The Owner and the Manager are referred to individually as a “Party” and collectively as the “Parties”
This Property Management Agreement (the “Agreement”) is entered into and made valid upon signature by both Parties. This date is hereinafter referred to as the “Effective Date”.
The Owner owns the property located at [Insert Address] (the “Property”). The Manager is in the business of managing properties of this type. The Owner desires to engage the Manager to manage the Property.
- Manager’s Responsibilities
The Manager agrees to perform the following duties and responsibilities with regards to the Property:
- Advertising of Property.
The Manager shall advertise the Property for rent, engage and screen potential renters and enter into rental agreement(s) with acceptable renter(s). The Owner shall reimburse the Manager for all expenses related to such advertising. The Manager shall notify the Owner, in advance, of anticipated expenses related with such advertising.
- Collection & Disbursement of Rent.
The Manager shall be responsible for all collection of rent earned on the Property. The Manager shall then be responsible for disbursement of those proceeds to the Owner. The Owner shall provide the Manager with direction as to how proceeds shall be disbursed. The Manager shall further prepare and provide to the Owner a detailed accounting of all rents, expenses, and disbursements.
- Maintenance & Repair.
The Manager shall be responsible for performing, or hiring necessary personnel to perform, all necessary maintenance and repairs to the Property. The Owner shall reimburse the Manager for the cost of all such maintenance and repairs. The Manager shall provide the Owner invoices of the actual costs.
- Legal Proceedings.
In the event that collection and/or legal proceedings become necessary with regard to the rental of the Property, the Manager shall handle all such proceedings. The Owner shall reimburse the Manager for all expenses incurred in the pursuit of collection proceedings and/or legal proceedings. The Manager shall not be responsible for any legal proceedings that do not result from the management and rental of the Property.
The Parties agree the Manager shall be compensated as follows:
- Initial Maintenance
Any properties or units that are not in rentable condition will be charged [Insert Amount Percentage]% of all work or services performed to get the Property or unit ready to rent. If the Owner chooses, they can ready these units themselves to a condition agreeable to all Parties, and avoid these costs. These costs will not be charged after this initial period, namely once the Property or unit has been rented for the first time. This fee is completely separate from monthly management fees stipulated below. Listed below are the properties or units that are not in rentable condition.
[Units and properties not in rentable condition]
- Monthly Management Fees:
Fee equal to [Insert Amount Percentage]% ([Insert minimum Amount] minimum) of total monthly rental income, payable in monthly installments. The fee is not paid during vacancies unless otherwise specified above, or in the event the tenant does not pay.
- Additional Covenants and Agreements:
- Property Costs:
The Owner is financially responsible for any and all costs associated with the managed Property. Including, but not limited to: Repairs, supplies, contracted services and legal costs. The Owner understands that the management fee is strictly an administrative fee, and does not cover any of the expenses associated with owning rental Property. The Owner is not responsible for advertising or screening costs in conjunction with placement services. However, if the Owner elects to advertise or screen over and above what the Manager provides, the Owner will be responsible for those expenses. The Manager will advertise the Owner’s Property in various web based mediums which are subject to change based on performance of said mediums. When deemed necessary to rent Property, the Manager will recommend local newspaper advertising. Local newspaper advertising will be approved by and paid directly by the Owner.
- The Owner will be notified and will consent to any repair estimated in good faith to be in excess of [Insert Amount and currency], except in the case of an emergency.
- The Owner shall deposit and maintain with the Manager a minimum of [Insert Amount and currency], as a reserve. The Owner is required to fund this reserve to the Manager by the next business day after signing this agreement. Failure to do so will immediately void this agreement.
- The Owner will cover any excess of expenses over income within [Insert days] days of any request by the Manager. The Manager may terminate this Agreement immediately if the request for additional funds is not paid. The Owner understands that it is not the Manager’s obligation to advance its own funds for payment of the Owner’s operating expenses.
- Property Standards:
- The Owner agrees to comply with the Manager’s requests to keep Property up to local code and to generally accepted Property standards. Failure to comply with these requests may result in termination of this agreement.
- Security Deposits:
- The Manager will keep all security deposits for the managed Property in the company escrow account, except for buildings over [Insert Units] units that require a separate escrow account. The Owner is required to fund previously collected security deposits to the Manager by the next business day after signing this agreement. Failure to do so will immediately void this agreement.
- Leases, Forms, and Disclosures:
- The Owner understands that the Manager will use only the Manager’s approved leases, forms, and disclosures. This is a must to ensure consistency through all properties managed. Company forms can be provided to the Owner, for their review. The Owner is not to share or copy any leases, forms or disclosures.
