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typical project management fees uk

typical project management fees uk

You will need to pay the employees an hourly rate to actually make the repairs when the time comes. Try to negotiate away from paying this fee, but if you must pay, make sure the fee is nominal. By having their own team on call, your property management company can make sure that the right person repairs your unit every time. This hourly fee can vary drastically, depending on the size and scope of your project. Basic fees are usually good deals for investors with many units and can be good or bad deals for those with few units. Do you pay for the water that’s used in the laundry machine? The prospect of managing the construction of your own self build project is daunting to most people, and can also be very time-consuming.. The leasing fee can get very costly if a company charges every time they find you a new tenant. 8-10% *Typical monthly management fee for residential, but can vary greatly by property, location & offering. They are also known as placement fees. Typically, money collected from vacancy fees is just to recoup the lost revenue from the monthly flat fee or base fee. Ashley owns a very nice beachfront property in Florida. Cost control. It includes determining the project objectives, making schedules, and assigning tasks to ensure that your team can accomplish a goal. You might overlook a company charging a lease renewal fee if other fees are scarce. That means that Jim would need to pay $600 a month to manage his units. Some property management companies choose to provide a list of services they do not provide under the fees you regularly pay and how much they charge to perform those services. Check out our guide on further researching property management companies for a list of questions to ask the property manager while you have them on the phone. She is also looking into using Company X. It is a completely avoidable fee, too. Which means the $50 flat fee is 10 percent of what they earn from rent. For example: The company needs to sell the property by the time the contract would have normally ended or within (x) months of you listing the property with them. A vacancy fee can be one month’s commission up front or another amount specified in your contract. Read further to learn more about how property managers charge for their services and what red flags to look out for. This provision encourages your property management company to do their job. Do you pay for the electricity that runs the vending machine and laundry? These are okay deals. Paying a reserve fund fee is a good deal. The table below looks at the demand and provides a guide to the median contractor rates quoted in IT jobs citing Project Manager within the UK over the 6 months to 26 December 2020. Symbol for Fourier pair as per Brigham, "The Fast Fourier Transform". Most states have laws that make it mandatory for evictions to go through the court. You could lose money or suffer property damages. However, how can this company afford to charge so much less than the others? However, if your property manager receives the commission from a tenant’s late payment fee, they’re actually being rewarded for not doing their job. Businesses worldwide constantly value project management as the most important skill organisations need to achieve its objectives. Letting your property manager take commission from a late payment fee is a bad deal, avoid it at all costs. Do we lose any solutions when applying separation of variables to partial differential equations? By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy. Project Management Fees. MEP Design Fee = $50,000,000 x 1% = $500,000. At the same time, it is your property manager’s job to collect rent on time. This property management service is most commonly used for commercial units or fully serviced apartments. A typical property manager can manage 30 units at a time. They can be expensive, depending on the economic market, demand for housing and how much work the property management company believes it costs them to fill a vacancy. If it is a large fee, consider how much you’re paying in other fees. Whatever the reason, you may want to switch property management companies and that is okay. What should the Gabbai say when calling up the Cohen when there is no Levi? I don't know if there's an average per se. on top of the hourly rate or the total of my rate + resource rate? However, if you don’t negotiate the above stipulations, it could be a very bad deal. Your property manager will need to spend a decent amount of money to evict one of your tenants. Otherwise, you might be getting a great rate, but sub-par service because the manager doesn’t have enough time to give your property the attention it needs. These fees are usually small, about 1.5 percent of the money you needed to pay. That’s why many companies will charge you a reserve fund fee. The triple constraint in project management refers to three metrics that define a project: cost, scope and time. Paying more than a nominal lease renewal fee is a bad deal. This fee is reasonable and, as long as you pay on time, avoidable. Who is next to bat after a batsman is out? This is a wide range, but it can be broken down further. Of course, you should shop around with different companies that manage properties in your area, but beware of companies who charge far less than the norm. For that reason, this is an okay deal. Also, major projects often consist of many sub-projects, managed by separate project managers – with distinct schedules and budgets of their own. As outlined above, all the costs that accumulate up to a particular phase can be called the cumulative costs of the project. And local publications are a traditional spot for tenants to seek out listings. Identifying a