Since we have been doing Corporate Housing for more than 20 years we take for granted that we all speak the same language:) When we created CHBO Complete our goal was to create a tool to get renters and property owners on the same page as quickly as possible. But every time I hire an new employee here at our Corporate Housing Management Company I am reminded how many terms we use that can be new to others.
Here at CHBO we work hard to make both our property owners and tenants the most educated and successful Corporate Housing users possible. So I thought this list of terms might make your life easier.
The Corporate Housing Dictionary
Corporate Housing – Corporate housing industry is a segment of the lodging industry that provides products, services and support of furnished, temporary housing.
Corporate Housing Provider – A corporate housing provider is a business that receives direct compensation for providing corporate housing, as defined.
3rd Party Client- A business (example: a relocation consulting company) that facilitates all or part of corporate transferees relocation. They are the go between the client corporation (the transferee’s employer) and the corporate housing company.
Apartment Corporate Housing Providers - Apartment communities that offer Corporate Housing in some of their apartments.
Apartment set-up – The process that includes all of the steps required to transform a vacant unit to a corporate apartment including securing the unit with a lease, setting up utilities, delivery of furniture and housewares.
Benefit Period – A specified duration of time in which the client agrees to cover charges of goods and/or services provided by a supplier.
Bi-Monthly Service Rotation – A service that occurs on a routine basis every other month.
Bi-Weekly Service Rotation – A service that occurs on a routine basis every other week.
Branding – The process of creating and maintaining a consistent image of a product or service
Client – The contact that is securing/negotiating the lease on behalf of the occupant.
Client master agreement – An agreement with a client that encompasses one or multiple units combined with a reservation confirmation.
Close out procedures – The process that includes all of the steps required to transform a corporate apartment to a vacant unit including: giving the required notice to vacate, removal of all furniture and housewares, as well disconnecting all of the utilities.
Core Inventory – The sum of all the units leased/managed by a corporate housing provider for repetitive rental. Not those LOD units setup for just one rental.
Credit card authorization form – A written authorization giving the corporate housing company permission to charge a credit card, from the person responsible for payment, including rent, deposits, damages, or utilities. The authorization may be recurring or one time.
Deposit – A deposit that is paid to the property to be applied towards damages beyond normal wear and tear. Corporate housing companies may also require a refundable deposit to be used in the event of damages from their clients.
Fair housing – A federal law, passed in1968 and subsequent amendments, that protects the 7 protected classes against discrimination in regards to access to housing. The seven protected classes are: race, national origin, color, religion, familial status, handicap and sex.
Final cleans – The housekeeping procedure that is performed once the corporate housing company removes all of the furnishings and is preparing to return the unit back to the property management company.
Intranet – An internal website that is only accessible by employees of the host company.
Lease Agreement – The lease document that is signed between the corporate housing provider and the property, as well as between the corporate housing provider and the client.
Lease Matrix – A report that illustrates lease expiration dates. Also known as a lease expiration report.
Linen & Towel Program Utilized by Managed Corporate Housing Providers this is an annual fee paid by property owners that allowes the corporate housing provider to offer standardized linen & towels in all rental units and maintain items at the highest standards possible.
LOD / Lease on Demand - A property that leased by the corporate housing provider with a fixed lease term that matchs the need and lease of a specific client.
Long Distance Block – A process that prohibits access to long distance services on the telephone.
LOR / Letter of Responsibility - A letter signed by a corporation taking financial responsibility for their employee living in a rental and any damage they may be cause. Used both in place of and with a security deposit.
Lump Sum Relocation Coverage – A relocation package that provides an employee with a specific dollar amount to cover the relocation needs of the employee and their family that they are free to use at their discretion.
Maintenance Blocks – A temporary block placed on an available property to allow for maintenance to be done.
Managed Corporate Housing Providers – Real estate companies that manage properties owned and furnished by individual real estate investors.
Master Community Lease – An agreement with a community that encompasses one or multiple units.
Master Lease – A lease taken out on a property by a corporate housing company with the expectation that the majority of the lease term can be subleased for a profit.
Mirroring a Lease – The policy in which the individual who is receiving the product must sign or is obligated in writing to the same length of lease that the service provider is required to commit in order to obtain or solidify the transaction.
MSA – Metropolitan Statistical Area, a city and its areas of influence; most MSAs consist of several counties. MSA and “market” are used interchangeably.
Notice to Vacate – A written notice to inform of intent to vacate the unit. Could be completed by the client to give notice to the corporate housing company or completed by the corporate housing company to give notice to the apartment community.
Number of Units - The number of units is the average number of available apartments in inventory, by market, for the month.
