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What is Property Management Agreement?

Property Management Agreement Outlines terms for property management services, including rent collection, maintenance, repairs, and management fees.



Sample template:



PROPERTY MANAGEMENT AGREEMENT


This Property Management Agreement (the "Agreement") is entered into as of [Date], by and between Willowcrest Real Estate Holdings LLC, a [State of Formation] limited liability company, located at [Address] ("Owner"), and Sterling Property Management Services Inc., a [State of Formation] corporation, located at [Address] ("Manager"), collectively referred to as the "Parties".

WHEREAS, Owner is the owner of the property described in Exhibit A attached hereto (the "Property");

WHEREAS, Owner desires to retain Manager to manage and operate the Property on the terms and conditions as set forth herein;

NOW, THEREFORE, the Parties hereto agree as follows:

1. APPOINTMENT AND SCOPE OF SERVICES

1.1. Appointment


Owner hereby engages Manager, and Manager hereby agrees to perform for Owner, the property management services described in this Agreement, on and subject to the terms and conditions provided herein.



1.2. Property Management Services


Manager shall manage, operate, control, rent, lease, and maintain the Property in accordance with the services delineated hereunder:


(a) Collect all rents and other amounts due to Owner from tenants;


(b) Negotiate and execute leases, amendments, and renewals on behalf of Owner, provided such leases are subject to Owner's written approval;


(c) Serve notices, institute and prosecute evictions and other proceedings to recover possession of the Property;


(d) Engage and supervise, on Owner's behalf and at Owner's sole expense, cleaning, repair, maintenance, and other service providers;


(e) Establish and maintain a separate bank account in Manager's name as agent for Owner for the purpose of depositing all monies collected, and remit funds to Owner within a specified time;


(f) Prepare and provide Owner, on a monthly basis, a comprehensive written report detailing the financial and operational status of the Property, including rent collections and expenditures;


(g) Comply with all applicable federal, state, and local laws, ordinances, rules, and regulations governing the leasing, operation, and the ordinary course of business of residential real estate;


(h) Perform such additional duties as the Parties may agree upon, in writing, from time to time.



2. TERM AND TERMINATION

2.1. Term


This Agreement shall be for an initial term of [Years] ("Initial Term"), commencing on the date first above written. Unless either party provides the other with written notice of its intent not to renew at least [Days] before the expiration of the Initial Term, this Agreement shall automatically renew for successive [Years] renewal terms (each, a "Renewal Term").



2.2. Termination


Either party may terminate this Agreement upon [Days] written notice to the other party, provided that such notice specifies the effective date of termination. Owner may terminate this Agreement immediately for cause if Manager fails to fulfill its obligations hereunder, with written notice of termination for cause specifying the reasons therefor.



3. OWNER'S RESPONSIBILITIES

Owner shall:


(a) Provide Manager with all necessary keys, access cards, passwords, and any other items necessary to access the Property;


(b) Provide Manager with a copy of, and any amendments to, existing leases, property insurance policies, maintenance or service contracts, and any other documents or agreements deemed necessary by Manager to perform its responsibilities hereunder;


(c) Grant Manager full authority to act on Owner's behalf, in all matters related to the Property, including the authority to sign checks, pay expenses, and make disbursements on behalf of Owner, in accordance with this Agreement;


(d) Ensure that any required licenses, consents, or permits are obtained and maintained to allow the Property to be rented;


(e) Be responsible for any costs associated with correcting preexisting defects or violations of legal requirements or duty to third parties that existed before the commencement of this Agreement.



4. MANAGER'S FEES

4.1. Management Fee


Owner shall pay Manager a management fee equal to [Percentage]% of the gross monthly rent collected from the Property during the term of this Agreement, payable monthly ("Management Fee").



4.2. Additional Charges


Owner shall reimburse Manager for any other reasonable, necessary, and documented expenses incurred by Manager on behalf of the Owner. Such expenses shall include, but shall not be limited to, third-party service provider charges, legal fees, and court costs, provided that Owner shall have given its prior written consent to such expenses.



