By Rush Blakely

Revenue share and other types of compensation agreements are commonplace between apartment community owners and the telecommunications service providers that serve their residents.  Despite this, there is no one-size fits all program.  Some revenue share plans are based on a sliding scale (higher subscription rates equal higher payout rates), some are based on flat percentage and others are based on flat dollar amounts – either on the total number of units or the number of subscribers of a given service.

RealtyCom Partners manages revenue share on behalf of our clients – at present, we are managing recurring revenue share payments on over 350,000 apartment units.  Most providers have dedicated groups within their company or in their regions/divisions that calculate and produce revenue share reports and checks on a regularly occurring basis.  Despite this regularity, this is not something you want to set, and forget, you should inspect what you expect.

RealtyCom routinely sees between 35%-40% error rate across our portfolio.  These errors can range from incorrect payout rate, incorrect unit count (impacting subscription rates), incorrect products included in calculation to incorrect payee and more.  Just last year, a large provider left out one month in their quarterly reports – this was a pretty obvious error, but not all of them are this obvious.  One area that deserves specific attention is when properties are acquired and revenue share agreements are in place.  Some providers just need a W9, others require a specific assumption document.  Without this, checks can either stop and be held by the provider or worse continue going to the seller.

It is the job of RealtyCom’s talented accounting team to audit each and every one of these payments for our revenue share managed clients.  When they find errors, they work with the providers until the errors are corrected and checks are issued to reflect the correct amount.  In short, we inspect what we expect!  In the case of acquisitions and dispositions, RealtyCom assists in the assignment and assumptions necessary to point ongoing checks in the right direction and go back and collect funds that were held by providers.

Whether checks are going to your properties or to your headquarters, these payments should be reviewed on a regular basis.  If you would like to discuss revenue share management with RealtyCom, please contact us at info@realtycompartners.com.