approved by the Colorado Division of Real Estate, is also known as the “Red Bull” course, given the presenter offers cans of Red Bull to the attendees given the fast-paced nature of the presentation. The course covers critical aspects of landlording in the Denver and Ft. Collins areas. It is intended for both investors and real estate agents, and covers to following topics:

  • The critical DO’S and DON’Ts in managing properties
  • Dealing with legalization of MARIJUANA
  • Recent area rental STATISTICS
  • Handling lease VIOLATIONS and late rent
  • TENANT SELECTION criteria and posting
  • SECURITY DEPOSIT accounting and disposition
  • HOA docs and relations
  • Important NOTICES: 3-day demand letter, substantial violation, ARE-agreement regarding eviction
  • Recent TRENDS and local Issues

To learn of course dates/times, please contact us at marketing@echo-summit.com, or call 303-768x8255 x213 for details.

About Echo Summit Property Management

With nearly 1,000 properties managed, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local investors and Realtors who understand that there can be no compromise in quality and ethics in property management. Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one. ALL WE DO

Truth in Advertizing

Scott Lukes - Tuesday, April 11, 2017
Advertizing a rental property correctly is incredibly important, as there can be significant financial and criminal penalties involved if done improperly and bad events happen.

A property manager is managing a property for an owner. The owner says they do not know if the basement room is conforming or not, so are unsure whether to list it as an extra bedroom. The property manager, in an attempt to get more rent and rent to unit out quicker, opts to list the basement room as an additional bedroom… not really knowing if it is conforming or not. In this case it is indeed non-conforming.

Now, the neighbor across the street gets grumpy because they see four cars at the house. The neighbor contacts the city to complain, and to come out and inspect the situation. After going through the house the inspector says to the tenant “you can’t have someone living in the basement bedroom.” The tenant says, “but our property manager said we could. Look, our application and lease agreement has all four of us listed. Look at the advertisement. It says it’s a four bedroom house.” The inspector says “I don’t care, I’ll be back in 24 hours and you have to be out of that room or fines will start accruing.”
So the tenants call the property manager, obviously, very upset.

If the property manager is managing the property on a fee-based agreement; meaning the home owner is being charged a monthly fee, then the property manager could be liable in the following ways: 1: they would liable to pay to relocate the tenant, because it was their negligence and 2: they might have to compensate the owner for lost rent until the property is re-leased.

Now – it can even get worse.
Let’s say a fire breaks out in that non-conforming basement room. Even if the property manager has a smoke detector and carbon monoxide detector installed, something terrible happened and someone died as a result of fire. Now, this can easily turn into a civil lawsuit. The property managers fancy E&O insurance, company liability insurance, even their umbrella insurance that separates their personal life from your business; all of these will get thoroughly tested.
This is an area where property management varies greatly from regular real estate, especially in the area of E&O insurance. Landlords must be very careful, and very conservative of how they advertise and lease properties. Do not cut corners in this area.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver Property Management Utilities

Scott Lukes - Sunday, April 02, 2017
As the rental market continues to thrive and home sales stay sluggish many homeowners are deciding to rent their homes until housing prices increase again. There is a long check list of items to consider when transition a personal residence into a rental. This report will be focusing on how to change the responsibility of the utilities from the homeowner to the new tenant in the context of Excel Energy.

The Landlord Agreement (LLA)
The first step in transitioning the utility bill is to include it in the Landlord Agreement. Utilities companies sometimes call this an LLA. The Landlord Agreement Team is an organization within the utility company that specifically handles this process. The Landlord Agreement provides a certain level of protection for the landlord with the key distinction of determining who the client is. Is it the homeowner or the new tenant? In this case the new tenant becomes the utility company’s client. As a result, any issue surrounding the utility bill, is exclusively between the company and the tenant. The landlord will have no visibility into any matter.

The Turn On, Turn Off Form
One of the provisions in the Landlord Agreement protecting the landlord is called “automatic turn on” and “automatic turn of.” So when a tenant moves in the landlord submits the turn on form and the utility bills goes out of the landlord’s name and into the tenants and vice versa when the tenant moves out. Another component of the turn on and turn off agreements is to be sure to have a 3rd party notification clause so if the tenant is not paying the utility bill, the landlord is notified monthly including the amount owed.

