Curious about Alcove's new leasing model? Read on for more information (Note: for homes leased on the platform prior to July 2023)
During 2023 and beyond, all Alcove homes under existing legacy lease contracts will be transitioned to our new leasing model. Please keep reading for information and specifics on the new model where Alcove provides property owners & managers with more flexibility, and control over their rental properties.
Why is the model changing?
As the co-living and rental market has evolved, so has our operating model. This new model has been a success for many of our partners already, and it allows us to focus on improving our per-bedroom leasing experience and the Alcove platform to better serve our customers in more markets than we do currently. We are excited for the opportunity to continue to serve our landlord partners like yourself.
What exactly is changing with the new model?
Each property on legacy contracts may be impacted slightly differently with the new model changes. Alcove still offers many of the same services - from marketing, tenant procurement & messaging, servicing & rent collection, at no cost to the owner or property manager. However, some previously included services such as Alcove utility ownership, free lawn care, and no-cost turn cleaning of bedrooms will no longer be included after the transition date. These services, and many more, can be booked separately through the Vendor Marketplace on your Alcove Manager Portal and the cost of services may be deducted from your ledger payments.
To compensate for the reduction in Alcove-provided services under the new model, owners and managers will receive a higher rent rate from tenants for each bedroom, and Alcove will receive a smaller fee.
The transition date for your property will be determined by the current longest legacy lease signed on the property. All current legacy model homes will continue to operate as normal until the current longest standing legacy lease expires. Existing legacy model homes will not be eligible for renewal with Alcove unless they transition to the new model.
To see the specific impacts and changes to your property under the new model, see the 'Leasing model upgrade' section of your Alcove Manager Portal. This page contains the details of the changes in responsibilities & obligations specific to that home. Example screenshots below:
How will I be affected during the transition to the new model?
Depending on the legacy lease agreements signed on the home, Alcove will continue to offer the same services such as utility ownership and lease guarantees until the new model transition date. Under legacy contracts, properties had a base platform fee of roughly $250 for each bedroom. So, the Alcove fees were approximately: $500 for a 2-bedroom, $750 for a 3-bedroom, and so on (this excludes other fees, such as short-term lease premiums).
Alcove adjusted these fees for each bedroom depending on market demand and to facilitate quicker leasing. Moving forward under the new model, pricing is consistent and more standardized across each property and bedroom.
If your property is transitioning to the new model, you may receive applications whose lease terms extend beyond the transition date displayed in the Alcove Portal. As we move to the new owner-owned utilities model, owners & managers will sign leases showing the higher combined rent amount that tenants will be responsible for and you will be receiving for each bedroom. For applicable properties where Alcove continues to cover utility costs and other legacy services during the transition phase, a 'Service & Utilities Deduction' will appear on your account for the months leading up to the transition date. These Service & Utilities Deductions will vary from bedroom to bedroom based on the originally collected Alcove fee. These deductions will be visible on the application prior to approval, and will cease after the transition date has passed:
Does the rent collection process change under the new model?
Under the new leasing model, Alcove will no longer provide rent guarantee payments. Instead, Alcove will only make payouts to the property owner once the tenant successfully pays their rent.
However, our existing rent collection process does not change. Alcove will continue to carry out our existing rent collection procedures. Unlike traditional property managers who collect rent on the 1st and pay the owner on the 15th, Alcove starts collecting rent from the 15th of the preceding month. This 15-day head start greatly improves collection efforts and supports timely rent payments.
If a tenant's payment fails, our team will reach out to them through text, calls, and emails every 2 days for a total of 20 days until the due amount is settled. This process does not change with the new model. However, in the new model, if the rent remains unpaid by the 5th of the month (roughly 20 days into our collection process), Alcove will share with the owner or manager the tenant's communication history and rent ledger.
At this point, the owner has the option to initiate a summary ejectment (eviction), either online or in person. Due to changes in the new model, Alcove will no longer have the authority to undertake this process as Alcove is no longer listed as the tenant in the lease agreement. Still, in the rare case you need to proceed with the filing for eviction, our Alcove support & operations team will continue to assist in this process, including continued follow-ups with the tenant and guiding owners & managers on the next actions to take.
More information on how rent collection works can be found here.
How do early lease terminations work under the new model?
Similar to any standard residential lease, tenants are responsible for lease payments for the entire duration of the lease for both the new and old model. Typically, Alcove requires tenants to wait or source a replacement tenant before an early lease termination is approved. In both the new and old model, our team continues to actively support the process by marketing, leasing, and showing/ touring the bedroom.
In the old model, Alcove may have permitted tenants to end their lease early without a replacement, given a 1-2 month notice, based on whether we assessed that the room could be filled quickly. With the new model, however, landlords will make the decision. Owners and managers may request the tenant source a replacement housemate or require they pay an early lease termination fee. Any termination fees will be directed to the landlord (instead of Alcove) under the new model.
That said, Alcove’s own lease termination fees will still apply to the tenant if they are ending their lease early and leaving the Alcove platform entirely. More information on how early lease termination work can be found here.
What happens if I do not want to transition to the new model?
All current legacy model homes will continue to operate as normal until the current longest standing legacy lease expires. Existing legacy model homes will not be eligible for renewal with Alcove unless they transition to the new model.
If you do not wish to transition to the new model after the transition date, owners and managers may opt-out of the transition. This can be done from the 'Leasing model upgrade' section of your Alcove Manager Portal. Scroll to the bottom of the page and select the opt-out option to set the decommission date for the home.
You may continue to receive applications for vacant bedrooms up until the transition date, however no new leases will extend beyond this timeframe. Alcove will schedule the home to be decommissioned (removed) from the platform after the transition date and return the property to the owner or manager.
Questions & Support:
Questions or concerns about the new model and how it will affect your property? Schedule a meeting with our Partner Support Team who will be happy to assist and clarify any questions.