Real Estate
Property Management Agreement
Authorizes a property management company to manage and maintain real estate on behalf of the property owner, including tenant relations and maintenance.
Overview
Authorizes a property management company to manage and maintain real estate on behalf of the property owner, including tenant relations and maintenance.
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Who Needs This Document?
Property owners who don't want to self-manage, real estate investors with multiple properties, and property management companies.
When Do You Need This?
Needed when a property owner wants to delegate day-to-day management of rental properties to a professional management company.
Key Provisions
A well-drafted document should include the following essential provisions:
- Scope of management services and authority levels
- Management fees, leasing commissions, and expense handling
- Reporting requirements and financial accounting procedures
- Term, termination provisions, and transition obligations
Frequently Asked Questions
- How much authority does a property manager have to make decisions without owner approval?
- This is negotiated directly in the agreement, typically through a spending threshold below which the manager can authorize repairs or expenses without checking with the owner first, and above which owner sign-off is required. The agreement should also state whether the manager can sign leases, screen tenants, or handle evictions independently, since owners vary widely in how much control they want to retain.
- How are property management fees usually structured?
- Fees are commonly charged as a percentage of collected rent, plus separate fees for specific services like leasing a vacant unit or coordinating a major repair. Some agreements also include a lower minimum fee for months when the property sits vacant, since a purely percentage-based fee would otherwise give the manager little incentive during a vacancy.
- What financial reporting should an owner expect from a property manager?
- Owners should expect regular statements showing rent collected, expenses paid, and any outstanding balances, along with access to supporting documentation like invoices and lease records. The agreement should specify the reporting frequency and format, since inconsistent or delayed reporting is one of the most common complaints owners have about property managers.
Related Documents
- Residential Lease AgreementA binding contract between a landlord and tenant establishing the terms for renting a residential property.
- Commercial Lease AgreementGoverns the rental of commercial property for business purposes, with specific provisions for rent escalation, build-out, and use restrictions.
- Service AgreementA comprehensive contract governing the provision of services between a service provider and a client, including SLAs, payment terms, and liability.