d for Both Sides, or Not!


you interest on it, but frankly I see that as unfair to the operator. I prefer to have the owner advance two or three months’


operating expenses when the contract is signed. Then have the operator place all monies collected in the owner’s bank. Have a reconciliation every quarter or so to ensure that it doesn’t get out of balance. Another approach is to


It is extremely important


advance, out ofmonthly income, a set amount. The operator would place the first, say, $50,000 in his account and the rest collected in themonth in the owner’s. If the 50K was too much, the balance could be carried forward; if too little, it could be adjusted in futuremonths. However, none of this works well if the operator doesn’t get


How can you expect an operator to front the costs of running a garage?


the management reports in on time and if the owner doesn’t review them to ensure they are accurate and reflect what is writ- ten in themanagement agreement. I have seen situations where the owner doesn’t even read


the report, and after a year, I am brought in to review it. They can be accurate to the penny, or there can be errors andmistakes (like thosementioned above) that can amount tomany thousands of dollars.


that the reports be reconciled monthly and that any errors be worked out at that time. Trying to solve problems months or even years after the fact, when the garage manager and the buildingmanagermay not be the same ones that were there when the issue occurred, can be impossible and often unfair to both parties. By the way,management agree-


ments are contracts. They can be negotiated. Just because the owner


hired a pain in the butt like me to write the agreement doesn’t mean that the operator has to accept it.And there is nothing that says the standard agreement the operator brings to the table is sacrosanct. Take the time to go through themanagement agreement line


by line. If there are paragraphs you don’t like, change them, chal- lenge them, andwrite newones.Remember, you are going to live with this for the term of the contract, and some of the require- ments can be unsettling for both sides. Take this one example –Workers Compensation Insurance.


Continued on Page 37


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