Commercial Property Management Agreement Template - Texas Association of Realtors - Texas

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COMMERCIAL PROPERTY MANAGEMENT AGREEMENT
USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS® IS NOT AUTHORIZED.
©Texas Association of REALTORS®, Inc. 2014
1. PARTIES:
A. The parties to this agreement are:
Owner:
Address:
City, State, Zip:
Phone:
Fax:
E-Mail:
Broker:
Address:
City, State, Zip:
Phone:
Fax:
E-Mail:
B. If Owner is not an individual, Owner is an:  estate  corporation  limited liability company (LLC)
 trust  partnership  limited liability partnership (LLP) , which entity was chartered or created in
(State).
The individual signing this agreement for the owner
represents to Broker that he or she has the authority to bind Owner to this agreement, to act for
Owner, and is acting under his capacity as
(title) for the Owner.
C. Owner appoints Broker as Owner’s sole and exclusive agent of the real property described in
Paragraph 2 to:
 (1) manage the Property, but not lease the Property.
 (2) manage and lease the Property.
2. PROPERTY: “Property” means:
Address:
legally described as:
in
County, Texas, together with the following non-real-property
items:
.
“Property” also includes any other Property described in any attached Multiple Property Addendum.
3. TERM:
A. Primary Term: The primary term of this agreement begins and ends as follows:
Commencement Date:
Expiration Date:
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 1 of 10
COMMERCIAL PROPERTY MANAGEMENT AGREEMENT
USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REALTORS® IS NOT AUTHORIZED.
©Texas Association of REALTORS®, Inc. 2014
1. PARTIES:
A. The parties to this agreement are:
Owner:
Address:
City, State, Zip:
Phone:
Fax:
E-Mail:
Broker:
Address:
City, State, Zip:
Phone:
Fax:
E-Mail:
B. If Owner is not an individual, Owner is an:  estate  corporation  limited liability company (LLC)
 trust  partnership  limited liability partnership (LLP) , which entity was chartered or created in
(State).
The individual signing this agreement for the owner
represents to Broker that he or she has the authority to bind Owner to this agreement, to act for
Owner, and is acting under his capacity as
(title) for the Owner.
C. Owner appoints Broker as Owner’s sole and exclusive agent of the real property described in
Paragraph 2 to:
 (1) manage the Property, but not lease the Property.
 (2) manage and lease the Property.
2. PROPERTY: “Property” means:
Address:
legally described as:
in
County, Texas, together with the following non-real-property
items:
.
“Property” also includes any other Property described in any attached Multiple Property Addendum.
3. TERM:
A. Primary Term: The primary term of this agreement begins and ends as follows:
Commencement Date:
Expiration Date:
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 1 of 10
Management Agreement concerning:
B. Automatic Extension: Unless either party provides written notice of termination to the other party at
least 30 days before the Expiration Date, this agreement will automatically extend on a monthly basis
until either party terminates by providing at least 30 days written notice to the other party.
4. AUTHORITY OF BROKER:
A. Management Authority: Owner grants to Broker the following authority which Broker may exercise
when and to the extent Broker determines to be in Owner’s interest:
(1)
collect and deposit for Owner rents and other charges (for example, returned check charges and
late charges) from tenants in the Property in a trust account;
(2)
collect and deposit security deposits from tenants in:
(a) a trust account separate from the account described under Paragraph 4A(1);
(b) the same trust account described under Paragraph 4A(1);
(3)
pay from the account described under Paragraph 4A(1) expenses to operate the Property,
including but not limited to, maintenance, taxes, insurance, utilities, repairs, security,
management fees, leasing fees, and expenses authorized under this agreement;
(4)
hire contractors to renovate, remodel, or redecorate the Property provided that Broker does not
expend more than $
for any single renovation, remodel, or
redecoration without Owner’s consent;
(5)
terminate leases for the Property, negotiate lease terminations, and serve notices of termination;
institute and prosecute, at Owner’s expense, actions to: (a) evict tenants in the Property; or (b)
(6)
recover possession of the Property;
(7)
settle, compromise, or withdraw any action described in Paragraph 4A(6);
(8)
negotiate and make reasonable concessions to tenants or former tenants in the Property;
(9)
report payment histories of tenants in the Property to consumer reporting agencies;
(10) obtain information from any holder of a note secured by a lien on the Property and any insurance
company insuring all or part of the Property;
(11) authorize inspectors, appraisers, contractors, and other brokers and their associates to access
the Property at reasonable times for purposes contemplated by this agreement and to lend keys
and disclose security codes to such persons to enter the Property;
(12) display or remove signs, as broker determines appropriate, on the Property in accordance with
applicable laws, ordinances, and restrictions; and
(13) perform other necessary services related to the management of the Property.