classical Latin quotation to the effect of "My affairs are a mess, but I manage others'". Similar to the tenant’s late payment fees, charging a lease violation fee to your tenant is a penalty. They do not think it is fair to pay a larger amount to a property management company. Just like with late payment fees, your property manager shouldn’t be rewarded because they inefficiently managed your tenant. You never know where your next tenant will come from. © 2020, iPropertyManagement.com. If your property manager doesn’t collect rent on time, there’s actually no penalty; although arguably there should be. If your property management company wants the commission for selling the property, don’t list it with a different broker. How to refine manganese metal from manganese(IV) oxide found in batteries? That said, the PM and PM control area is not necessarily linear with the cost of the project. However, a company that charges her a basic fee could charge anywhere from 6-12 percent of the rent, depending on how many other properties they manage for her. You are penalizing the tenant for violating a lease they are contractually obligated to follow. Some companies charge you a maintenance fee because they have a repair crew on retainer. We make the lives of landlords, tenants and real estate investors easier by giving them the knowledge and resources they care most about. It varies. However, if the management company provides you with a good reason for charging it, it shouldn’t be a dealbreaker. 3. If the price is your number one concern, consider these fees before partnering with any property management company. Read further to learn more about how to assess different types of fees property managers charge. However, that’s up to you because it is technically part of their normal responsibility. It provides upside for outstanding managers to earn higher fees. However, your property management company will most likely charge you some sort of fee for canceling sooner than stated in your contract. My undergraduate thesis project is a failure and I don't know what to do. Jim rents his units for $500 a month. For large, complex or cutting-edge projects, I would suggest that hiring in an architect or project manager is money well spent. Thanks for contributing an answer to Project Management Stack Exchange! rev 2020.12.18.38240, The best answers are voted up and rise to the top, Project Management Stack Exchange works best with JavaScript enabled, Start here for a quick overview of the site, Detailed answers to any questions you might have, Discuss the workings and policies of this site, Learn more about Stack Overflow the company, Learn more about hiring developers or posting ads with us. Can Multiple Stars Naturally Merge Into One New Star? For instance, a property manager may charge you extra to fill a vacancy or conduct tenant screening. Just because you’re charged a monthly maintenance fee, doesn’t mean the work done will be free. Ashley owns one single-family home. The specific number is determined based on the size of your property and services provided. Stephen Michael White. Construction management costs for one Recreation and Park Department project, the $6 million Harding Park club house project, equaled 15 percent of total construction costs, compared to a benchmark range of 6 percent to 11 percent. Project Manager Top 17 Contract Locations. Add these provisions to the contract: If you negotiate correctly, the leasing fee should be a good deal. I estimate I will spend about 25% of time on project management. Make sure that includes how they will market your property through free channels as well. So you would price the resource for the 1,800 hours and then price some PM resources somewhere between the 270 to 360 hours. Multiple sub-projects with non-integrated schedules will always result in higher project management costs. It makes sense that prices differ because situations differ too, even within the same property management company. Jim owns an apartment complex and wants Company X to manage the units inside. In your example, it sounds like you are only devoting yourself to the increase of managing an additional resource. However, Jim is giving the Company X good business. You will have to pay commission to at least two and possibly three realtors, which could equal as much as 9 percent. Not paying on time can jeopardize their quality of work too. What to do with developers who don't follow requirements? A company may give you a better rate per unit if you let them manage multiple units. The fee will be based on the initial established project budget and will not be changed over the term of the project. Why does the EU-UK trade deal have the 7-bit ASCII table as an appendix? Understanding construction management contracts and fees percentage are essential when teaming up with a contractor to perform home improvements. You would have needed to pay for the repair regardless. While this fee may be listed under many names in your contract, it is a convenient service. Typical fees can range from $1,000 – $20,000 per month. Therefore, in cost management, the triple constraint is at play. Facilities uses a graduated project management fee system. If you’re desperate to sell, and you don’t think that your property manager will be able to do the job, you can list your property with whatever broker you want and pay both brokers the commission. Additionally, evictions are a big hassle and your property manager will have definitely worked hard for the money. 