Occupancy % - Occupancy percentage is calculated by dividing the number of occupied unit nights for the month by the total number of available unit nights for the month. A unit may not have more than 100% occupancy during a month.
Occupant – The individual or family that is occupying the unit.
Off Line – The term used to refer to a property leaving the rental inventory.
On Line – The term used to refer to a property entering the rental inventory.
Outsourcing – To obtain goods and/or services from a supplier outside of your current company’s primary function.
Owner Block - In managed properties this is time reserved for use by the property owner.
Pet Deposit – A deposit that is paid to the property to be applied towards damages as a result of the pet. Pet deposits may be non refundable or refundable.
Pet Rent – Additional rent due to the property on a monthly basis as long as a pet is in the apartment.
PM Unit / Property Management – A property that is under real estate property management by the provider.
Property Profile – Description of the property and amenities.
Provider – Another name for a corporate housing company.
PTE (Permission to Enter) – Written permission from the occupant or lessee authorizing others to enter an apartment. Also called a key release.
Quality Assurance (QA) – The process of inspecting a unit prior to guest move-in to ensure that unit is ready.
Referral Fee – A sum received by the referring party for a lead that results in a booked reservation or the completion of a transaction.
Reservation Confirmation – The document used in conjunction with a client master agreement that lists the specifics regarding a particular occupant’s stay (including arrival/departure dates, apartment address, etc.)
RFI – (Request for Information) A formal document requesting general information on a company and/or its services.
RFP – (Request for Proposal) A formal document used to procure services or goods, which may or may not include pricing. An RFP can include: scope of work, service level agreements, length of agreement, company backgrounds, audited financial statements and references.
RFQ – (Request for Quotation) A formal document used to procure services or goods, which includes pricing.
Seasonal Clean – A clean done on a property in the core inventory of a provider. A seasonal clean address items not taken care of in a departure clean: behind refrigerator, ceiling vents, baseboards, door frames and other hard to reach areas.
Security Deposit – A refundable fee collected by the provider to cover damage to the property.
Security Deposit Waiver – A monthly fee charged to a tenant in place of a security deposit that protects the tenant for accidental damaged done to a rental property up to a specified ceiling.
Service Level Agreement – An agreement used to ensure the performance of service providers.
Service Corporate Housing Providers – These companies rent apartments, furnish and equip them, then offer the apartments as corporate housing.
SODA (Statement of Deposit Account) – A written accounting of the status of a deposit once a unit is vacated. Any charges as a result of damages or unpaid rent are itemized.
TDY – (Temporary Duty Year) Government employee on assignment at more or more locations, away from the permanent duty station (PDS), under orders providing for further assignment, or pending further assignment, to return to the old PDS or to proceed to a new PDS.
Turn Clean – The housekeeping procedure that is performed between occupants.
Turnover – The process of preparing an apartment between occupants.
Unit inventory management – The process of managing unit inventory to minimize vacancy loss.
Utility Allowance – The maximum amount budgeted for utilities in a corporate unit. A utility expense larger than the utility allowance may result in additional expense for the client or occupant.
Vacancy Loss – The period in which the corporate apartment is set up and no rental income is recognized.
Vendors – Companies that provide goods and services to corporate housing providers.
Virtual Corporate Housing Providers - Corporate Housing companies that maintain no core inventory and only setup leased properties corresponding to the needs of a specific tenant.
Wholesaling – The process of a corporate housing company renting a corporate apartment from another corporate housing company.
Work Orders – A request to the property to complete maintenance in the unit or common area of the community. May also be called a maintenance request.
ADR (Average Daily Rate) - The average daily rate is calculated by dividing the total month’s rental revenue by the total number of occupied unit nights for the month.
- Occupied unit – A unit that is rented to a guest or client is considered occupied if there is a signed lease for it during the dates being reported. This includes all reservations at full rate, discounted rate or having a complimentary rate code. The number of guests or reservations assigned to the unit during the month is not considered.
- Rental revenue – The revenue charged to the guest for unit rent. The rental revenue is the rate charged each guest times the number of nights the guest stayed in the unit during the month. Rental revenue is shown in local currency (US $, Canadian $, UK £)
Gross Profit - Gross profit is calculated by subtracting all direct expenses from the total revenue billed for the month. Total revenue includes all sources of revenue, including long distance telephone calls and any other extra charge posted to a guest or client account.
- Total revenue - Is calculated by adding all charges billed for each unit during the month. This includes all rental revenue, telephone revenue, revenue from extra services, etc. This also includes any fees paid by guests, including early departure, pet cleaning, etc. However, deposits are not to be included in this number.
