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PROPERTY MANAGEMENT AGREEMENT

OWNER:		SS#
		SS#

MAILING ADDRESS:

RES. PHONE:

BUS.PHONE:

FOR PROPERTY LOCATED AT:

TAX MAP KEY #:

“HAWAII GENERAL EXCISE TAXES MUST BE PAID ON THE GROSS RENTS COLLECTED BY ANY PERSON RENTING REAL PROPERTY IN THE STATE OF HAWAII. A COPY OF THE FIRST PAGE OF THIS AGREEMENT, OR OF FERDERAL INTERNAL REVENUE SERVICE FORM 1099 STATING THE AMOUNT OF RENTS COLLECTED, SHALL BE FILED WITH THE HAWAII DEPARTMENT OF TAXATION.”

 Hawaii revised Statutes, Section 237

RESIDENTIAL PROPERTY MANAGEMENT AGREEMENT 

1.      AGENCY. In consideration of the mutual promises and covenants herein contained, OWNER appoints AGENT, as its exclusive agent to rent and manage on the OWNER’S behalf, the PROPERTY as described above and on page 1 of this agreement, and AGENT accepts this exclusive agency appointment, upon the terms and conditions set forth in this Agreement. OWNER understands that no matter who rents, leses, operates or manages the PROPERTY during the term of the agreement (including OWNER), AGENT is entitled to a fee as provided in this agreement. AGENT has the right to advertise the PROPERTY and place signs thereon. OWNER will assist AGENT in any reasonable way in his efforts to rent, lease, operate and manage the PROPERTY and will give AGENT all information, documents, and keys required and will notify AGENT in writing of all material changes which affect the management of the PROPERTY. OWNER understands that the PROPERTY ill be rented or leased without regard to race, color, sex, religion, handicap, parental (familial) status, marital status, Human Immunodeficiency Virus (HIV) infection, or need for a guide or signal dog or other certified animal of the prospective tenant. OWNER understand that all agreements entered by ACENT on behalf of OWNER shall be binding upon OWNER, notwithstanding termination of this agreement.

2.      AUTHORITY. OWNER acknowledges that he or she has the authority to rent the PROPERTY, to appoint AGENT  to rent and manage the PROPERTY, and to enter into this Agreement on behalf of all OWNERS of title to the PROPERTY.

4. DUTIES OF AGENT.

(a) RENTS and COLLECTIONS. AGENT agrees to furnish the services of its organization for the rental operation and management of the PROPERTY. AGENT shall advertise the availability of the PROPERTY, investigate all references provided by prospective tenants, sign leases and renewals and modify, amend or cancel leases and agreements on OWNER’S behalf. AGENT shall collect all rents and deposits for the PROPERTY. AGENT may accept payments in cash, money order or personal checks, but shall not be liable to the OWNER for the ultimate collection of such personal checks. AGENT may collect directly from tenants, for AGENT’S benefit, any or all of the following: a late-rent administrative charge, a non-negotiable check charge, credit report fee, and sub-leasing charge, and need not account for such charges to OWNER.

(b) DEPOSIT FUNDS. AGENT shall deposit all funds collected for the OWNER in the AGENT’S trust account in a federally insured bank or savings and loan company in Honolulu, designated by the AGENT, and such funds shall be held in trust, and will not be co-mingled with AGENTS funds. AGENT shall not be responsible for any loss resulting from the insolvency of such depository institution.

(c) SECURITY DEPOSITS. AGENT shall collect and hold security deposits in an interest bearing account and said interest shall be for AGENT’S benefit and use to defray misc. expenses associated with said PROPERTY account. Security deposits will be held on the tenant’s behalf, to be used to replace or repair items damaged by tenant, applied toward cleaning of the premises chargeable to the tenant, to any other charges due by the tenant, refunded to the tenant or disbursed to the OWNER, at AGENT’S discretion.

(d) MONTHLY STATEMENTS. AGENT shall send monthly statements of cash receipts and disbursements by the 10^th day of the month following the month being reported to the OWNER(S) at the mailing address provided by OWNER.

(e) DISTRIBUTION OF INCOME. To the extent there are funds available for distribution, AGENT shall deduct from the gross rental proceeds authorized payments, expenses and fees an remit the net proceeds, less any security deposits and credit balances to the following persons in the proportion and at the addresses shown below, on or before the 0^th day of the month following the month of collection.

