Annual legal expense allowance


#1

About a year ago, I bought my 2nd park. The previous owner had a “legal agent” that he paid $10 per lot to manage all issues with the park from simple lease violations to evictions and everything else in between. Basically if the park manager had any issues with any tenants, he would contact the legal agent who would then call the tenant to settle the issue. This legal agent also would represent the park in court for evictions, he would also do negotiations with problem tenants to try to get them to sell their home to the park in an effort to get them to move out of the park. I have kept paying him for the year that I have owned the park and am looking at having him do this for my other park as well. It has been real handy having him aboard as he pretty much just takes care of my problems (always keeping me in the loop and advised). Should my manager be doing this stuff for me? I do think my tenants respond to him better than they would to my manager getting on their case about things. I am wondering if anyone else does anything else like this and how it has worked out for you.

Is this money well spent? or is it an expense that could be eliminated with a better manager? I appreciate all thoughts on this. Thanks

This guy is not an attorney. He refers to himself as a legal agent.


#2

Does the legal agent also drive through the park monthly and note the rule violations, or just does the backoffice work? It’s an interesting model - did the prior owner just give this guy power of attorney? If they aren’t licensed then that’s sort of weird to me.


#3

The legal agent does not drive thru the property much, He will knock on a door if needed though. The legal agent does ask for a signed Power of Attorney on the eviction cases, but the POA is for that case only and is not a broad POA that covers everything. It is for that specific eviction case only.


#4

Presume $10 per month, not per year?


#5

Yes, $10 per month per lot.


#6

Definitely sounds like double pay but the issue is, seems like you have a good little system thats working as this person is capable on handling certain issues. How much is this costing ( i.e. how many lots? ) is it a 30k a year expense ? or 3k a year? Also are you able to share what your mgr is getting paid? If it was someone decent and saving you time, i might stick with it but if its substantial and your mgr is getting overpaid you might re evaluate this whole thing.


#7

The park is 30 lots. The legal agent is paid $300/mo for his services.

The manager is paid $500 per month in cash, plus gets free lot rent of $375 and I pay for the managers phone and internet which is $120/mo. Then I provide workers comp on the manager to. All said and done, this manager costs me about $1100 month + the cost of the legal agent $300, my monthly management and legal cost is $1400 for a 30 unit park.

What would you say my cost for this should be?

The current system is working, I just think I may be overpaying for it, especially on the managers side.


#8

That seems high to me, but I guess if these are POH there could be issues all over the place and you have to comply, evict regularly. If they are TOH I think it’s too high, or there is another underlying issue.


#9

What would it take for this legal agent to do the managers work? Sounds like they might be doing the managers job?

There really isn’t much stuff going on in a park this size most of the time.


#10

Could be some crossover that legal agent is doing some of managers job. However, there are lots of things missing here from the standpoint of the amount of eviction work. Was this legal agent doing a few evictions a month? Did this park have a lot of bad paying tenants? Why is the lease always being reviewed?

So I don’t have a problem having a legal agent and would not want my manager being a lawyer. But to answer your question in all reality it just depends.