Prosser Realty, Inc.

Rental Management Agreement

This AGREEMENT is dated this _____ day of ____________________, 2010, by and between Prosser Realty, Inc., (herein
“Manager”) and __________________________________________________________________________________ (herein
“Owner”).
Owner hereby hires Manager and Manager hereby agrees to manage, on terms and conditions herein set forth, certain improved property located at
____________________________________________________________, Hawaii, and described as _________________________________
____________________________________________________________________________________________________________ (herein
“Property” and/or “the Property”).
1. Term: The term of this Agreement shall be for no less than a one-year period beginning on the ____ day of ___________________, and
ending on the same calendar day of the year ____ and shall continue thereafter for annual periods, unless either party hereto shall notify the
other in writing of the intention to terminate this Agreement at least sixty days prior to any succeeding annual anniversary date. This
Agreement may be terminated with thirty-day notice after the end of the first year, provided both parties agree in writing to said termination.
Manager shall receive all commissions due for the entire period of any existing term leases and all confirmed vacation rental reservations of
record at the time of termination.
2. Confirmed vacation rental reservations or long-term leases for occupancy of Property obtained by Manager prior to the effective date of
termination (and whether such occupancy is scheduled before or after termination) shall be honored by Owner and all commissions paid to
Manager for said reservations or leases unless Manager can, prior to the effective date of the termination, obtain other accommodations for
the confirmed guests or tenants without objection from the parties. (VR) The term “confirmed reservations or long-term leases” as used
herein shall mean reservations or executed leases for a dwelling unit for which all or any portion of the required rental has been deposited
with Manager.
3. Manager shall be entitled to compensation for the occupancy of the subject Property for confirmed reservations as provided below.
4. Compensation to Manager: As and for payment of Manager’s services hereunder, Owner shall pay to Manager the following: twenty percent
(20%) of the gross rentals for each vacation rental of 179 days or less, or ten percent (10%) of the gross rentals for each rental 180 days or
over or for any rental designated long term. In the event the Owner secures a vacation rental reservation through his or her own advertising
or contacts, the management fee shall be 15% of the gross rental. Owner or owner’s non-paying guests may use the Property at any time
when it has not been previously reserved with no management fee. A commission up to 10% may be paid to travel agents or other Realtors
referring reservations.
5. The term “gross rentals” shall mean gross rental sums actually received by Manager prior to deductions for travel agent commissions or
commissions to condominium reservation companies, wholesalers, or other licensed referral sources and before taxes and deduction of
costs and expenses chargeable to Owner.
6. In the event that Manager is required to select and investigate prices for purchases of furnishings, fixtures, or redecoration, a charge equal to
10% of the amount paid for the purchase of said items may be charged by Manager, in Manager’s sole discretion. There is no such
additional charge for comparative pricing of standard replacements of appliances or furnishings. In Manager’s discretion, a minimum
charge of $50.00 and an hourly rate of $50.00 may be charged for selecting and delivering individual purchases required to refurbish or
replace worn, missing, or broken items, whether extraordinary or in the normal course.
7. Authority. Owner hereby confers to Manager the exclusive right to rent and manage Property during the term of this Agreement. For such
purposes Manager shall be the authorized agent of Owner and may bind and obligate Owner by the performance of Manager’s duties as
herein set forth. Neither Owner nor any other person or agent may rent, use, or occupy Property without advance notice to Manager
8. Owner, by execution of this Agreement, warrants and represents that he is either the sole owner in fee simple of the Property or is an owner
of an interest in fee simple title in the Property who has been duly authorized by all other owners to bind such owners and the Property to
the terms and conditions hereof. The liability of all owners in title shall be joint and several.
9. Duties of Manager: Manager shall undertake the following duties with reference to the Property and Owner:
Rental Duties:
Manager shall use such efforts, as Manager in its sole discretion may determine, to secure rental occupants for Property.
Manager shall be required to adopt rental solicitation programs including advertising. Manager reserves sole discretion to determine the
nature, extent, and expense related to such efforts. Owner shall reimburse Manager for the actual cost of such efforts.
Manager shall attempt to lease or rent Property at daily or extended term rates using, where possible, rates of comparable accommodations
in the same or similar geographical area. Notwithstanding the foregoing, Owner confers upon Manager broad discretion to determine rental
rates, taking into account extended occupancy by the same tenant, off-season rental, consumer resistance, and other factors that may affect
rental and occupancy rates.
10. Policies and Collections:
Manager shall provide rental guests/tenants with written notice of reservations. Manager shall set policies and advise Owner and rental
guests thereof with respect to reservations, check-in and check-out times, payment, maximum occupancy, and other regulations of and
relating to the use and occupancy of Property.
Manager shall accept payment of rents from guests/tenants by cash, personal check, credit card, or bank drafts, but in no circumstances will
Manager be liable to Owner for failure of a guest to pay rental balances or for dishonored checks, stop payments, forgeries, or any other
similar event that results in non-payment. Bank charges for use of credit card services shall be paid by Owner. Manager will use good faith
efforts to investigate the credit and tenant worthiness for any occupancy intended to exceed eighty-nine (89) days.
In the event Owner wishes to undertake collection efforts for non-payment, including but not limited to collection litigation, it shall do so at
its own cost and expense; however, Manager will assist Owner and any attorney or other representative that Owner selects by providing
information and materials indicating the dates of occupancy, confirmed reservations, rental rates, and other written and factual information
in the possession of Manager which may assist in such collection efforts.