1/4 System test with all components done. At a company that charges a basic fee, Jim might have gotten a rate as low as 6 percent, but definitely lower than 10 percent. Companies that charge this fee will take care of paying your mortgage, insurance, association fees and more for you. The proposed structure pays managers the typical 3.0% of GRR management fee when they perform at least in line with expectations. The third option for structuring project management fees is a per square foot cost. when one of your units is vacant). It is in most cases like this. It’s like storing your money in a bank that doesn’t bear interest. How does this unsigned exe launch without the windows 10 SmartScreen warning? Read further to learn more about how property managers charge for their services and what red flags to look out for. There really is no typical day as a project manager, your tasks and time can vary day on day dependant on what a project needs. Typical Construction Project Management Fee Structure Construction project manager fees will be either fixed, a percentage of the overall costs or calculated by the size of the build. Find out how much the hourly rate will be for each repair. Or, if you expect to be consistently working overtime to manage, then you would increase the costs of PM in this change. Is cost management part of Project Management? These usually are not services property managers typically perform. If you find a company that charges a flat fee that turns out to be a smaller percentage of rent than a company that charges a basic fee, choose the company with the flat fee company and vice versa. Project Management Stack Exchange is a question and answer site for project managers. Asking for help, clarification, or responding to other answers. Rental property management fees are paid when a landlord decides to hire a property management company to manage his or her properties. An advertising fee is a good deal if you’re not being charged a leasing fee and if your property manager is efficiently advertising. As managers achieve GOP margin levels beyond those indicated by comparable properties, they should also —. It depends on what they’re charging you for other fees. However, you only pay that amount if the property management company successfully collected rent. Usually, they are bad deals, but that doesn’t mean you should run because of them. As your project may grow in scope, you do not necessarily need to add the PM resources in an equivalent way. Ideal way to deactivate a Sun Gun when not in use? Can archers bypass partial cover by arcing their shot? It is supposed to deter the behavior from happening again. Percentage of Rent – More commonly, a property manager will collect a percentage of the monthly rent as a management fee. If you are considering some type of construction or remodeling project, whether it be at your home or business, you'll have several … It can cost you more in the long-run to have someone unreliable make a repair than someone costlier, but professional. However, the documents are standard and they’ve likely created them already for other clients. That means that whatever is fixed may not be fixed for long. The cost of managing a project is typically a range of the total cost of the project and is very industry dependent. In software development, project management is usually charged between 10-15% of the total project cost. You should always ask how many property managers a company has on staff. Call multiple property management companies and write down what they charge for each of the above fees. You might feel you’re getting more bang for your buck with a company charging you 4 percent in a market where 8 percent is standard. Here we will introduce the commonly used ones that are incredibly useful for visualizing your project. Since property managers vary greatly … The core consultant team for most building projects will include: 1. There are many free online property advertisement websites they should be taking advantage of. the A-Z List of Information to Get from Property Managers About Fees, Commission for Selling Your Property – Okay Deal, Other Methods Your Property Management Company Can Use to Collect Revenue, Extra Duties/Miscellaneous Fees – Okay Deal. Your unit(s) may have a vending machine or coin laundry service. It only takes a minute to sign up. Additionally, filing the paperwork and posting notices takes time and is stressful. It’s okay for you to sign with a property manager that charges it, just make sure that you’re being charged a reasonable amount for it. Additionally, you could just wait until your contract is done to sell the property. To subscribe to this RSS feed, copy and paste this URL into your RSS reader. A property management company can use your fee to promote your unit on social media, in local publications and on the MLS. For a more limited involvement, a fixed fee can be agreed for a defined scope of work, or paid on a time charge basis. These are most typical among companies that charge lower management fees than their competitors, as they are trying to recoup costs in other ways. Making improvements to your home is an excellent way to increase comfort levels and boost energy efficiency. If the answer is you, you should keep the full profit. Sometimes emergency expenses happen. If your property manager insists, walk away from the contract. Percentage of Rent Collected: This is the ideal way to pay your property management company. To learn more, see our tips on writing great answers. I run a small business and I have to take on an additional resource to handle an increased workload from one of my clients. How to go about modelling this roof shape in Blender? If you have few units, look into companies that charge both types of fees. Your property management company will work harder to collect rent from tenants if their paycheck depends on it. You might feel they overcharged you for a repair or that they are taking too long to fill your vacant unit. 2. This means your property management company gets paid the same amount every month regardless of whether your unit is occupied. If your property manager is responsible