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COLLECTION PROCESS Introduction

February 23, 2011

Effective February 23, 2011, we are changing our approach to accounts receivable and the collection of outstanding amounts. Community Managers are directly responsible for charging of all amounts due, pursuing collection of said amounts, negotiating payment amounts/terms, documenting status of collections and ultimately determining when an account should be considered uncollectible and sent to Hunter Warfield (HW). As part of this overhaul, the ONLY ACCOUNTS THAT WILL BE IMMEDIATELY SENT BY THE SITE TO HW ARE SKIPS OR EVICTIONS WHEN THE RESIDENT(S) HAS PHYSICALLY VACATED OR BEEN REMOVED FROM THE APARTMENT (see Renewal and Notice to Vacate Process Section F Page 16 “Skip Process”). All other accounts shall remain on “the books” until the Community Manager determines an account is not likely to be collected. The Operations Manager will oversee this transition and will be available to answer all of your questions, assist with negotiations, and continue to serve as liaison with Hunter Warfield. The general change is that, with the exception of processing the Final Account Statement (FAS), nothing will be “automatic” anymore (i.e. timeframe of collection letters, automatic write-off in OneSite, automatic transfer of data to HW 30 days after move-out, etc.). Community Managers will now manage each and every current and former resident account and resident accounts under eviction prior to physical move-out until such time as they determine the probability of collecting is not likely.

The Operations Manager is readily available to help with any of the above.

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COLLECTION PROCESS Current Residents

February 23, 2011

Current Residents (no notice given): Follow all policies as spelled out in Apartment Lease Contract.

Apply late charges

Send notice(s) as per Benchmark policy and State laws

No negotiation of charges due to fair housing

File eviction on first date legally allowed. Current Residents (notice given): If resident(s) has given notice (move-out less than 45 days), you may offer a promissory note for all monies owed to date (early termination, lack of notice, unpaid rent, concession recovery, etc.) subject to adjustment after move-out.

1. During the initial conversation of move-out with the resident(s) who gives notice and requests payoff amount, all current and future charges should be calculated and quoted to the resident(s).

2. The following negotiation of charges should not be discussed with the resident(s) unless the resident(s) has stated they cannot or will not pay.

RENT charges can NEVER be negotiated…

If Resident agrees to pay the…

MAXIMUM Amount that can be waived

Minimum Payment Amount/Month

Maximum # of Months

entire balance within 30 days

100% of concession recovery or 100% termination/insufficient notice fees

Payment in Full before move-out

Within 30 days

entire balance within 31-90 days

50% of concession recovery or 50 % termination/insufficient notice fees

$50 – first payment due before move-out

3 Months

entire balance within 91 days-12 months

20% of concession recovery or 20% termination/insufficient notice fees

$50 – first payment due before move-out

12 Months

For consideration of anything outside of these terms, contact Operations Manager. The Operations Manager is readily available to help with any of the above.

3. All negotiated charges must be edited or reversed in OneSite to reflect the correct amounts per

the agreement prior to completion of the FAS. (If unsure how to reverse, contact the Help Desk).

4. If the resident(s) is pending move-out, the following statement must appear on the promissory note: “This agreement is subject to change upon move-out and completion of the Final Account Statement.”

5. A Promissory Note (see page 7) must be signed after terms have been agreed upon and signed by the resident(s) and Management.

Method of payment: Checks (if resident(s) has no NSFs within the last year), money orders, cash, RentPayment.com.

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Once the Resident(s) Moves Out:

1. Ensure all charges are correct on the resident’s ledger. 2. Complete the FAS. 3. Do NOT write off the resident’s balance. If a promissory note for the resident(s) existed prior to

move-out, update promissory note to reflect all remaining balances as they appear on the FAS. Changes can be made on original promissory note and must be initialed by resident(s) and Management.

4. Click on “Special/Collections Status”. 5. Check the “Payment Agreement (Formers Only)” box. If the resident(s) is on a payment

agreement, it is extremely important to check this box.

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COLLECTION PROCESS Former Residents February 23, 2011

Former Residents (Prior to Going to Collections): The site staff should make every attempt to contact the former resident(s) using the emergency contact, former resident’s work and cell phone numbers, text, email, mutual friends, etc. to discuss the resident’s remaining balance owed and payment arrangements. If attempts to contact the resident(s) have failed and a guarantor exists, the guarantor should be contacted. If there is a guarantor on the account, they should be copied on all written correspondence. Successful Contact is Made: When contact is made with the former resident(s) or the former resident(s) initiates the desire to pay the debt, the following negotiations can be made:

1. During the initial conversation with the former resident(s), all outstanding charges should be discussed with the resident(s).

2. The following negotiation of charges should not be discussed with the resident(s) unless the resident(s) has stated they cannot pay or will only pay if amount is negotiated.