 (f) INSUFFICIENT FUNDS. AGENT shall not be obligated to make any advance payments or incur any liability for OWNER’S account. AGENT shall not be liable for loss sustained by OWNER by reason of non-payment or late payment of any expense due to insufficient funds in OWNER’S account. In the event disbursements and charges are in excess of the rents or receipts collected by the AGENT, OWNER agrees to pay such deficit within ten days of receipt of billing by AGENT. OWNER also agrees to pay a finance charge of 1 ½% per month for any deficit funds not paid within ten days of billing date.

 (g) NO UNDISCLOSED FEES. AGENT agrees not to collect or charge undisclosed fees, rebates, or discounts. Any volume purchasing or other discounts which are available to AGENT are to benefit OWNER.

 (h) RESIDENTIAL LANDLORD-TENANT CODE. AGENT shall use its best efforts to comply with the provisions of Hawaii’s Landlord Tenant Code concerning the rights, obligations and remedies of Landlords and Tenants. AGENT shall promptly notify OWNER of any complaints, warnings, or summonses relating to such matters.

 (i) INSURANCE. OWNER agrees to provide LIABILITY INSURANCE coverage for the PROPERTY with minimum limits of $300,000. for bodily injury and $25,000. for property damage to others. ALOHA PARADISE REALTY, INC. shall be named as additional insured and shall be furnished with a copy of insurance policies or a certificate of insurance. This policy shall be written as to protect the AGENT in the same manner and to the same extent as OWNER for any error or judgment or for any mistake of fact of law, or for anything which it may do or refrain from doing. The issuing insurance company must be authorized to do business in the State of Hawaii. OWNER also agrees to furnish AGENT with a copy of fire insurance policies or certificate of insurance for the PROPERTY. Information regarding insurance is listed on Schedule A. In the event policies or certificates of insurance are not provided within five working days of the signing of this agreement between the parties, AGENT may obtain the required insurance at the OWNER’S expense or may immediately cancel this Agreement without further notification to OWNER, at AGENT’S discretion.

 (j) LEGAL ACTIONS. AGENT has authority to institute and prosecute actions in the OWNER’S name and at the OWNER’S expense to evict tenants, recover possession of the PROPERTY, to sue tenants for rents and other sums due, and to settle, compromise or dismiss such actions. Any such legal action shall be brought through the attorney designated by OWNER, or if none, through an attorney selected by the AGENT.

 (k) SERVICE CONTRACTS. AGENT shall arrange for all utility service necessary for the property operation and protection of the PROPERTY and any other services as needed and OWNER is to assume cost and responsibility for these services.

 (l) ADDITIONAL SERVICES. Any additional services which OWNER may request that are not listed on “Schedule B”, shall be performed upon mutual agreement by the parties, with additional compensation to AGENT. Additional services include supervision of remodeling, fire restoration, shopping or other items not directly related to the rental operation of the PROPERTY.

 5. AGENTS FEES and EXPENSES.

(a) AGENTS FEES. OWNER agrees to pay AGENT an initial fee for renting the property of ten percent (10%) of the first full month’s gross rental received and a monthly fee thereafter of ten percent (10%) of the monthly gross rental amount from the operation of the PROPERTY during the period of this Agreement.

 (b) LATE FEES & RETURNED CHECK CHARGES. AGENT may retain any late fees, insufficient fund fees or other fees paid by or collected from tenant and imposed as a consequence of tenant’s failure to make timely payment of rent or other required payments. Returned check charges are $25.00 and late fees are normally 10% of the monthly rent.

 (c) AUTHORIZED EXPENDITURES. OWNER authorizes AGENT to pay at OWNER’S expense:

1.  Rental advertising, credit checks, and tenant verification;

2. Cleaning premises, including minor repairs, window washing, carpet cleaning, pest control and other customary services AGENT may consider necessary to maintain high standards;

3. Repairs and replacements, as AGENT may consider necessary or advisable. AGENT agrees to seek prior approval of OWNER on all expenditures in excess of $150.00 for any one item, except monthly recurring operating expenses and/or emergency repairs deemed necessary by the AGENT to protect the PROPERTY or to provide services to the tenant as provided in their leases;

4. Long distance communications with OWNER;

5. Legal fees for actions instituted against tenants;

6. Any additional expense as requested by OWNER on “Schedule B”, attached to this Agreement, and;

7. Utilities, including but not limited to electricity, water, gas, as deemed necessary by AGENT during periods of vacancy.