- Direct expenses - Include apartment rent paid to landlords, furniture rental, operating stock expense, housekeeping labor, housekeeping supplies, and utility expense (including electric, gas, water and sewage, local telephone, cable television). In addition, unit repairs and maintenance, and other fees (referral fees and commissions, parking expenses, key expense, auxiliary warehouse rent expense, consumable expense, welcome bag expense, etc) are included in this figure.
Gross Profit% - The gross profit percentage (%) is calculated by subtracting direct expenses from the total revenue, then dividing number by the total revenue.
Net Profit - The Net Profit is calculated by subtracting Total Expenses (including overhead) from Total Revenue
Net Profit % - The Net Profit percentage is calculated by dividing the Net Profit by Total Revenue.
Net Profit Variance - The net profit variance is calculated by subtracting the budgeted net profit from the actual net profit, then dividing that amount by the budgeted net profit.
RevPar - Revenue per available unit. RevPar is calculated as “Gross Revenue divided by number of units rented.” It is a component of rate and occupancy.
BMA Broker Market Analysis/BMA – A standard relocation industry format used by an agent to establish the most likely sales price and suggested list price of a property.
BPO Broker’s Market Analysis (BMA)/Broker’s Price Opinion (BPO): A written market analysis of recent comparable sales and listings with suggestions for marketing strategies.
BVO Buyer Value Option (BVO) – A home sale program in which the value for the home is established by a bona fide offer from an outside buyer, and not by an appraised value offer from the employer or relocation service company.
Home Purchase Programs Definitions: Buyer Value Option (BVO)
The Buyer Value Option, which is a variation of the Amended Value program, is in wide use in relocation home purchase programs.
In a “standard” BVO, the employer does not obtain appraisals of the home nor does it make an initial or guaranteed offer to purchase the home, although it is always understood that the employer intends to purchase the home once the employee has tested the market and, in doing so, received a purchase offer. The employee proceeds to market the home. Broker selection, marketing assistance, home marketing advice, and so forth, are specified in the company policy, and generally would not be different for this home purchase option than for any other option. When the employee selects a broker, the employee’s listing agreement with the broker must include the standard exclusion clause to avoid triggering income to the employee in the amount of the broker commission when the home is sold to the employer.
Once the employee has obtained an offer, that offer establishes the value (the “buyer value”), and that is what the employer offers the employee for the home. Clearly, that value, established by an actual offer from an unrelated buyer, will be respected as fair market value. Thereafter, the process proceeds just as it would in an Amended Value purchase: An unconditional, non-contingent offer is made by the employer to the employee; the employer then attempts to negotiate and close its own sale to the buyer who made the outside offer.
If the employee does not obtain an outside offer within the initial marketing period (which may vary in duration-some programs do not specify a marketing period at all), procedures vary. In some programs, a new marketing period is established, and the process simply is repeated until an outside offer is obtained. In others, at some specified time, the company will convert the transaction to a regular purchase, obtain one or more appraisals, and buy the home from the employee. The latter procedure, sometimes called a “delayed Amended Value,” is much to be preferred from a tax standpoint.
CMA The best method available to home sellers to learn their home’s current value so they can select the best sale price is a CMA, or Comparative Market Analysis. CMA is the term real estate agents use when they conduct an in-depth analysis of a home’s worth in today’s market.
GBO guaranteed buyout program At the same time, only 25% of companies offer a traditional guaranteed buyout program (GBO) exclusively— down from 34% in 2008. The majority of companies that tier home sale benefits reserve the GBO program for senior-level current employees and new hires, and provide the buyer value option (BVO) to new hires and mid-management.
Home Marketing Controls Among companies that use a GBO program, the vast majority (43%) order appraisals immediately. This shows that companies increasingly understand how crucial the objective, qualified opinion of an appraisal is to developing a marketing plan and establishing realistic expectations among transferees. The fact that the vast majority of companies (75%) now require a minimum amount of time to market the home before employees can accept the guaranteed offer is another sign of employers taking greater control of the home marketing process to minimize relocation costs.
RC Relocation Consultant Usually refers to the manager of a relocation process, can be an individual, a relocation company or freelance specialist
RFI Commonly used phrase describing a potential client’s ‘Request for Information’. Usually a preliminary to receiving a RFP
RFP Commonly used phrase for a ‘Request for Proposal or Pricing’. A form of tendering out proposed business in order to identify and choose suitable providers
RFQ Request for Quote – this is essentially the same as an RFP
RMC Relocation Management Company (RMC) These are large specialist companies who advise and manage global moves for multinational companies
TCO Total Cost of Ownership
Corporate Housing Dictionary – We will work to keep our on-line Corporate Housing Dictionary up to date. Please book this page for later reference.