How it is used
The limit is written into the management agreement and can differ by owner. Below it, the manager books the work and reports it on the statement. Above it, the manager sends the owner a quote or a short recommendation and waits for a yes. Emergencies, such as a burst pipe, no heat in winter or a safety hazard, are handled first and reported straight after.
The limit applies to the job, not to each invoice. Otherwise one repair split into two bills slips under it.
Worked example
Approval limit: $500.
| Repair | Cost | What happens |
|---|---|---|
| Replace kitchen faucet | $380 | Under the limit: done, receipt on the statement |
| Replace refrigerator | $1,450 | Over the limit: quote sent, wait for owner approval |
| Plumber: two visits for one leak ($400 + $350) | $750 | One job over the limit: needs approval, even though each bill is under $500 |
| Burst pipe at night | $2,200 | Emergency: fixed now, owner told the next morning |
Common mistakes
- Applying the limit per invoice instead of per job.
- No written definition of an emergency. Agree in advance what counts.
- Approvals given by phone and never recorded. Keep the owner's yes with the invoice.
- A limit that never changes. Repair costs rise. Review it with each agreement renewal.
Related terms
- Owner statement: An owner statement is the report a property manager sends to each property owner, usually monthly.
- Reserve fund: In property management, a reserve fund is cash the manager holds back from an owner's funds to pay repairs and bills that come up between statements, usually a fixed amount set in the management agreement.
- Owner distribution: An owner distribution is the money a property manager pays out to a property owner from the funds held for them, after expenses, fees and any reserve have been covered.
Further reading
- Setting owner approval limits and late-rent rules
- What to include in a monthly owner statement
- Owner Statements: the nvisin tool built around this