RENT charges can NEVER be negotiated…

If Resident agrees to pay the…

MAXIMUM Amount that can be waived

Minimum Payment Amount/Month

Maximum # of Months

entire balance within 30 days

75% of concession recovery or 75% termination/insufficient notice fees

Payment in Full Within 30 days

entire balance within 31-90 days

50% of concession recovery or 50 % termination/insufficient notice fees

$50 3 Months

entire balance within 91 days-12 months

20% of concession recovery or 20% termination/insufficient notice fees

$50 12 Months

For consideration of anything outside of these terms, contact Operations Manager. The Operations Manager is readily available to help with any of the above.

3. All negotiated charges must be edited or reversed in OneSite to reflect the correct amounts per

the agreement prior to completion of the FAS. (If unsure how to reverse, contact the Help Desk).

4. A Promissory Note (see Page 7) must be signed after terms have been agreed upon and signed by the residents(s) and Management.

5. Complete the FAS. 6. Do NOT write off the resident’s balance. 7. Click on “Special/Collections Status”.

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8. Check the “Payment Agreement (Formers Only)” box. If the resident(s) is on a payment agreement, it is extremely important to check this box.

Method of payment: Checks (if resident(s) has no NSFs within the last year), money orders, cash, RentPayment.com. If all attempts to contact have failed, promissory note is not adhered to, and/or Community Manager feels balance is uncollectible, follow procedures on Actual Write Off (Page 12).

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COLLECTION PROCESS Processing the Final Account Statement (FAS)

February 23, 2011

After completing the Move-Out Procedures (see Renewal and Notice to Vacate Process Section F Page 12) and all charges are posted to OneSite, the resident(s) should be moved out of the system and the Final Account Statement completed. DO NOT FINALIZE FAS until all charges are known (i.e., cost to remove carpet stains, patch drywall, etc.). Once all costs are posted to OneSite, proceed with finalizing and printing FAS. Mail FAS to Executive Administrative Assistant at corporate office in Tuesday/Friday corporate package. If monies are to be refunded to resident(s), the check must be made payable to ALL leaseholders. In OneSite, this can be completed by using the “Name” field and the first “Address” field, if needed. Each field holds 32 character spaces. If monies are owed by resident(s), proceed as follows:

Upon completion of the Move-Out Procedures, all charges (actual or estimated) should be posted to OneSite, resident(s) should be moved out of OneSite and FAS should be produced. The FAS MUST BE FINALIZED WITHIN 12 BUSINESS DAYS OF MOVE OUT.

Mail FAS along with the Initial Letter (see Exhibit G-1), Promissory Note (see Page 7) and Credit Card Authorization Form (see Charge and Collection Process – Section E Exhibit E-1). Initial Letter requests payment within 10 days of the date of the letter.

Please check your state statutes.

UPDATE DELINQUENT OR PREPAID COMMENTS ON YOUR DELINQUENCY AND PREPAID REPORT. ALL FASs AND ADDITIONAL ITEMS SHOULD BE MAILED TO RESIDENT(S) WITHIN 12 BUSINESS DAYS OF MOVE OUT. The FAS and Initial Letter should be sent to resident(s) per state guidelines. It is important to note some states require the FAS be sent via Certified Mail. The Return Receipt Request is not always required. In some situations, the FAS may be returned due to incorrect or unknown address. If this is the case, follow procedures in the Former Residents (Prior to Going to Collection) section (see Page 4).

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COLLECTION PROCESS Promissory Note February 23, 2011

Current residents on notice with a move-out date less than 45 days and former residents are offered the opportunity to pay outstanding balances over a period of time. A Promissory Note MUST BE COMPLETED IN FULL. See numbered Promissory Note (see Exhibit G-2) when referring to the following directions. A sample Promissory Note is also included (see Exhibit G-3).

1. This is the date the Promissory Note was initiated. 2. Name of resident(s) who is responsible to pay on the note. 3. Resident’s apartment number. 4. Insert resident(s) name here. Again, all responsible parties must be listed. 5. Insert legal name of apartment community. 6. This is the total dollar amount owed for the first charge. 7. Insert date that payment should have been made by. 8. Insert name of specific charges, such as rent. 9. Insert dollar amount owed for each additional charge. 10. List each additional charge separately; for example, damages, late fees, etc. 11. Insert the number of payments the resident(s) has to make to bring the account to zero.

Remember, no more than twelve monthly payments without Operations Manager approval. 12. This is the minimum dollar amount to be paid each month. 13. Insert the day of the month payment should be made. 14. This is the day, month, and year as to when the first payment should begin. (Example: 15th day

of August 2002). 15. This is the day, month and year that the promissory note was signed by the responsible parties. 16. All responsible parties must sign the note. 17. Community Manager must sign the note.

