OWNER RESERVES- POLICY & PROCEDURE
As stated on the PMA under Management Fees and Expenses Paragraph J, MB is authorized to retain a minimum reserve which is most of the time, $300 per unit. This reserve shall be used to pay expenses in the event expenses exceed income. During
How do we collect the Owner Reserve
For properties that are tenant occupied, we collect the owner reserve by deducting it to the monthly rent income we collected from the tenant after on-boarding. This is usually done in multiple deductions until the $300 reserve is completely collected or sometimes deducted one-time.
How does this affect the Rental Owner Statement
The Owner Reserve amount can be found under Cash Requirements on the Rental Owner Statement.
Newly On-boarded Client’s FAQ
Why I only got this amount of disbursement where in fact you collected more than this even after the expenses?
For newly acquired clients/properties, the first monthly ROS will show a positive ending cash balance which is most of the time the amount of the Owner Reserve we retain in the client’s account that will also show under Cash Requirements. The agent should remind the client regarding the Owner Reserve that we are retaining as stated in the PMA that was signed.
Didn’t you deduct my Owner Reserve from my last month’s rent income? Why the amount of disbursement I got this month was not the amount after expenses being deducted to my rent income?
During the 2nd month after a tenanted unit is on-boarded, the Owner Reserve is most likely to have been completely collected/retained. Owner Reserve under Cash Requirement in the ROS should show the complete amount that we should retain on the client’s account($300 x # of units). The agent should explain to the client that the amount that was not disbursed was retained to the account to complete the Owner Reserve. The agent should find out how much the amount that was retained to the client’s account on the previous month/s and add it to the amount that was not disbursed on the current month to help the client understand what was done.