B. Leasing Authority: This Paragraph 4B applies only if Broker has the authority to lease the Property
under Paragraph 1C. Owner grants to Broker the following authority which Broker may exercise when
and to the extent Broker determines to be in Owner’s interest:
(1)
advertise the Property for lease by means and methods that Broker determines are reasonably
competitive, including but not limited to creating and placing advertisements with interior and
exterior photographic and audio-visual images of the Property and related information in any
media, including the Internet;
place “For Lease” signs, “For Information” signs, or other signs on the Property in accordance
(2)
with applicable laws, regulations, ordinances, restrictions, and owners’ association rules;
(3)
remove all other signs offering the Property for sale or lease;
(4)
submit the Property as a listing with one or more listing services at any time the Property is
marketed for lease and to change or terminate such listings;
(5)
authorize other brokers, their associates, and their clients to access the Property at reasonable
times and to lend keys and disclose security codes to such persons to enter the Property;
(6)
duplicate keys and access devices to facilitate convenient and efficient showings of the Property
and to lease the Property;
(7)
verify information and references in rental applications from prospective tenants;
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 2 of 10
Management Agreement concerning:
(8)
offer to pay another broker from the compensation Broker receives under this agreement a
portion of the compensation received by Broker;
negotiate and execute leases on Owner’s behalf for the Property at market rates and on
(9)
competitively reasonable terms for initial terms of not less than
months and not more
than
months and in accordance with any instructions in Paragraph 20;
(10) negotiate and execute any amendments, extensions, or renewals to any leases for the Property
on Owner’s behalf;
(11) collect application fees from prospective tenants; and
(12) perform other necessary services related to the leasing of the Property.
C. Record Keeping: Broker will:
(1) maintain accurate records related to the Property and retain such records for not less than 4 years;
(2) file reports with the Internal Revenue Service which Broker may be required to file concerning
funds received on behalf of Owner under this agreement (for example, Form 1099);
(3) send to Owner each  quarter  month a statement of receipts, disbursements, and charges;
and
(4) remit to Owner the funds collected by Broker for Owner under this agreement, less authorized
deductions:
 (a) on a  quarterly  monthly
basis;
 (b) as Owner may instruct from time to time.
D. Security Deposits:
(1) Broker will:
(a) maintain security deposits received from tenants in the trust account described under
Paragraph 4A(2); and
(b) in accordance with applicable law and the leases for the Property, account to the tenants for the
security deposits, make lawful deductions from the security deposits, and return the security
deposit balances to the tenants from the trust account.
(2) After this agreement ends, Broker will deliver to Owner or the Owner’s designee the security
deposits held by Broker under leases of the Property, less deductions authorized by this
agreement, and will send written notices to the tenants that state:
(a) that this agreement has ended;
(b) the contact information for the Owner or the Owner’s designee; and
(c) that Owner is responsible for accounting for and returning the tenant’s security deposit.
(3) If Broker complies with this Paragraph 4D, Owner will indemnify Broker from any claim or loss from
a tenant for the return of a security deposit. This Paragraph 4D survives termination of this
agreement.
E. Performance Standard: Broker will:
(1) use reasonable care when exercising Broker’s authority and performing under this agreement; and
(2) exercise discretion when performing under this agreement in a manner that Broker believes to be in
Owner’s interest, provided that Broker will treat any tenant honestly and fairly.
F. Deductions and Offset: Broker may disburse from any funds Broker holds in trust for Owner:
(1) any compensation due Broker under this agreement;
(2) any funds Broker is authorized to expend under this agreement; and
(3) any reimbursement Broker is entitled to receive under this agreement.
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 3 of 10
Management Agreement concerning:
G. Insurance and Attorneys:
(1) Broker may not file a claim for a casualty loss with the carrier insuring the Property. Broker may
communicate with the carrier to facilitate the processing of any claim Owner may file or other
matters that Owner instructs Broker to communicate to the carrier.
(2) Broker may not directly or indirectly employ or pay a lawyer to represent Owner. Broker may
communicate with Owner’s attorney in accordance with Owner’s instructions.
5. RELATIONSHIP OF THE PARTIES:
This agreement does not create a partnership or joint venture
between the parties. Broker is an independent contractor.
6. LEGAL COMPLIANCE: The parties will comply with all obligations, duties, and responsibilities under the
Texas Property Code, fair housing laws, and any other statute, administrative rule, ordinance, or restrictive
covenant applicable to the use, leasing, management, or care of the Property.
7. RESERVES: Upon execution of this agreement, Owner will deposit the following amount with Broker to be
. Broker may, at Broker’s discretion,
held in a trust account as a reserve for Owner: $
use the reserve to pay any expense related to the management of the Property (including but not limited to
Broker’s fees). If the balance of the reserve becomes less than the amount stated, Broker may: (a) deduct
an amount that will bring the balance to the amount stated from any subsequent rent received on behalf of
Owner and deposit the amount into the reserve; or (b) notify Owner that Owner must promptly deposit
additional funds with Broker to bring the balance to the amount stated.