Rev. 02/25 #1
Prosser Realty, Inc. Rental Management Agreement

Deposits of all receipts collected for Owner (less any sums properly deducted or otherwise provided for herein) shall be deposited in a
clients’ trust account either interest bearing or non-interest bearing in a national or state institution qualified to engage in the banking or
trust business, interest, if any, to accrue to Manager.
11. Inspections and Maintenance: Manager shall periodically inspect the Property. The failure of Manager to so inspect or, during inspection to
detect any defect or adverse condition, including but not limited to conditions affecting the integrity or safety of any structure upon
Property or factors that might affect the ability to rent the Property, shall cause no liability whatsoever to Manager.
Owner hereby authorizes Manager to perform or cause to be performed routine maintenance and repair work at Property (at Owner’s
expense). If any single expense exceeds five hundred ($500.00) dollars, written or oral consent of Owner shall be obtained.
Should Manager discover any condition in the Property that requires immediate repair, replacement, construction, or action in order to
prevent an unsafe condition, damage to the structures or adjacent areas (including common area), loss of rental income (herein “emergency
repair”), Manager may proceed with the emergency repair without advance consent of Owner and Owner shall be fully responsible for the
payment of all costs related thereto and the dollar limitations above described shall not apply.
Regardless of the nature of the repair, maintenance, replacement or construction work undertaken by Manager, Owner shall be solely and
exclusively responsible for all costs and charges in connection therewith and whether incurred directly by Owner or Manager on Owner’s
behalf. Owner shall be estopped to contest the nature of the work undertaken, the cost thereof and Manager’s authority to bind Owner in
connection therewith. If Manager or any of its employees or representatives undertake repairs, Owner shall reimburse Manager for costs
thereof including labor and materials and such obligation shall be separate and distinct from the compensation due and owing under
Paragraph 6.
12. Insurance Claims. If requested by Owner, Manager shall assist Owner in the preparation of any insurance claims for damages to Owner’s
Property. Such assistance shall be limited to the provision of repair invoices and copies of reservations canceled due to conditions at
Property.
13. Owner’s Duties:
Owner shall be required to purchase and maintain a minimum inventory of goods and accessories as specifically required to equip the
property adequately, effectively, and safely for tenants. Such items shall be procured and paid for by Owner.
Owner shall deliver the Property in clean, livable, and safe condition and shall, during the term of this Agreement, comply at Owner’s
expense with all reasonable requests of Manager in connection with the provision of furnishings, appliances, accessories, amenities, and
preventive maintenance.
Owner shall, at all times during the term of this Agreement, maintain and pay for a public liability and property damage insurance with a
single combined liability limit of not less than $500,000 (or maximum amount available from Hawaii licensed insurers, if that is less than
$500,000) and property damage limits of not less than the value of the improvements and contents insuring against all liability arising out
of and in connection with the rental, occupancy, and activity contemplated by this Agreement.
Owner shall cause Manager to be listed as an additional insured under said policy and shall provide Manager with proof of such status
within thirty (30) days of the execution of this Agreement and in any event before any rental or occupancy occurs pursuant to the terms
hereof.
Such policies shall contain an endorsement which provides that Manager shall receive not less than ten (10) days advance written notice of
any modification or cancellation of such policy.
In the event Owner is unable to comply with the liability and property damage insurance requirements of this paragraph due to the rules or
conditions of the insurance industry in the State of Hawaii, Owner agrees to hold Manager harmless and to indemnify Manager for any and
all claims that might arise out of said management of Owner’s property. Owner further agrees to comply with the requirements of this
paragraph and to notify Owner’s insurance agent in writing to fulfill these requirements at the earliest possible time.
Owner shall promptly pay to Manager all compensation due Manager and any other costs, fees, expenses, and charges for which Owner is
responsible within ten (10) days of submission of any invoice therefore. In addition, and without the necessity of advance invoicing,
Manager may deduct from gross rentals all such compensation and fees, expenses, and charges payable by Owner including fees and
charges related to maintenance and repair. In any case, Manager shall provide periodic accounting of gross rentals, Manager compensation,
and other fees, costs, expenses and charges.
14. Owner hereby authorizes Manager to make contracts for electricity, gas, fuel, water, telephone, window cleaning, rubbish hauling or other
services or such of them as Manager shall deem advisable. In the event this contract is terminated while any such contract is in full force
and effect, Owner shall assume said obligation until its termination.
15. Provided that Owner makes arrangements in advance with Manager, Manager shall install a telecharge telephone that will allow guests to
make local calls only at no charge. Owner shall, at Owner’s cost, be responsible for maintaining a conventional touch-tone line with the
local telephone company. (VR)
16. At Manager’s request, Owner shall deposit with Manager any amount up to a seven hundred fifty dollar ($750.00) reserve of Owner’s
funds for each house for unexpected repairs or other necessary costs. In the event current rental revenues or the reserve of funds is
insufficient to pay fees or any other compensation, fee, expense, cost, or charge, Manager shall have no obligation to pay said sums from its
compensation or other resources and may discontinue all payment of any such bills, and Manager shall not be responsible for any damages
or liability related thereto. In the event of Manager’s usage of reserve funds, Owner shall promptly restore Owner’s reserve account to its
required funding.
17. State of Hawaii and Federal tax liability:
Owner shall apply for and pay State of Hawaii Gross Excise Tax of 4% and all license fees (Hawaii Revised Statutes Sec. 237).
Owner shall apply for and pay State of Hawaii Transient Accommodations Tax of 8.25% and any registration fees related thereto. Under
Hawaii Revised Statutes Sec. 237d, transient is defined as occupancy for less than 180 days. (VR)
Prosser Realty, Inc. Rental Management Agreement