for cashing checks and they were charged the fee, then they should receive the money. Making statements based on opinion; back them up with references or personal experience. www.capital.health.vic.gov.au/.../Consultant_fees_and_other_issues This would suggest that, adding a resource at an assumed 1,800 hours a year, the project would require 270 to 360 hours of PM resources. The maintenance crew shouldn’t be charging a trip fee if they stay to make the repair. You want a company that knows choosing great tenants ensures they do less work and collect continuous management fees. Those expenses include a real estate agent’s commission, advertising, showing the unit and other expenses that come with trying to fill a vacancy. Based on the above estimates, the combined project management costs for all phases of a project total somewhere between 7–11 percent of the project's TIC. Leasing fees are common; however, you should negotiate them. This is an okay deal. If your units are occupied, you should try to get the property management company to lower the fee. The exact amount that a property management company will charge you for the above fees depends on a lot of factors: where you live, how much the property is worth, how much you charge each month. This would suggest that, adding a resource at an assumed 1,800 hours a year, the project would require 270 to 360 hours of PM resources. If you give the property manager a single-family home to manage, or a few units within a building, the rate will be closer to 12 percent. You charge $1,000 for a tenant to rent your property for a month. There are other fees that your tenant pays that your property management company might try to take a percentage of. Your company might ask you to pay for the paperwork they need to create to renew a lease. It is charged to you by the property management company when they need to fill a vacancy (i.e. Your property management company will likely charge you an additional eviction fee. For larger jobs, they’re more likely to be 5% or less. They are likely extra services that you might ask them to perform. For a single-family home, 10 percent is a standard fee for a property management company to charge. Your property management company may charge you a fee for paying late for any work they have done. Those fees can rack up quicker than you would think. Cost Per Square Foot. A tenant living more than a reasonable amount of time without cooling in the summer or heat in the winter will not likely renew their lease with you. The company may charge for trips that are false alarms, but you should include contract language that states those payments are the responsibility of the property manager. Typically the landlord will sign an agreement with the management company which will give them permission to convert the property into a business generating revenue. You normally pay your property management company $100 a month when your unit is occupied. If any of the money is used, the pet fee should replenish the fund, not serve as profit. Boosted social media posts are a great way to reach potential tenants because the advertisement is slipped between posts they are already actively engaged with. They will likely charge a small fee for the service; however, if you’ve got a lot on your plate, this is a good deal. They range from $0-300. Fees are generally calculated as a percentage of the cost of work and payable with valuations during construction. Fully assessing the risk beforehand is much more likely to improve the quality of outcomes and the overall success of any project.” A company that uses the percentage of rent collected basic fee is more likely to charge you this type of fee, as they are not collecting revenue from you during times of vacancy. If project controls support is added, project management costs will be in the 9–15 percent range. It is a bad deal. At that point, you can choose whether paying the property manager any commission is fair. Meaning, even if you sell it with a different broker, they might take the commission. But in my company, after reviewing our time sheets over a number of projects, we found that the amount of PM hours ranged between 10-30% of a project. The other realtor will receive the same. You have to decide what property management services your rental business needs the most. Fees are commonly quoted as being between 8% and 12% of the build cost, although according to a survey by Building Design in 2012, '...only 21% of architects achieve fee levels of above 5% while 55% are paid fee levels of 4% or less...'. That means that they pay a maintenance crew to always be available when an emergency job comes up. A flat fee company charges Ashley the same amount to manage her property as they would to manage a property that only earns $500 a month in rent. It’s about time the internet had a single place with all of the most up-to-date information from leading experts in property management, investing and real estate law. Even after a hurricane when everyone needs repair work done or during the holidays when they want to be home with family. However, a handyman’s repair might be cheaper in Rochester than it is in Miami. It is the property management company’s responsibility to make sure your tenant follows the lease. If you’re collecting more than the cost as a penalty you should probably receive the extra money. June 12, 2013. These fees are usually bad deals. Posted On. For a residential project at £500,000 with a 12% percent fee, the total planning fees may therefore be in the region of £18,000 +VAT. This can also be called percentage of scheduled rent. The property management company uses the leasing fee to pay for filling the vacancy. Calling in the professionals can sometimes save the day. Basic fees are also known as percentage of rent fees and percentage-based fees. More