37+ Property Management Agreements

What Is a Property Management Agreement?

A property management agreement is a legal agreement between a property owner and a company or individual hired in managing the property. It takes note of the responsibilities that management businesses take on for the property owner. And it commonly applies to handling real estate, particularly residential and commercial properties.

According to The Balance Small Business, there are six basic elements of a property management agreement—fees or services, property owner’s responsibilities, liabilities, equal opportunity housing, contract duration, and termination.

The Important Parts of a Property Management Agreement

It is said that there are six basic elements in a property management agreement. So what are they? Expect your agreement to contain the following parts:

Fees and Services: What services did property managers promise to do? And how much will each service cost? Note them down under the services or fees section. This helps parties understand the underlying fees and services from property maintenance and other additional costs.Property Owner Responsibilities: Insert a section stating all the responsibilities of the property owner or landlord. So when the property owner signs the agreement, he or she is expected to complete the list of responsibilities there.Equal Opportunity Housing: Housing laws are no joke and supporting equal opportunity housing is a smart addition to your agreement. Jot down what fair housing laws apply to both federal and state law.Liabilities: Agreements have their limitations too, so don’t forget to add the property manager’s liability and hold harmless clause. So when a property manager ends up being negligent of something, protection follows. Hence, don’t ignore your protection from liabilities.Contract Duration: How long with property management agreement last? State it under the contract duration. Some management businesses wouldn’t even sign agreements that only work less than one year. Setting a reasonable schedule is recommended.Termination Clause: Lastly, add the terms for the cancellation or termination of contract. This section validates what terms could or couldn’t terminate the agreement.

How to Make a Property Management Agreement

Don’t assume that making property management agreements are difficult. You could create one shortly. But, don’t rush the process since any binding agreement should be handled carefully. And you can achieve that by following these steps:

Step 1: Know the Property Itself and the Responsibilities Involved

You have to know a lot about the property being managed in the first place. So is it residential property, commercial property, under a lease, or any other example? And what would be the expected responsibilities to be handled by the landlord or property manager? State them down. That way, it will be easy to write the rest of the agreement rather than failing to review the details ahead.

Step 2: Pick a Sample Template

Take time to check out the sample property management agreements given above. You are free to explore them individually until you can pick your favorite samples. Afterward, you can edit, download, and publish your agreement form anytime. Thanks to sample templates, you never need to start from the very beginning. Just insert what is missing in the document and slowly add the finishing details promptly.

Step 3: Insert the Parts of a Property Management Agreement

Complete your property management agreement by adding the essential parts. You already know what they are anyway from the fees and services down to the termination clause. Such elements are also an effective way to group your details so they will be organized. An agreement naturally is divided into clauses anyway. But, ensure that you wrote the correct details or everything still goes downhill.

Step 4: Write Clearly

It is easier said than done to write clearly but you have to accomplish it in order for the agreement to be valid and respected. You may use easy-to-understand words and be very specific with the details. Also, be cordial as if you are writing a formal letter. You only submit the agreement and have them signed once you are confident with its details. Lastly, finalize the format in case you need printed copies, soft copies, or both.

FAQs

What are the obligations and restrictions of a property owner?

A property owner is expected to set up or maintain reserve funds and obtain or maintain the right insurance. Meanwhile, a property owner’s restrictions involve entry and finding some tenants.

What should a property management agreement’s termination clause discuss?

Expect the termination clause of your property management agreement to tackle the termination notice, early termination fee, reason for termination, and obligations of termination.

What are the advantages of a property management agreement?

With a property management agreement, you can experience the following advantages:

  • Understand the reasons why each party may want to end the business partnership.
  • Set a timeline of the agreement.
  • Show the itemized clauses from the fees, terms, and other basic parts of the agreement.
  • Answer the questions related to liabilities.

The next time you have a property and there is a need to take responsibilities as the property manager, don’t forget a property management agreement into the picture. With the said agreement, running the property would run smoothly and you won’t have to be scared of protecting your legal and financial liabilities. Download now!