The basis of the owner-agent relationship will be the housing management agreement. In essence, the agent is responsible for the entire day-to-day operation and management of the project and has broad authority to act so as to perform that function. More precisely, the agent will hire and supervise (and, if necessary, fire) all personnel employed in the project: resident manager, secretary/bookkeeper, maintenance man. The resident manager will be under supervision of one of the agent's property managers; all other personnel employed in this project will be under the supervision of the resident manager. The agent, and its employees, shall have total responsibility for rental of the project, including receiving and verifying applications from applicants for 221(d)(3) BMIR program, tenant selection, rent collection, negotiation of deferred rent payment arrangements, evictions, etc. The owner will not instruct the agent or its employees regarding the matters of tenant selection or eviction. The agent shall have full responsibility for the collection of all monies coming to the project in the form of basic rents and adjusted market rents. These funds will be deposited in an account established in the agent's name, to be called "_________ rental agency account." Rental income in excess of BMIR rent will be credited to the residual receipts account. Likewise, security deposits shall be collected by the agent and deposited by the agent in a separate account, to be called "_________ security deposit account." The agent has the authority to spend funds from said accounts in accordance with the owner-approved budget and may exceed budgeted amounts in reasonable amounts, if, in the agent's opinion, said expenses are necessary and do not jeopardize the financial position of the project.

The owner's responsibility is primarily that of making policy regarding the operation of the project. Areas which the agent will look to the owner for policy include, but are not limited to: tenant selection, evictions, rent collection, disbursement of interest earned on security deposits, grievance procedures, tenant organization, etc. Information included in this management plan regarding these areas shall be considered the policy of the owner. _________ is primary contact person for the _________ foundation, and will be responsible for informing the agent of the decisions of the board of directors.

Regarding the hiring and supervision of personnel working in the project: the owner will have no authority to hire or fire personnel, nor will he have the authority to supervise personnel. These matters shall be left entirely to the agent. Of course, the owner and the agent's resident manager may consult on a day-to-day basis regarding the operation of the project and may make suggestions; but the resident manager will report directly to the agent's property manager for supervision. Any major differences of opinion regarding the agent's interpretation of the owner's policies or regarding the general operation of the project shall be a subject for discussion and resolution between the owner and the agent's property manager. Likewise, the supervision of the maintenance man shall be the sole responsibility of the agent's resident manager. In no instance shall the owner make direct work assignments to the maintenance man. (Nor, for that matter, shall tenants make direct work requests of the maintenance man: all such requests shall go through the resident manager.)

As regards the payment for the agent's management services and for the operating expenses of the project, it is understood that the following expenses shall be borne by the agent out of his fee and are not to be treated as expenses of the project:

Off-site overhead, including:

Credit reports

Rent collection costs

Banking costs

Bonding costs

Fringe benefits for agent's employees (resident manager)

Cost of any supervisory personnel

It is further understood that the following expenses are to be borne by the owner out of project income and are to be treated as project expenses:

Maintenance man's salary and fringe benefits

Advertising costs

Utility costs

Maintenance and repair expenses

Garbage and trash removal

Debt service, taxes, insurance, MIP

It is understood that the owner will make available, free of charge to the agent, a project office and one apartment in the project for use by the agent's resident manager. It is further understood that the owner will provide major pieces of office equipment, such as typewriter, tape calculator, desks and chairs, file cabinets, etc. It is expected that such items will be paid for out of mortgage proceeds or rent receipts. In the event that the agent must purchase some of this equipment, said equipment shall remain the property of the agent and will be removed from the project should the management agreement be terminated.

The decision-making process will center around the agent's resident manager. All decisions and authority given to the agent under the terms of the management agreement will be delegated to the resident manager, acting under the direct supervision of the agent's property manager. The agent will consult with the owner on those matters required by the management agreement (e.g., matters of policy, budget, etc.). In addition, informal consultation will take place regarding the hiring of a resident manager and other personnel. The agent does, of course, reserve the right to a final decision in this area to itself. Further, the agent will consult with the owner when a deviation from the owner-approved budget is expected or necessary. The agent will also consult with the owner before obligating the owner's resources for materials or services whose cost exceeds $_____.

Since the owner is a nonprofit corporation, the agent will meet regularly with the board of directors of the owner for the purpose of reporting project status; making recommendations for policy revisions; budget revisions, etc.; assisting the board toward steps which would improve the project. It is understood that the key contact person on the board of directors is the president of the corporation.

The agent, acting through its resident manager, will initiate and carry out the social services program [§7.5037] for the project. The agent will train its resident manager in the business of meeting the social services needs of the tenants both through direct programming and the establishment of a referral service. The agent expects to receive broad cooperation and interest in this effort from the owner, since the owner has well-established roots in the community.