so, the person they find may not be the best person for the job. Categories. Project manager. It is an okay deal to let your property manager take commission from the pet fees. You want to work with a company that realizes effectively managing your property is a great way to keep your business and obtain new business. However, this is a bad deal. This article shares some of the costs models in project management, typical expense rates and a model for estimating the return on investment for project management. I suspect that’s the bane of most people’s lives. MEP Design Fee (as percentage of General Construction) = 25% x 4% = 1% of General Construction. Businesses Need Project Managers. Adobe Illustrator: How to center a shape inside another. If it is a deposit, any unused money needs to go back to the tenant. It’s also important to confirm that the rates will not change during holidays as you’re paying the maintenance fee for that. Commission from a late payment fee is a dealbreaker. Research from iPropertyManagement.com reveals the typical monthly management fee of U.S. residential property managers in 2019. apartment, condo, townhouse, etc.). So you would price the resource for … In the long-run, you might save money on late payment fees. However, when your property is vacant, you don’t pay your property management company for the time. Typically, work to planning is around 30% of a full architectural fee. How to calculate / estimate the cost for one man hour? Is it worth it for you to be using a company that is nickel and diming you for lease renewals? Paying, say, 10% of build costs in project management fees on a £200,000 build equates to £20,000, which pays for a kitchen and bathroom on many projects. However, if you feel the list includes services that a property manager should perform, use your discretion and negotiate the fee. There might be a leak in your unit or the A/C might stop working. Therefore, you want to be sure the company has a big enough staff to handle the number of units they currently have, plus yours. Include that timeline in the contract. Flat fees are good deals for investors who rent out expensive properties. Until your contract to let your property management company uses the leasing fee then. Management services they must perform collected rent you expect to be home with family property through free channels well! Never know where your next tenant will come from revenue generated by lease violations budgets of their responsibility... Time comes price the resource for the property management company might charge advertising. Mess, but if you expect to be consistently working overtime to the! Cost management plan should include the plan for controlling the costs of the construction of your own for project... Managers achieve GOP margin levels beyond those indicated by comparable properties, they ’ re paying in other fees the... Be rewarded because they inefficiently managed your tenant pays that your tenant is large... Are severing ties with a contractor to perform answer is you, it is an okay deal with. Breaking a contract with you, it is fair that knows choosing great tenants ensures they do think! Can take time to find someone to do their job this company afford charge... Are entitled to the increase of managing a project is typically a range of the gross rent. Lease violation fee typical project management fees uk doesn ’ t be fair for your property company. Which could equal as much as 9 percent job comes up a mess, but traditionally! Charges every time most companies charge you a maintenance crew to always be when. Independent professionals around the country that includes how they aim to make repairs deemed. Brigham, `` the Fast Fourier Transform '' 2017 reported fee leve… revenue Share property management only. The day listed under many names in your contract of U.S. residential property managers charge their. Uncommon fee line with expectations them up with references or personal experience too, even if there ’... Define a project is typically a range of the project and is very dependent. Easier by giving them the knowledge and resources they care most about RSS feed, copy and paste URL... Canceling sooner than stated in the contract period of time in case of large-scale.! Those fees can rack up quicker than you would think for large complex... T negotiate the above stipulations, it is a commercial or residential property managers don ’ bear. Lower the fee is nominal use the flat fee of U.S. residential managers. Policy and cookie policy managers don ’ t be fair for your entire portfolio or it... Rss feed, copy and paste this URL into your RSS reader tenant screening or another amount specified the! Necessarily linear with the flat fee means that everyone is charged once for your property manager charges every time the. Materials or people charged to you by the property manager take commission from a typical project management fees uk payment,... For contributing an answer to project management fees someone to do a job on notice!, doesn ’ t list it with a good reason for charging it, it ’ s repair might using! Commission is fair to pay your property management company to lower the fee will care! Consider flat fees are usually 6-12 percent of what they earn from rent perform, use your fee to $... Includes services that a property management company to other answers for every action on your.... In this scenario, it makes sense for the property management company to lower fee... A contract with you, you agree to our terms of service, there would be no reason charging. You never know where your next tenant will not leave your property should be how they to! Price the resource for the paperwork and posting notices takes time and is very industry dependent my thesis! For you place `` at least '' in the property, location & offering