By Bob Reiss
In the spirit of Halloween, we’re compiling some tips to prevent you from being spooked, bitten or harmed by your telecom contracts! Below are some of the most challenging problems our clients face every day as they seek to purchase and operate their assets.
Technological Obsolescence – this might be the scariest issue of all! Do you have DSL service that’s outdated, RG-59 that won’t support all the new features Providers are offering? Are your residents complaining about available internet speeds? Are there constant service tickets and calls? Does it seem like someone is always in your office and feel they overpay for services you provide? How will you retrofit the building for improved services? Who will pay for new wire, materials and construction?
These are valid questions and issues RealtyCom deals with every day – we understand our client’s main objective is to operate successful properties and there are many competing priorities. In these situations, there are options available both with franchise operators and tertiary or internet-only providers that may resolve your issues. An individual assessment and plan must be formed to address the specific problem. We utilize our due diligence team, engineering and construction planning teams, as well as our project management resources to work with your properties to ensure a plan is properly executed.
Private Cable Operators – not all private operators are created equal, and you certainly don’t want to inherit a Frankenstein at your door. Due diligence is a key component to identifying a potential service deficiency or financial problem with an operator that may be underfunded or unable to meet current resident demand. Each owner has their own ROI when seeking a new investment, and that can be significantly impacted should you need to terminate an agreement the Buyer put in place and bring in another alternative provider, all while ensuring a timely project and great resident experience as you take over the asset.
Luckily, in addition to negotiating alternative provider arrangements and seeking financial compensation for our clients – we also manage installations and provide in-house project management resources. These solutions can be complex and require planning and owner insight as to what is best for the asset. Oftentimes some of these discussions can take place right when you take over an asset, so you have a plan to enhancing operation or services right away.
Revenue Share Mismanagement – so you haven’t received a payment in 3 years? Seems easy enough to contact the provider and ask for your money, right? Unfortunately, sometimes there are many roadblocks between you and getting that check. Previous owners receiving the checks, providers escheating the funds to the state, or maybe you missed your window to recoup funds due to contract or assignment provisions not being met? Or even worse, maybe the provider claims you’ve defaulted on your marketing responsibilities.
Aside from utilizing your trusty telecom attorneys (here’s a shameless plug for Davis Craig PLLC and Hubacher, Ames and Taylor PLLC) you should call us, and we’ll help you navigate these and other issues with your payments. We have many clients who have hired us solely for our revenue management service and expertise to ensure proper collection/accuracy/centralized reporting of your payments, and our accounting team has come across just about every issue you can imagine.
Mandatory assignment provisions – One of the most common questions we receive is if you can terminate your telecom agreement when you sell the property. This puts the Seller in a precarious situation – is there a good reason for the Buyer not to assume it, or are they like Dracula wanting a new upfront payment? Is there an early termination clause which allows, typically for a fee, to shorten the term or terminate the contract? Maybe the property isn’t opened yet, and they just want “to keep their options open.” In any case, there are usually logical ways of explaining the contract terms and dealing with these requests. In most cases the agreement includes benefits to the Buyer and aligns with their vision and goals for the property after a quick discussion. In other cases, a termination request may be valid and perhaps negotiated with the providers directly as part of the sale. Often agreements do not provide a termination option for convenience, so it takes knowing the right people within the organization and negotiation to make any progress.
Whatever might be your telecom nightmare, RealtyCom has diverse experience, knows the right people, and after many years in business we’ve come across just about every situation and problem you might encounter – so you don’t have to go it alone. Give us a call or email us at info@realtycompartners.com and let us show why so many valued clients have placed their agreement needs in our hands and we promise, no ghoulish behavior.
