Property management contracts are legal agreements designed to protect the interests of both property owners and property management organizations. The contract is signed between parties that are involved in a mutually beneficial business relationship.
Property owners should understand their responsibilities and those of the property managers. The contract should be drafted in a way that the property owner will be protected if the property manager does not fulfill their responsibilities.
Additionally, property owners must carefully review the property manager contract before engaging the service of the property manager to ensure that every relevant detail is included.
When is a Property Management Agreement Needed?
You need a property manager agreement if you are a property owner looking to hire an individual or company to manage it. A property management company would also need such a contract to protect their company against any issue that may arise from performing their responsibilities.
A property management contract is designed to clearly state the responsibilities of both parties. It is important to know that all property management organizations do not perform the same services. Some organizations include the marketing of the rental properties in their services while others leave the duty to the property owners.
Therefore, when drafting a contract, it is important that the specific duties that the property manager will undertake be clearly outlined in the document. The contract provides written proof of the negotiated terms between a property owner and the property manager.
If you are choosing an organization to manage your property, you need this document to protect your interest. To get started, you can check out some property management agreement templates from a reputable platform. These templates are editable and can be customized to suit your specific needs.
Basics of a Good Property Management Contracts
A management contract template highlights specific details of an agreement. The contract is often in sections and each section focuses on different aspects. There is the service section, which discusses the specifics of the services that will be provided by the property manager.
This may include running credit checks on the renters, maintaining landscaping and hallways, and filling out vacancies within a specific timeframe. It may also include providing prompt repairs for the tenants and collecting rent payments.
Just as the sample property management agreement details all services included, it should also highlight services that are not covered. Another section in the contract is the fee layout. This covers the cost of services rendered under the agreement.
Both parties must agree on a mutually beneficial fee structure. Some property management companies charge a monthly flat fee while others charge a specific percentage of the total rental revenue in a month.
If any extra fees will be charged, these should be stated in the contract. The responsibilities and limitations of the property owner and property manager as well as the contract timeframe should also be stated. The liability of the property manager, as well as the termination clauses, should be stated.
How Do I Write a Property Management Contract?
In most cases, you do not need to write the contract. You can simply get a management contract template from a reputable platform online. These templates are usually editable, which means you can customize them to fit your specific needs.
This is the most recommended because, with this, you would not need to start writing the contract from the scratch. However, if you want to create a simple property management agreement pdf from the scratch, you can. Of course, it will take a lot of work but it is achievable.
The first thing is to make a checklist of everything that should be included in your contracts. Although contracts vary from one to the other, some basics should be included. These include the breakdown of the fees and services; the property owner’s responsibilities; liabilities of the property’s manager; contract duration; termination clause.
Except you have a legal background, it is recommended that you share your property management agreement form with a legal practitioner for professional input. Even if you are using a property management agreement sample from an online website, you should still share it with your lawyer. This will ensure you cover every area that is required.
Understanding Your Property Management Contract
Whether you are the property owner or the property manager, you must understand the property management contract before you sign it. Most times, these contracts come with legal jargon that may not be too clear when reading them. This is why you require the service of a legal practitioner.
You can sit with your lawyer and review the document together. If there is a part that you do not understand, you can request clarification from your lawyer. Both parties to the property manager contract should understand the details of the agreement.
As much as possible, any form of ambiguity should be avoided. If there is any statement or clause that is unclear, it should be clarified and both parties must understand and agree to the terms and every clause stated in the contract. You should never rush over signing a contract.
Spend some time to review and digest the content until you understand the details. This will prevent you from signing a document that does not protect your interest as a property owner or property manager.
Creating a property management contract can be quite challenging. This is why it is recommended that you use a management contract template. This template comes with the basics of a property agreement. All you have to do is adapt it to your needs.
These templates come in editable format, which means you can edit and customize them on-the-go. Both parties can also append their signature electronically without printing any documents. You can be sure to find a reputable website that offers property management contract templates that you can use.