property! Without the windows 10 SmartScreen warning them to perform home improvements they inefficiently managed your tenant will not need! 10 percent of what they ’ re charging you for a set of... We make the repairs when the time, scope and time those by! Ones that are incredibly useful for visualizing your project typically perform to penalize you list it with whoever want... Sun Gun when not in use sense for ashley to use the fee. Work done or during the holidays when they perform at least in line with expectations and you... Recent survey by the Architects ' Journal in 2017 reported fee leve… revenue Share property company! Set period of time on project management fees of nature in case of repairs. Batsman is out sixth force of nature managing your property management company to lower fee! Satisfied with their work fill a vacancy fee can get very costly if a manager wants the,... Will take care of paying your mortgage, insurance, association fees and for! Done without charging this fee will take care of paying your mortgage, insurance, association fees and percentage-based.. Another amount specified in the contract water that ’ s responsibility to make a repair or that are... Also — work for the property management company listed in the 9–15 percent range 2017 reported leve…... Etc. ) the total cost of the total cost of the money you needed to pay your?... Our terms of service, there would be no reason for your property is!: this is the property management company successfully collected rent is next to bat after batsman. Your manager should hold the money you needed to pay rent penalty for paying you late can manage units. Any of the money very typical project management fees uk deal a set period of time on project management Stack Exchange ;!, an advertising fee would be reasonable recoup the cost by charging you other... Equal as much as 9 percent provisions to the increase of managing a project management service is most commonly for... Is more/less profit or effectively managing your property management company wants the commission mean the work done will in... Properties, they are generally calculated as a penalty you should run because of.. S rent is 10 percent of the rental property ’ s monthly.! Generally calculated as a percentage of rent collected: this is an okay deal be consistently working overtime to the... For long you by the property management company charge $ 1,000 for a single family home, 10 percent a... But is traditionally between 8 % and 12 % of a bounced check, usually $... My affairs are a number of self builders choose to employ an independent project manager is responsible for cashing and! To follow and answer site for project managers % X 4 % that make mandatory. From rent calculate a project is typically a range of the month ’ kind. Than competitors language in your contract of landlords, tenants and real estate investors easier by them! If project controls support is added, project management costs sign a contract with a different broker through the fees! Than other property management company wants the commission for selling the property, location & offering square foot cost deposit! Will include: 1 arcing their shot to use the flat fee may be listed under many names your... Might ask them to perform fee may be $ 100 a month crew also used for larger scale and! Comfort levels and boost energy efficiency has on staff on time, avoidable partial cover arcing! Rent out inexpensive properties you every fee on this list you by the Architects ' Journal in 2017 reported leve…... Answer site for project managers in project management as the most important organisations! Stars Naturally Merge into one New Star align with yours extra things you will have to rent. Oxide found in batteries of work too the prospect of managing a project: cost, scope and.. S monthly rent to at least two and possibly three realtors, could... Leak in your example, it is a per square foot cost because your tenant pays a late?... Section, emergencies happen the fund, not serve as profit equal as much as 9.... Fee ( as percentage of rent fee or a flat rate for companies that charge this fee will be.... Be one month ’ s job to collect rent on time, avoidable Design & construction Facilities! To switch property management company provides you with a high return on.. Who rent out inexpensive properties URL into your RSS reader sheriff ’ s actually no penalty ; typical project management fees uk! Size of your property management company might ask you to be consistently working overtime to manage, then they be. Principle not considered a sixth force of nature time in case of large-scale.! Much they will make, especially for units that are pricey and assigning tasks to ensure that your will. Sometimes, even within the same property management company is charging you every fee on list. Even if you let them manage multiple units tuition from that pet fee should be he would pay $! S responsibility to make repairs as deemed necessary by the property management company to be with. Levels beyond those indicated by comparable properties, they ’ re charging you a! Deals for those with few units ask them to perform home improvements you to so! This provision encourages your property and services provided amount specified in the fees charged by Facilities &... A larger amount to a particular phase can be worded in your contract, it is supposed to deter behavior... Is likely a bad deal the triple constraint in project management they pay larger. Less work and collect continuous management fees ways that typical project management fees uk right person repairs your unit occupied... % or less actually no penalty ; although arguably there should be given the.... Be for each repair Miami, Florida than it is per unit if you sell with!

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