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COLLECTION PROCESS No Response to Initial Letter

February 23, 2011

Every effort should be made to collect outstanding monies prior to involving collection agency. If there was no response to Initial Letter and the Promissory Note, Collection Letter #2 (see Exhibit G-4) should be sent approximately ten (10) days after FAS was mailed. This letter notifies the prior resident(s) he/she has seven (7) days to pay from the date of the letter. Promissory Note should be sent again with Collection Letter #2. These letters are the formal aspect of collections, however, you can and should employ any of the following in your efforts to collect funds or execute a Promissory Note:

1. Contact via telephone: home, cell or work number. 2. Contact occupants, guarantors or emergency contacts. 3. Deliver the proposed Promissory Note to their place of business. 4. Text or email leaseholders, emergency contacts or guarantor.

These methods should be used immediately after FAS is finalized. Making contact is critical to collecting. If there is a guarantor on the account, they should be copied on all written correspondence. When there is a guarantor, prior to writing off an account and turning over to HW, the final notice to the guarantor (see Exhibit G-5) should be sent. Wait the full 14 days prior to turning over to HW if you receive no response or payment.

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COLLECTION PROCESS Submission to Collection Agency

February 23, 2011

Non-Skips OneSite will NO LONGER AUTOMATICALLY send a resident’s balance to collections 30 days after move-out. The Community Manager now determines when an account is deemed uncollectible. Skips and Evictions Completed If you have a resident(s) who skipped or an eviction that has been completed (resident(s) has vacated), that skipped or evicted resident’s balance should be sent to the collection agency after the FAS is completed:

Bill the skipped resident(s) all applicable charges (i.e., cost to remove carpet stains, patch drywall, etc.).

Once all costs are posted to OneSite, proceed with finalizing and printing FAS. Mail FAS to Executive Administrative Assistant at corporate office in overnight package. The FAS MUST BE FINALIZED WITHIN 12 BUSINESS DAYS OF THE SKIP OR EVICTION.

Click on the “FAS” tab.

Click on the “More” link and select “Write Off”.

The following box appears. Click on the “Write Off” box to write off the balance.

Click on “Special/Collections Status”.

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Check the “In Collection Status” box.

OneSite will send the skipped resident’s balance to collection agency when the property date is forwarded.

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COLLECTION PROCESS Collection Agency

July 1, 2010

We are presently utilizing Hunter Warfield as our collection agency. They are located at 2620 Woodland Corporate Blvd., Tampa, FL 33614. 888-HUNTWAR (toll free 888-486-8927) Request Client Services Department for resident accounts. 866-HUNTWAR (toll free fax 866-486-8927) Email address for resident account – clientservices@huntwar.com

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COLLECTION PROCESS Actual Write-Off February 23, 2011

Once you have exhausted all efforts to collect (letters go unanswered, telephone calls not returned or you are told flat out they refuse to pay), then you should proceed with the write-off process as outlined below.

Click on the “FAS” tab.

Click on the “More” link and select “Write Off”.

The following box appears. Click on the “Write Off” box to write off the balance.

.

Click on “Special/Collections Status”.

Check the “In Collection Status” box.

OneSite will send the skipped resident’s balance to collection agency when the property date is forwarded.

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COLLECTION PROCESS Payment at Community by Previous Resident(s)

February 23, 2011

The community should accept any payments received at the site by prior resident(s). If it is a partial payment for someone who has not been turned over to HW, attempt to have him or her sign the Promissory Note. If the previous resident(s) has been sent to HW, accept payment. Payments from individuals whose account IS with Hunter Warfield, proceed as follows:

If paying full amount, go to the HW website and verify amount owed.

Partial payments should also be accepted.

Call or email collection agency with the following information: - Debtor name - Social Security Number or debtor number - The amount - Date of payment.

Do not post payment in OneSite.

Send all checks/money orders to Cash Manager at Corporate Office. Payments from individuals whose account is NOT with Hunter Warfield, proceed as follows: Post the payment in the Final Account Statement:

1. Locate the resident’s account in OneSite. 2. Click on the FAS Tab. 3. Click in the Edit link.

4. Click on the button.

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5. Enter the payment information.

6. Click on to save the payment. 7. If after the payment is posted and the resident(s) still has a remaining balance,

UPDATE DELINQUENT COMMENTS ON YOUR DELINQUENCY AND PREPAID REPORT.

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COLLECTION PROCESS Incomplete Account Listing on Collection Agency Website

February 23, 2011

Once a file is in collection, the following needs to occur:

Access the collection agency website at www.huntwar.com every Friday: - Client log in – box left enter password - Community ID - C number: This can be provided by the collection agency or call Residential Operations

Manager - Click enter. Page comes up.

Verify collection agency has all pertinent information to start collection process.

Review Incomplete Account Listing for your community. Found on opening page.

