In this respect, the operation of service apartment companies differs from traditional hotels. In traditional hotels, almost all employees are generally employed by the owner and not by the operator. In the case of service apartment companies, the company`s employees are usually employed by the operator. Therefore, an essential aspect of the due diligence process would be the issues of interest to these individuals. This can be a culture shock for traditional hoteliers who do not have the experience of being the employer of a large number of employees. The potential legal risks and responsibilities that result generally require careful consideration. What makes a hotel-business? It is possible to enter into a verbal agreement for this type of partnership. Oral agreements may be legally applicable, but it can be difficult to prove what the agreement was without written records. In some situations, the potential buyer aims to change the brand image of each management agreement. The incumbent operator will generally be very resistant to maintaining this potential before being completed. In addition to all other factors to consider, the potential buyer must therefore consider whether he will be able to convince all relevant stakeholders (all private owners and the owner`s company) to accept a change of brand. Similarly, the buyer must recognize the consequences (if any) of the fact that he is unable to do so. This agreement is essential to protect you from liability.
It also offers a structure for an advantageous partnership between the owner and the property management company. A good property management contract defines all specific responsibilities for leasing real estate, managing real estate and complying with local regulations regarding land and tenants. Fundamental aspects that should be addressed in this agreement: you normally have to terminate between 30 and 90 days in advance to terminate the contract. Make sure that the agreement also stipulates that the property management company must give you at least 30 days at least 30 days in advance if it decides to terminate the contract. In mature markets such as Z.B. in some parts of Australia, existing service apartment management companies are one of the really useful ways to expand business processes when development opportunities are limited. This reasoning will apply to varying degrees in other similar hosting markets. A handshake contract works well as long as the business partnership goes smoothly. A written contract provides both parties with better protection in the event of a dispute. If you run a real estate management company, it is advisable to create a typical contract for your business relationships.
This contract can then be customized or, to a large extent, intact for certain features. You want to try to avoid signing a long contract until you have proven results from the management company and you have confidence in it. Unfortunately, most management companies will not sign a contract for less than a year. In this case, you should carefully consider the termination clause and ensure that you can terminate the contract if you are not satisfied with the service.