A total of 4.1617% of gross rent for general excise taxes and 8.25% for transient accommodation taxes (9.25% beginning July 1, 2010)
(VR) is collected from vacation tenants and is forwarded with Owner’s income. Owner is responsible for providing the state with the
appropriate returns and paying all taxes and any penalties resulting therefrom.
FIRPTA: Withholding tax for federal purposes is required if Owner is not a resident of the United States. The amount is generally 30% of
rental revenue. An election not to withhold may be filed with the IRS, if the Owner is a resident of a country that has a tax treaty with the
United States.
18. Limited Liability and Indemnification:
Owner acknowledges and agrees that Manager is not guaranteeing any particular number of days of occupancy or any rental income or
rental rate, although Manager will use good faith efforts to secure competitive occupancies and rates.
Owner hereby indemnifies and holds Manager harmless from any and all costs, damage, claims, expense, liability, attorneys fees, and any
obligation whatsoever, and whether incurred or suffered by Owner or other persons using, occupying, or working at Property, including but
not limited to claims, damages, or obligations related to emergency or other repair and maintenance; loss of personal property by theft,
including personal property of the Owner and/or guests, invitees, and renters; and injury to Property, personal property, or persons from
any cause whatsoever.
19. This Agreement shall be construed in accordance with and governed by the laws of the State of Hawaii.
20. If any dispute or claim in law or equity arises out of this contract, Owner and Manager agree in good faith to attempt to settle such dispute
by mediation under the commercial mediation rules of the American Arbitration Association. If such mediation is not successful in
resolving such dispute or claim, then such dispute or claim shall be decided by neutral binding arbitration before a single arbitrator in
accordance with the commercial arbitration rules of the American Arbitration Association. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The arbitrator may award reasonable attorneys fees and costs to the
prevailing party.
21. Owner may not voluntarily or involuntarily assign or transfer all or any interest in this Agreement to any other person without prior written
consent of Manager. Except as herein provided, this Agreement shall be binding upon and inure to the benefit of the parties’ respective
successors and assigns.
22. Headings are for aid in reading only and are not to be construed as a part of this agreement. Any masculine pronoun used herein should be
construed to include the feminine or neuter.

This contract supersedes any prior contract, verbal or written, between Manager and Owner. Manager accepts the employment under
the terms hereof and agrees to use diligence in the exercise of the obligations, duties, authorities, and powers conferred herein upon it.

___________________________________________________________ _________________________
Owner Date
___________________________________________________________ ________________________
Owner Date
Prosser Realty, Inc.

______________________________________________ ________________________
Peter A. Tegan, Principal Broker Date

(VR) Items that refer specifically to vacation rental properties.

Please be sure to complete all of the items on this page.

List owners by order of communication priority (person who has primary responsibility first).
Owner(s): Social Security Number

Owner(s): Social Security Number

Owner(s): Social Security Number

Mailing address (include name if other than first owner above) for checks and correspondence:
_________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________

_________________________________________________________________________________________________________________

Important communication data to reach owners or representatives:

Home Phone: ____________________________________________ Business Phones:________________________________________________

Home Fax: _______________________________________________ Business Fax: ________________________________________________

Cell phones: _____________________________________________ _____________________________________________________________

E-mail: __________________________________________________ ______________________________________________________________

Property information:

Address: _______________________________________________________________________________________________________

Phone No. _____________________________________________________________________________________________

Notes: Anything we should know about the property

View?_______________________# of Beds? ________________________Sizes of Beds? ___________________Sleeps #?_______________

Washer/Dryer?__________________Dishwasher?_______________________Internet?________________________A/C?__________________

Pool?__________________________How Far to Beach?_______________________________________________________________________

Comments:____________________________________________________________________________________________________________

______________________________________________________________________________________________________________________

______________________________________________________________________________________________________________________