A property management agreement is a legally binding document between a property owner and a property management company. This agreement outlines the terms and conditions of the working relationship between the two parties. It`s important for property owners to understand what is typically included in a property management agreement before signing one. This can help ensure that the agreement meets their needs and protects their interests.
Here are some of the key components that are typically included in a property management agreement:
1. Property management services: This section outlines the scope of services that the property management company will provide. This may include regular property inspections, tenant screening, rent collection, maintenance and repairs, handling tenant complaints, and other related services.
2. Responsibilities of the property owner: This section outlines the responsibilities of the property owner, such as providing necessary funds for repairs, maintaining insurance coverage, and providing access to the property for inspections and repairs.
3. Fees and compensation: This section outlines the fees that the property management company will charge for their services. This may include a monthly management fee, leasing commission, maintenance and repair fees, and other related charges.
4. Term and termination: This section outlines the length of the agreement and the circumstances under which either party can terminate the agreement. For example, the property owner may be able to terminate the agreement if the property management company is not performing their duties as outlined in the agreement.
5. Confidentiality and privacy: This section outlines the confidentiality and privacy obligations of both parties. This may include requirements to protect sensitive information about the property or tenants.
6. Dispute resolution: This section outlines the process for resolving disputes between the property owner and the property management company. This may involve mediation or arbitration to avoid going to court.
7. Other provisions: Depending on the specific needs of the property owner, the property management agreement may include other provisions, such as requirements for background checks on tenants, rent increases, or other related matters.
In summary, a property management agreement typically includes the services the management company will provide, the responsibilities of the property owner, the fees and compensation, the term and termination, confidentiality and privacy requirements, dispute resolution, and any other necessary provisions. Understanding these components can help property owners to ensure that they are getting the services they need from their property management company, and that their interests are protected.