A well-crafted Property Management Agreement is a crucial document for landlords seeking to delegate property management responsibilities to a professional property management company. This legally binding contract outlines the terms and conditions of the agreement, ensuring clarity, accountability, and protection for both parties involved.
Key Elements of a Comprehensive Property Management Agreement
Landlord: Clearly identify the landlord’s legal name and contact information.
Property Management Company: Specify the company’s legal name, address, and contact details.
2. Property Description
Address: Provide the complete address of the property being managed.
Legal Description: Include a detailed legal description of the property, such as lot and block numbers, tax ID, and any relevant legal references.
Property management agreement template – free to use
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3. Term of Agreement
Start Date: Clearly state the effective date of the agreement.
End Date: Specify the termination date, whether it’s a fixed term or a month-to-month agreement.
Automatic Renewal: If applicable, outline the terms for automatic renewal and any required notice periods.
4. Management Fees
Fee Structure: Clearly define the fee structure, whether it’s a flat fee, a percentage of rental income, or a combination of both.
Payment Schedule: Specify the payment terms, including due dates and accepted payment methods.
Additional Fees: Outline any additional fees that may be charged, such as fees for tenant screening, lease renewals, or property inspections.
5. Property Management Services
Marketing and Tenant Screening: Detail the services related to marketing the property, screening tenants, and conducting background checks.
Lease Execution: Describe the process of lease preparation, execution, and renewal.
Rent Collection and Disbursement: Outline the procedures for collecting rent, depositing funds, and disbursing payments to the landlord.
Maintenance and Repairs: Specify the company’s responsibilities for property maintenance, including routine inspections, repairs, and vendor management.
Accounting and Financial reporting: Clearly define the financial reporting requirements, including regular statements and annual reports.
Insurance: Indicate the landlord’s insurance responsibilities and whether the property management company is required to carry any specific insurance coverage.
6. Landlord’s Responsibilities
Property Taxes and Insurance: Outline the landlord’s obligations for paying property taxes and maintaining insurance coverage.
Capital Expenditures: Specify who is responsible for major capital expenditures, such as roof replacements or HVAC system upgrades.
7. Termination of Agreement
Termination Notice: Clearly state the required notice period for terminating the agreement by either party.
Termination for Cause: Define specific circumstances that may result in immediate termination, such as breach of contract or failure to fulfill obligations.
8. Governing Law and Dispute Resolution
Governing Law: Specify the jurisdiction whose laws will govern the agreement.
Dispute Resolution: Outline the preferred method for resolving disputes, such as mediation or arbitration.
9. Indemnification
Indemnification Clause: Include a clause that outlines the circumstances under which each party may be liable to indemnify the other for losses or damages.
10. Entire Agreement
Entire Agreement Clause: Clearly state that the agreement constitutes the entire understanding between the parties and supersedes any prior agreements or representations.
Design Tips for a Professional Agreement
Clean and Professional Layout: Use a clean and professional layout with clear headings and subheadings.
Consistent Formatting: Maintain consistent formatting throughout the document, including font size, font style, and line spacing.
Easy-to-Read Font: Choose a clear and easy-to-read font, such as Times New Roman or Arial.
Adequate White Space: Use ample white space to improve readability and make the document visually appealing.
Legal Language: Use clear and concise legal language, avoiding complex legal jargon.
Professional Logo: Include the property management company’s logo at the top of the document.
Page Numbering: Number each page to ensure proper organization.
By carefully crafting a comprehensive and professional Property Management Agreement, landlords can establish a strong foundation for a successful partnership with a property management company.
