[Guide] Management Contract Explanation

The objective of this article is to explain to the landlord the commonly accepted and expected responsibilities listed on the management contract between the landlord and property management company.

Introduction

A management contract is a legal agreement between the landlord and the property management company. The purpose of this document is to outline each party’s expectation, obligations, commitments and responsibilities.

Commonly accepted terms and conditions, which are influenced by State, County, and City laws, are commonly utilized by various management companies. These terms and conditions play a vital role in defining the expectations for all parties involved, despite minimal differences in pricing among different companies.

Terms & Conditions

Here are some key elements commonly found in property management agreements and what they mean for you.

• Parties to the Contract
  The contract must clearly identify the parties involved, including the property owner’s name(s), contact information, and address, as well as the firm’s name and contact details.
• Property Management Services
  The agreement should outline all responsibilities and tasks related to taking care of tenant needs and requests, as well as the maintenance of the property. This may include marketing and advertising, maintenance, repairs, housekeeping, financial tracking, responding to tenant issues, 24-hour emergency services, and enforcing rules and regulations set forth by the owner in tenant leases
• Commencement and Termination Dates
  The agreement should clearly define specific dates for the tenure of the management firm’s services, including the start date and end date, if known prior to the signing of the contract (Pay close attention to any automatic renewal clauses)
• Property Owner Responsibilities
  The property owner is typically responsible for providing necessary property information, such as current leases, contracts, banking records, and other documents concerning the operation, management, and maintenance of the property. Additionally, the owner may have duties upon termination and written notice requirements for the property manager
• Excluded Duties
  A thorough property management agreement should identify and explain duties that will not be performed by the owner or the property manager, such as refinancing the property or conducting extensive remodeling. This may vary depending on packages offered by the property management company.

It’s important to clearly understand your responsibilities and your property management company’s responsibilities to avoid miscommunication and misunderstandings.

If you’d like us to review a management agreement please contact us.

Landlord
The landlord should familiarize themselves with their management agreement to better understand the services their management company will render and for the landlord to understand his responsibilities.

Property Manager
A property manager should know his management agreement inside and out. This will benefit the property manager when marketing his services, answering questions, and protecting himself and his company.

Tenant
This does not apply to the tenant.