- The Manager will honor former leases that are still valid, but will change to the Manager’s lease upon renewal. It is the Owner’s responsibility to provide the Manager with any lease that is not month to month. Any additional correspondence or disclosures are to be provided as well.
- Keys and Garage Door Openers:
The Owner will provide the Manager with copies of all keys and all extra garage door openers to the Property within one week of signing this agreement. Failure to do so will immediately void this agreement. The Manager will maintain one set of keys for their use. The Owner is required to pay for all key duplication costs, except in the case of tenant or Manager neglect.
The Owner agrees to re-key unit locks after every tenant moves out. In multiple unit properties, locks that are not mastered will be replaced and/or re-keyed to a master key upon move out. These costs can be charged to a tenants deposit if they fail to return their keys. This cost is very reasonable due to our vendor’s competitive pricing.
- Carpet Shampooing:
The Owner agrees to have the carpets shampooed after every tenant moves out. This is a simple measure to make the carpet last longer and a credit is provided for in our lease. Tenants are required to pay a reasonable fee to have the carpets cleaned after moving out.
- Property Insurance:
The Owner is required to maintain a current landlord insurance policy to protect the structure in case of an event that causes damage to the Property or harm to the tenants. Failure to do so will result in immediate termination of this agreement.
- Owner/Tenant Communication:
The Manager will act as a barrier to the Owner, and will shield the Owner from all unnecessary communication from tenants. Unless a prior relationship exists, or is agreed upon by both the Manager and the Owner, the Owner shall have no contact with tenants for any reason.
- Owner Approval:
The Owner is responsible for major decisions, namely potential tenant applications, repairs over [Insert Amount] and any other situation where warranted that is not already provided for under this agreement. In cases where the Owner is inconsistent or unreasonable, the Manager may elect to cancel this agreement.
- Attorney Fees:
In the event of any legal action by the Parties arising out of this agreement, the prevailing Party shall be entitled to reasonable attorney’s fees and costs, to be determined by the court in which such action is brought.
- This Agreement shall commence upon the Effective Date, as stated above, and will continue until [Insert End Date].
This Agreement may be terminated at any time by either Party upon [Insert Days] days written notice to the other Party. Upon termination, the Manager shall disburse to the Owner any monies in the Manager’s possession due and owing to the Owner within thirty (30) days from the date of termination. The Owner shall reimburse the Manager for any expenses incurred or approved prior to the date of termination within thirty (30) days from the date of termination.
- Representations and Warranties.
Both Parties represent that they are fully authorized to enter into this Agreement. The performance and obligations of either Party will not violate or infringe upon the rights of any third-party or violate any other agreement between the Parties, individually, and any other person, organization, or business or any law or governmental regulation.
The Parties each agree to indemnify and hold harmless the other Party, its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from the negligence of or breach of this Agreement by the indemnifying Party, its respective successors and assigns that occurs in connection with this Agreement. This section remains in full force and effect even after termination of the Agreement by its natural termination or the early termination by either Party.
- Limitation of Liability.
Under no circumstances shall either Party be liable to the other Party or any third party for any damages resulting from any part of this agreement such as, but not limited to, loss of revenue or anticipated profit or lost business, costs of delay or failure of delivery, which are not related to or the direct result of a Party’s negligence or breach.
In the event any provision of this Agreement is deemed invalid or unenforceable, in whole or in part, that part shall be severed from the remainder of the Agreement and all other provisions should continue in full force and effect as valid and enforceable.
The failure by either Party to exercise any right, power or privilege under the terms of this Agreement will not be construed as a waiver of any subsequent or further exercise of that right, power or privilege or the exercise of any other right, power or privilege.
- Legal Fees.
In the event of a dispute resulting in legal action, the successful Party will be entitled to its legal fees, including, but not limited to its attorneys’ fees.
- Legal and Binding Agreement.
This Agreement is legal and binding between the Parties as stated above. This Agreement may be entered into and is legal and binding both in the United States and throughout Europe. The Parties each represent that they have the authority to enter into this Agreement.
- Governing Law and Jurisdiction.
The Parties agree that this Agreement shall be governed by the State and/or Country in which the Property is located. Each Party irrevocably submits for all purposes in connection with this Agreement to the exclusive jurisdiction of the [courts/venue] of [insert court/venue].
- Entire Agreement.
The Parties acknowledge and agree that this Agreement represents the entire agreement between the Parties. In the event that the Parties desire to change, add, or otherwise modify any terms, they shall do so in writing to be signed by both Parties.