8. ADVANCES: Owner will, in advance, provide Broker all funds necessary for the leasing and management
of the Property. Broker is not obligated to advance any money to Owner or to any other person.
9. OWNER’S REPRESENTATIONS:
A. General: Except as disclosed in Paragraph 20, Owner represents that:
(1) Owner has fee simple title to and peaceable possession of the Property and all its improvements
and fixtures, unless rented, and the legal capacity to lease the Property;
(2) Owner is not bound by another agreement for the management of the Property that is or will be in
effect during this agreement;
(3) if Broker has the authority to lease the Property under Paragraph 1C, Owner is not bound by: (a)
another agreement with another broker for the lease of the Property that will be in effect during this
agreement; or (b) any agreement or covenant that prohibits owner from leasing the Property;
(4) Owner is not delinquent in the payment of any property taxes, owners’ association fees, property
insurance, mortgage, or any encumbrance on or affecting the Property;
(5) the Property is not subject to the jurisdiction of any court; and
(6) all information related to the Property that Owner provides to Broker is true and correct to the best
of Owner’s knowledge.
B. Property Condition: (select (1) or (2) below)
 (1) Except as stated below, in this agreement, or in any addendum, Owner is not aware of: (1) any
condition affecting the Property that materially affects the health or safety of an ordinary tenant;
(2) any environmental hazard on the Property; or (3) any violation of any ordinance, statute,
restriction, or law related to the Property.
.
 (2) Owner has completed a Commercial Property Condition Statement (TAR-1408) which is
attached to this Agreement.
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 4 of 10
Management Agreement concerning:
10. OWNER’S COOPERATION:
A. Owner agrees to:
(1)
cooperate with Broker to facilitate the management of the Property;
(2)
not deal with or negotiate with any tenant in the Property concerning any matter related to the
management of the Property but refer all such dealings to Broker;
(3)
not enter into a management agreement with another broker for the management of the Property
to become effective during this agreement;
(4)
provide Broker with copies of any existing leases or rental agreements related to the Property;
(5)
provide Broker with keys and access devices to the Property;
(6)
provide Broker with copies of all warranties related to the Property or any item in the Property;
(7)
tender to Broker any security deposits paid by any existing tenants in the Property;
(8)
complete any disclosures or notices required by law or a lease of the Property;
(9)
amend applicable notices and disclosures if a material change occurs during this agreement; and
(10) notify Broker if Owner becomes delinquent in the payment of: (a) any mortgage or other
encumbrance secured by the Property; (b) property taxes; (c) property insurance; or (d) owners’
association fees.
B. If Broker has the authority to lease the Property under Paragraph 1C, Owner further agrees to
(1)
cooperate with Broker to facilitate the showing, marketing, and lease of the Property;
not rent or lease the Property to anyone without Broker’s prior written approval;
(2)
(3)
not negotiate with any prospective tenant who might contact Owner directly, but refer all
prospective tenants to Broker;
(4)
not deal with or negotiate with any tenant in the Property concerning any matter related to the
leasing of the Property but refer all such dealings to Broker; and
(5)
not enter into a listing agreement with another broker for the rental or leasing of the Property to
become effective during this agreement.
11. INSURANCE:
A. At all times during this agreement, Owner must maintain in effect:
(1) a public liability insurance policy that names Broker as a co-insured or additional insured and
covers losses related to the Property in an amount of not less than $
on
an occurrence basis; and
(2) an insurance policy for the Property in an amount equal to the reasonable replacement cost of the
Property’s improvements and that contains endorsements which contemplate the leasing of the
Property with vacancies between lease terms.
(3) rental replacement insurance in an amount not less than the annual expected rentals of the
Property.
B. Not later than the 15th day after the Commencement Date, Owner must deliver to Broker copies of
certificates of insurance evidencing the coverage required under Paragraph 11A. If the coverage
changes at any time during this agreement, Owner must deliver to Broker a copy of the insurance
certificate evidencing the change not later than 10 days after the change.
C. If Owner fails to comply with Paragraphs 11A or 11B, Broker may:
(1) purchase insurance that will provide Broker the same coverage as the required insurance under
Paragraph 11A(1) and Owner must promptly reimburse Broker for such expense; or
(2) exercise Broker’s remedies under Paragraph 17.
D. Owner will comply with all the requirements of the insurance policies obtained in compliance with
Paragraph 11A.
12. BROKER’S FEES: All fees to Broker under this agreement are payable in
County, Texas. This Paragraph 12 survives termination of this agreement with regard to fees earned
(TAR-2202) 4-1-14
Initialed for Identification by Owner
,
and Broker/Associate
Page 5 of 10

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