A property management agreement is the contract between an owner and the person managing their property, and it is a different document from anything between a landlord and a tenant. Five of its terms do nearly all the work, and they are the five most often skimmed because the fee percentage is at the top. This page is those five, for an owner reading one and a manager writing one.
Scope: what is included and what is billed
Letting, rent collection, repairs coordination, inspections, statements, and handling an end of tenancy are separable services and different agreements bundle them differently. The disputes come from the edges: is finding a new tenant included or a separate fee, who pays for the inspection, what happens in a legal process. List the included services and list the chargeable ones, with prices, rather than leaving the boundary to be discovered.
Fee basis: percentage of what
A percentage of rent collected and a percentage of rent due are different agreements, and the difference is exactly the manager's incentive when rent is late. A minimum monthly fee changes the economics for a low-rent unit. Letting fees, renewal fees and markups on contractor invoices are all common and all worth having stated. An owner who knows only the headline percentage does not know the cost.
Spending authority
A figure above which the manager must ask before spending, an exception for genuine emergencies, and how approval is given and recorded. Without a figure, every repair is either a phone call or a surprise. With one, both sides know where they are, and the exception for emergencies is what stops the clause causing damage at two in the morning.
Money handling and the exit
Where rent sits between collection and payment, when it is paid over, and how deposits are held. Then the ending: notice either side gives, what happens to tenancies in progress, and that the owner gets the full record, leases, ledgers, deposits, contacts and documents. That last clause is the one owners wish they had read, because a manager who leaves with the record leaves the owner unable to answer a tenant.
Questions people ask about property management agreement
Is a management agreement negotiable?
Usually more than owners assume, particularly the fee basis, the spending threshold and the notice period. The scope list is the part most worth adjusting to what you actually want.
What should happen to deposits if the manager changes?
They transfer with an accounting of what is held for which tenancy. That should be an explicit term rather than an assumption, because it is a statutory obligation somewhere in the chain.
Does this hub sell to managers or owners?
Lettza is the record for whoever runs the let, which is the small management company as often as the landlord. The agreement between them is a document this page explains and the product does not generate.