Does the management fee go up automatically every year?

Most agreements contain an escalator, and most Boards do not price it. Three or four percent compounding is typical, sometimes tied to CPI, sometimes a flat number that has nothing to do with inflation.

Run the arithmetic before you compare proposals. A $4,000 monthly fee escalating at four percent is $4,326 in year three, and the three-year total is about $149,800 rather than the $144,000 a Board reading the monthly number would assume. Against a competitor at $4,150 with no escalator — $149,400 over three years — the apparently cheaper proposal is not.

What to ask for: a cap, CPI-indexing rather than a flat rate, or a fixed price for the initial term with increases only on renewal. All three are commonly granted when asked and almost never volunteered.

Also check whether the escalator applies only to the base fee or to the whole ancillary schedule. Those are very different agreements, and the second one is the one you want to catch before signing.