A good lease agreement will have language stating that the tenant is responsible for not only paying the rent but the utilities as well. This further protects the landlord from any financial exposure with regards to the utility expenses.

First Mover Advantage
Both the landlord and tenant have to fill out, sign and date the automatic turn on form. The party that first notifies the utility company as to what date the utilities are to be transferred; that date will be on the record. If the landlord believes, for example March 15th is the date of transfer but the tenant notifies first that the date is April 1 it’s that date that will be recognized. Any discrepancies of dates will have to be resolved between the landlord and tenant. The utility company will only recognize the date submitted first.

The Turn Off
When the tenant decides to move out the turn off form is completed with the turn off date. Both tenant and landlord sign and send to the utility company. If the tenant decides to move out a few days prior to that date they are still responsible for the utility expense up to the date on the form.

Another Way the Landlord is Protected
Sometimes a tenant might get way behind in paying the utility bill or in one particular winter month the bill spikes to several hundred dollars. They don’t have the money and decide to change the name on the bill to another family member, boyfriend / girlfriend….or maybe, back in the name of the landlord! By the basis of the Landlord Agreement and the Turn Off / Turn On Agreement the tenant cannot do this, hence, the importance of having the Landlord Agreement in place to protect the landlord. The Tenant is not allowed to change who is responsible for the bill unless both parties agree.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Denver Property Management - Avoiding Craigslist Scams

Web Admin - Thursday, March 23, 2017
The number of fake rental scams on Craigslist and other online classifieds continues to grow, with new aliases appearing daily. But while the names may change, the methods are always the same. These thieves, mainly based in Nigeria, the U.K. and the U.S., are out to steal renter’s money and identity.

There are several items to look out for:
1) The scammers tend to use yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses.
2) They use photos stolen from other property advertisements and many times copy the legitimate ad with same description and photos.
3) Look for the misspelling of words and more formal language that isn’t commonly used in such online advertising. The emails will be overly polite and poorly written or express excessive eagerness to rent the property without having proper steps including property inspection, background and credit checks.
4) When there are two identical ads the monthly rental fee will be much different. For instance a legitimate ad for a 4 bedroom house would be, say $1,350 per month. The scam ad will list the same property, same pictures and assume the homeowner’s identity but list it for $850. If it’s too good to be true it probably is. They will have a sob story or say they are not available to show the property but the renter can go and check it out if they wish.
5) What they all have in common is that sooner or later they send request to transfer funds via Western Union, Money gram or some other wire service. Never, under any circumstances wire money at the request of the prospective “landlord” and never provide a bank account number, bank routing number or other financial or personal information.

A renter should ALWAYS do business face-to-face with the landlord or property management company. It’s important to have access inside the property and to sign documents and contracts in person and in an office or professional setting.

For more information on this and other topics, please visit us online: http://echo-summit.com/education
If you prefer to watch a video on this topic, visit us at: http://echo-summit.com/education/videos

Echo Summit Property Management Volunteers at Denver Rescue Mission

Web Admin - Wednesday, March 15, 2017

GREENWOOD VILLAGE, Colorado, December 20, 2016 – Echo Summit Property Management, a leading Denver and Ft. Collins-based Property Manager, continued its commitment of giving back to the community by volunteering at the Denver Rescue Mission.

The Denver Rescue Mission is a 501(c)3 non-profit organization dedicated to serving the needs of the homeless and needy in the Denver metro area. During the volunteering event, Echo Summit staff and family members cooked and served meals to Denver-area needy.

“I could not be more proud of our staff and their commitment to giving back to the community,” said Echo Summit founder and CEO Scott Lukes. “They already deal in an extreme job environment in Denver and Ft. Collins-based residential property management. To see them carve out their own time to serve the community like this is not only heartwarming, but demonstrates Echo Summit’s commitment to the community.”

About Echo Summit Property Management

With nearly 1,000 properties managed, Echo has the experience, technology, process and scale that sets us apart from the pack. Echo is the preferred choice for local investors and Realtors who understand that there can be no compromise in quality and ethics in property management. Our approach and philosophy are simple... once you start treating an investment property like a -rental-, it will eventually dilapidate into one. ALL WE DO IS PROPERTY MANAGEMENT. We do not do real estate brokerage, real estate development, or sell cars. We are property managers who strive for nothing short of excellence. Our dedication and approach has earned Echo a quality reputation in Denver area rentals.


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