Property Preservation Contracts: Everything You Need to Know
Property preservation contracts are documents that you will sign if you have been appointed by a bank to take care of a foreclosed property. 3 min read
2. Duties and Responsibilities
Updated November 18, 2020:
Property preservation contracts are documents that you will sign if you have been appointed by a bank to take care of a foreclosed property.
Introduction to Property Preservation Contracts
It is common for banks to hire people to care for foreclosed properties. If you have experience with contracting, taking care of these properties can be an extremely profitable endeavor. You could either start your own contracting business or act as the representative of a property management asset company.
To start working preserving foreclosed properties, you will need:
- Experience in the property preservation field.
- Insurance coverage.
- Your own vehicles and tools.
Before you can get work preserving properties, you will need to register with both asset management companies and banks, as these entities will only hire registered vendors. You will also need to follow contractor guidelines established by the Federal Housing Administration, the Department of Housing and Urban Development, and the Veteran's Administration.
When a bank forecloses on a large number of properties, it can be hard for them to quickly dispose of these properties, requiring them to preserve these properties until they can be sold.
You will need to be very proactive in marketing yourself if you want to be hired for property preservation. It's also important that you have the licenses and the ability necessary to do this work.
When a bank hires a property preservation company, their goal is to preserve a foreclosed property and maintain its property value until it can be sold. This also helps the bank comply with property maintenance and care ordinances. The conditions of foreclosed property can range wildly, with some properties only needing minor upkeep and others on the verge of collapse.
Some of the jobs you will need to perform as a property preservation specialist include:
- Landscaping and lawn care.
- Pressure washing the exterior of the property and cleaning gutters.
- Upkeep of the property's interior.
- Repairing damaged windows and other broken items.
- Winterizing and painting.
If you want access to as many jobs as possible, you should offer a wide range of services. Even if you have a limited skillset, you can still offer a large number of services by hiring experienced employees. When you first start offering property preservation services, you can control your costs by only taking small jobs that don't require specialized equipment. You should perform market research to find out the demand for property preservation services in your area. As you add more services to your business, you will need to cover these services in your business plan.
Generally, banks do not retain employees to care for foreclosed properties. This is why typically contracting this work out to asset management companies or individuals with property preservation experience is recommended.
A bank's Real Estate Owned Department is responsible for handling the repossessed property. Contacting the Real Estate Owned department of lenders in your area is a good way to find property preservation jobs. If a bank has already hired someone for their property preservation needs, you can request that they place you on a waiting list for future opportunities.
Duties and Responsibilities
When you work as a property preservation contractor, one of your biggest responsibilities will be making sure the property you are managing is properly secured and remains unoccupied. To accomplish this goal, you may need to change the locks on the property and board up windows.
You will also need to regularly inspect the property for signs of damages so that you can schedule a repair. If necessary, you will need to winterize the property and schedule extermination if there is a pest problem. The utilities of the property will need to be shut down correctly, and you should frequently perform maintenance around the property, including lawn care.
The bank that hired you may give you something known as a Property Preservation Matrix, which will show you all property preservation tasks for which you are responsible. This is the payment you will receive for completing these tasks.
Getting in touch with your area's top property preservation businesses is the easiest way for you to find work.
Many of these large companies will hire contractors to handle preservation tasks such as:
- Electrical work.
Applying online with property preservation companies in your area can help you enter this lucrative field.
If you need help understanding property preservation contracts, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.