6. DUTIES OF OWNER.

(a) INVENTORY LIST. OWNER shall provide AGENT with a complete inventory of furnishings or other items on the PROPERTY. This list shall be updated as necessary.

(b) KEYS, HOUSE RULES. OWNER shall furnish AGENT with three complete sets of keys to the PROPERTY, two sets to be issued to tenant and one set to be retained by AGENT; one copy of House Rules (if applicable) and copies of all service contracts or warranties in effect for PROPERTY including equipment or fixtures. OWNER shall furnish a “beginning” written Inventory and Condition form, copy of the applicable insurance information and other information available, when applicable.

(c) MINIMUM BALANCE IN OWNERS TRUST ACCOUNT. OWNER shall maintain a minimum balance of $150.00 with AGENT. AGENT may apply such funds for expenses incurred on OWENR’S behalf or for AGENT’S fees. If the balance in OWNER’S account falls below this sum, OWNER shall restore this balance within ten days of AGENT’S request for such additional funds.

(d) HOLD HARMLESS. All obligations or expenses incurred will be for the account, on behalf and at the expense of the OWNER. OWNER shall indemnify, save and hold AGENT harmless from all claims of third parties in connection with AGENT’S management of the PROPERTY, including but not limited to claims for personal injury or property damage from any cause whatsoever in or about the PROPERTY, or loss of or damage to any furnishings, fixtures, or other articles therein. OWNER will reimburse AGENT for costs and expenses, including attorneys’ fees paid or incurred by AGENT in connection with the defense of any such claims or demand. AGENT shall not be liable to OWNER for any error of judgment or for any mistake of law or fact, or for anything it may do or refrain from doing, except in cases of willful misconduct or gross negligence.

7. PROWER OF ATTORNEY. OWNER hereby appoints AGENT his true and lawful attorney-in-fact, with full power of substitution, with authority to sign and acknowledge on OWNER’S behalf any lease of the PROPERTY, to take any action necessary to enforce compliance with such lease, including eviction of any tenant, and to engage services related to the PROPERTY. This special power of attorney is irrevocable during the term of this Agreement and shall survive the incapacity or death of OWNER.

8. TERMINATION FEE. In consideration of AGENT’S efforts, OWNER agrees to pay AGENT a termination fee equal to the management fees due for the balance of the term of any rental or occupancy agreements in effect at the time of cancellation. This Agreement may be terminated with 60 (sixty) days prior written notice to the other party. OWNER will be liable to immediately pay for all authorized expenditures described herein and fees owed to AGENT. If however, OWNER terminates this Agreement without providing 60 (sixty) days notice, an additional a fee 35% of one-month’s gross rent will also be charged. These fees will be paid BEFORE rental account/file is transferred/closed.

9. SALE OF PROPERTY. There is no obligation for OWNER to list the PROPERTY for sale with AGENT. If, during the term of this Agreement, the PROPERTY is offered for sale by OWNER, OWNER agrees to (a) give AGENT prior notice, (b) not contact tenants directly or infringe upon their right of quiet enjoyment, (c) not require AGENT to show the PROPRTY for purposes of sale, unless AGENT is Listing Agent by separate agreement, and (d) make arrangements through AGENT for showing of the PROPERTY in such a manner that rental agreements with tenants are not jeopardized or made liable for cancellation for good cause. Sale of the PROPERTY will automatically terminate this Agreement subject to any applicable termination fee.

10. ASSIGNABILITY. AGENT may assign its rights hereunder to another party who shall thereupon assume all of AGENT’S obligations and duties set forth in this Agreement.

11. NOTICES. All notices and demands hereunder between the parties shall be in writing and shall be served by personal service or by regular, certified, or registered mail.

12. OTHER.

 13. COMPLETE AGREEMENT. This document constitutes complete agreement between the parties related to the matters covered herein. This Agreement supersedes all prior agreements, understandings, or representations by and between the parties, whether oral or written. This Agreement shall be binding upon the successors and assigns of the parties. Each party should consult it’s own attorney if they have any questions concerning the terms of the Agreement. The ordinary rule of construction that, in case of ambiguity, a writing is to be construed against the drafter shall not be applied in the interpretation of this Agreement.

