What Is a Property Management Agreement?
A Property Management Agreement is a document that outlines the business relationship between a property owner and the entity or individual hired to manage this property. It covers all the responsibilities of the parties, their legal liabilities, and insurance coverage for the property.
Alternate Name:
- Property Management Contract.
A simple Property Management Agreement will protect your interests if:
- You own a property and wish to retain a company or person to manage the building or apartment;
- You own a property management company and want to have written proof of negotiated terms and conditions with the owner of the property.
You may create a Property Management Agreement using our online form builder or download one of the ready-made contracts through the links below.
"Property Management Agreement Template"
This document is used for the performance of property management and puts into detail the responsibilities that the property managers are accountable for.
What Items Must Be Included in a Property Management Agreement?
Every Property Management Agreement form must contain the following information:
- Purpose. Briefly describe the subject of the contract;
- Manager's responsibilities. You may include several duties in the agreement, for example, advertising of the property, collection of rent, repair, and maintenance, legal proceedings;
- Compensation. State the sum of money the manager will receive for the work;
- Duration of the agreement;
- Termination clause. The parties may negotiate this provision adding conditions they deem necessary, for instance, reimbursement for any expenses incurred before the date of termination;
- Severability. If any provision of the agreement becomes unenforceable or invalid, that part will be severed from the rest of the contract and other provisions will continue in full force;
- Liability. Indicate the responsibility in cases regarding injuries or personal claims against the property - for example, when the manager was aware of a health hazard and did not fix it;
- Signatures of the parties. The manager and the owner must also write down their names and the date the deal is made.
Benefits of drafting a Property Management Contract:
- It sets the standard of performance for both participants;
- It provides a definite time frame once a party chooses to terminate the contract;
- It is essential to protect you from liability;
- It provides a structure for a beneficial partnership between the property manager and the owner.
How to Get out of a Property Management Agreement?
There are several steps you need to take to properly terminate a Property Management Contract:
- Reread your agreement to find a specific reason to end the contract. Some agreements will allow you to cancel the agreement without a just cause;
- Understand the costs that may occur - some agreements will charge a fee for early termination;
- Give advance notice to the other party of the contract. The termination clause usually requires between thirty- and ninety-days-notice to terminate the deal. Make sure your notification is sent by certified mail, not by e-mail;
- Notify the tenants about the change in property management and let them know the whereabouts of their security deposits;
- Get copies of all the paperwork - records of security deposits, and possible expenses.
Looking to find out more? Check out these related contracts and agreements:
Documents
"Property Management Agreement Template"
This document is used for the performance of property management and puts into detail the responsibilities that the property managers are accountable for.
"On-Site Management Agreement Template"
This is a contract between the owner of a property and an On-Site Property Manager. An On-Site Manager performs property management functions on a premises and is responsible for the day-to-day operations of a particular property.