Fax any requested information for each account(s) to collection agency. Fax number is provided with the request. If you cannot provide information, send email to clientservices@huntwar.com stating you are unable to provide information requested.

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Exhibit G-1

COLLECTION PROCESS Initial Letter Accompanying FAS

February 23, 2011

(date) Dear , We would like to thank you for your residency at our apartment community. We hope your time with us was enjoyable. Attached you will find your Final Account Statement that reflects a balance owed of $ . Please remit payment within ten (10) days to satisfy your account. If you dispute this amount, you must notify us in writing within ten (10) days from the date of this letter. If you are unable to submit full payment and would like to set up a payment plan, please sign the enclosed promissory note and return it to our office no later than ten (10) days from the date of this letter. For your convenience, we do accept credit card payments for a nominal fee and have enclosed an authorization form. You may also visit Rentpayment.com to make payment online with either your credit card or debit card. If our office does not receive payment in full or a signed promissory note within ten (10) days of the date of this letter, we will consider all appropriate remedies permitted by law including reporting the debt to the major credit bureaus. We hope that these actions will not become necessary. Thank you in advance for your cooperation. We look forward to receiving your payment. Sincerely, Community Manager XYZ Community XYZ Community Address XYZ Community Phone Number

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Exhibit G-2

COLLECTION PROCESS Promissory Note February 23, 2011

Date: 1 Name: 2 Apartment: 3 This agreement is entered into by and between 4 , hereinafter referred to as “Resident”, and 5 , hereinafter referred to as “Management”. Whereas, the Resident and Management fully intend to be bound by this Agreement; and now, therefore, in consideration of the mutual covenants contained herein and other good and valuable consideration, the parties hereby agree as follows:

1. Resident acknowledges he/she owes Management the total sum of $ 6 as of 7 for 8 , and total sum of $ 9 for 10 .

2. To repay such debt, Resident agrees to make 11 monthly payments of $ 12 to Management each month, on the 13 day of the month. First payment to begin on 14 day of 14 , 20 14 .

3. If the Resident fails to make a payment on the designated date, Management will immediately forward the Resident’s information to the collection agency at the end of business that day.

Executed this 15 day of 15 , 20 15 . 16 17 Resident Management 16 Resident

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Exhibit G-3

COLLECTION PROCESS Sample Promissory Note

February 23, 2011

Date: January 1, 2010 Name: Suzy Chapstick Apartment: 1-102 This agreement is entered into by and between Suzy Chapstick, hereinafter referred to as “Resident” and SRK Beechwood Associates Limited Partnership, hereinafter referred to as “Management”. Whereas, the Resident and Management fully intend to be bound by this Agreement; and now, therefore, in consideration of the mutual covenants contained herein and other good and valuable consideration, the parties hereby agree as follows:

1. Resident acknowledges she owes Management the total sum of $900.00 as of January 1, 2010 for rent, total sum of $500.00 for damages and total sum of $100.00 for late fees.

2. To repay such debt, Resident agrees to make 3 monthly payments of $500.00 to Management each month, on the 1st day of the month. First payment to begin on the 1st day of February 2010.

3. If the Resident fails to make a payment on the designated date, Management will immediately forward the Resident’s information to the collection agency at the end of business that day.

Executed this 1st day of January 2010. Resident Management

Resident

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Exhibit G-4

COLLECTION PROCESS Collection Letter # 2

February 23, 2011

(date) Dear : Our records show you continue to owe us a balance of $ , as explained to you in the itemized Final Account Statement mailed to you on (insert date). This balance is delinquent. Your failure to respond to our notice within the next seven (7) days from the date of this letter forces us to seek other means of collecting the balance owed. Accordingly, we will pursue all appropriate remedies permitted by law, including reporting the debt to the major credit bureaus. Section [insert section #] of your Apartment Lease Contract provides any cost of collection, including attorney’s fees and court costs, will be your responsibility. For your convenience, we have attached a copy of a proposed Promissory Note for you to execute if you wish to pay over time. We also accept credit cards. Please visit Rentpayment.com. Sincerely, Community Manager XYZ Community XYZ Community Address XYZ Community Phone Number

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Exhibit G-5

COLLECTION PROCESS Guarantor Letter February 23, 2011

(date) Dear , As you are aware from previous correspondence you were copied on, (name of residents) continue to owe (legal name of the community) $ (total amount) as it relates to their residency at our community. As the guarantor on the Apartment Lease Contract dated (date lease executed), you are equally responsible for this balance. Therefore, please remit $ (total amount) to the address below within 14 days of the date of this letter to fulfill this obligation. If we do not receive payment in full, your account will be turned over to our collection agency and the outstanding balance will be reported to the credit bureau. Thank you in advance for your cooperation. We look forward to receiving your payment. If you have any questions, please contact me at the number below. Sincerely, Community Manager XYZ Community XYZ Community Address XYZ Community Phone Number