 14. MEDIATION AND ARBITRATION. If any dispute or claim in law or equity arises out of this Agreement and the parties are unable to resolve the dispute themselves, the parties agree in good faith to attempt to settle such dispute or claim by mediation under the Commercial Mediation Rules of the American Arbitration Association. If such mediation is not successful, such dispute or claim shall be decided by binding arbitration in Honolulu, Hawaii, before a single arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to an award of reasonable attorney’s fees and the costs of the arbitration. This Agreement shall be interpreted in accordance with Hawaii State Law.

 Receipt of a copy of this Agreement is acknowledged by each party.

 __________________________________    __________________________________

Broker for ALOHA PARADISE REALTY, INC.          OWNER

                                                                         __________________________________

                                                                        OWNER

SCHEDULE A

RENTAL AND AMANGEMENT INFORMATION SHEET

 Check those that apply:             (incl. Brand names & serial numbers when possible)

 Property is to be rented FURNISHED (OWNER to provide inventory) OR

 PARTY FURNISHED (includes draperies, carpeting and appliances above).

 Pets Allowed*?  (circle)    NO    YES  *In the event Tenant provides a medical doctor’s certificate requiring tenant be allowed to have a pet for medical reasons, OWNER concurs that a pet shall be allowed, provided a “Pet Addendum” is duly executed with the lease agreement.

 (Note: Lease periods, number of occupants, and/or acceptance of pets are subject to provisions of any applicable Owner’s Association by-laws and House Rules, City Ordinances, and State and Federal Laws.)

 Following services are included:            Check those that apply.

	Electricity			Gas			Water/Sewer
	Telephone			TV/Cable			Yard Service

 DISPOSITION OF INCOME:

AGENT is hereby authorized to pay all monthly bills and other expenses in connection with management of the premises, from funds available in OWNER’S account, as indicated*:

General Excise Tax   Owner Has License #__________________________

                                     ALOHA PARADISE REALTY, INC. to order License for OWNER ($20.00)

 Initial Deposit by OWNER   AGENT acknowledges receipt of $________________.

 Initial deposit of $150. to be taken from first months     

proceeds.

*fee cost on Schedule B attached

 Note: AGENT is not obligated to advance funds on behalf of the OWNER for any of the above payments. Any additional services requested on “Schedule B” will require OWNER to provide AGENT with coupon books, account number, etc.

 INSURANCE COVERAGE:

OWNER has liability insurance coverage with: _________________________________

(Carrier/Agent)___________________________________________________________

Policy Number___________________________________________________________

 OWNER has fire insurance coverage with: _____________________________________

(Carrier/Agent)___________________________________________________________

Policy Number___________________________________________________________

 KEYS TO THE PROPERTY – THREE FULL SETS: (Indicate Number, if different)

Door _____     Mailbox _____ Secuirty _____ Pool _____     

Other ____________________________________________________

 LOCAL PERSON TO NOTIFY IN CASE OF EMERGENCY:

Name (Relationship), Address, Phone: ________________________________________________________________________________________________________________________________________________

 KNOWN PROBLEMS EXISTING AT THE PROPERTY:  (roof leaks, plumbing, electrical, repairs, etc.)

________________________________________________________________________________________________________________________________________________

 ESTIMATED DATE OF RE-OCCUPANCY BY OWNER: _____________________

 COMMENTS OR SPECIAL TERMS:

________________________________________________________________________________________________________________________________________________

PREFERENCE OF SERVICE IF ANY:

COMPANY NAME, CONTACT PERSON, PHONE #

Use back of form for additional information, if necessary.

 The foregoing instructions are complete and accurate to the best of our knowledge and ability.

SCHEDULE B

ADDITIONAL MANAGEMENT CHARGES

OWNER will pay AGENT additional compensation for the following services:

 (1). A contract fee of TEN percent of the accepted contract price for coordinating, obtaining bids, and inspection of any repair, renovation, or modernization of the unit, as authorized by OWNER, having a contract price in excess of $250.00 (two hundred fifty dollars).

 (2). A $10.00 to $25.00 service fee for minor repairs, errands and services handled by the AGENT in lieu of retaining professionals, when possible.

 (3). The following services are optional. Please INITIAL each service that OWNER desires AGENT to perform:

 Signature of Owner: __________________________________ Date: _______________

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