5. INDEMNIFICATION

Except for Manager's gross negligence or willful misconduct, Owner shall indemnify, defend, and hold Manager harmless, including its agents and employees, from and against any and all claims, liabilities, injuries, damages, costs, or expenses, including reasonable attorney's fees and court costs, arising out of or in connection with the Property, this Agreement, or the performance or nonperformance of Owner's or Manager's duties hereunder.



6. INDEPENDENT CONTRACTOR RELATIONSHIP

Manager is an independent contractor, and nothing in this Agreement shall be construed to create an employer-employee, principal-agent, or partnership relationship between the Parties.



7. NOTICES

All notices, requests, or other communications required or permitted hereunder shall be in writing and shall be deemed duly given if delivered personally, sent by email, or mailed by certified or registered mail, postage prepaid, to the addresses provided by the Parties in this Agreement, or to such other address as either party shall designate by notice given in accordance herewith.



8. APPLICABLE LAW AND DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of the United States and the laws of the State of [State], without regard to its conflict of laws principles. Any dispute arising out of or in connection with this Agreement shall be resolved through good faith negotiations, or, in the event that the Parties are unable to resolve the dispute through negotiation, then such dispute shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration proceeding shall take place in the city and state where the Property is located, and judgment upon the award rendered by the arbitrator may be entered in a court having jurisdiction thereof.



9. ENTIRE AGREEMENT

This Agreement, including Exhibit A (describing the Property), sets forth the entire understanding and agreement between the Parties, and supersedes all prior or contemporaneous negotiations, representations, understandings, or agreements, whether written or oral, relating to the subject matter hereof. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.



IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

Willowcrest Real Estate Holdings LLC Sterling Property Management Services Inc.
By: [Owner Signature] By: [Manager Signature]
Name: [Owner Name] Name: [Manager Name]
Title: [Owner Title] Title: [Manager Title]

EXHIBIT A
[Description of the Property]

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Common Sections of a Property Management Agreement


In this Property Management Agreement, you will see the following sections:

  1. Appointment and Scope of Services
  2. Term and Termination
  3. Owner's Responsibilities
  4. Manager's Fees
  5. Indemnification
  6. Independent Contractor Relationship
  7. Notices
  8. Applicable Law and Dispute Resolution
  9. Entire Agreement


Going indepth - Analysis of each section:

  1. Appointment and Scope of Services : This section outlines the responsibilities of the property manager, such as collecting rent, negotiating leases, and maintaining the property. It's like hiring a caretaker for your property who will handle all the day-to-day tasks on your behalf.

  2. Term and Termination : This part explains how long the agreement will last and how either party can end it. It's similar to a gym membership, where you sign up for a certain period and can cancel it with proper notice.

  3. Owner's Responsibilities : This section lists the duties of the property owner, such as providing access to the property and ensuring necessary licenses are obtained. It's like being a car owner who must provide keys and registration documents to a mechanic for repairs.

  4. Manager's Fees : This part details the fees the property owner will pay the manager, including a percentage of rent collected and reimbursement for certain expenses. It's like paying a commission to a salesperson for selling your products.

  5. Indemnification : This section states that the property owner will protect the manager from any legal claims or expenses, except in cases of gross negligence or willful misconduct. It's like agreeing to cover someone's back in case of trouble, as long as they didn't cause it intentionally or through extreme carelessness.

  6. Independent Contractor Relationship : This part clarifies that the manager is not an employee or partner of the property owner, but an independent contractor. It's like hiring a freelancer for a project instead of adding them to your company's payroll.

  7. Notices : This section explains how the parties should communicate with each other, such as through written notices or emails. It's like setting up a system for exchanging messages and updates between friends.

  8. Applicable Law and Dispute Resolution : This part states that the agreement is governed by specific laws and any disputes will be resolved through negotiation or arbitration. It's like agreeing to play a game by certain rules and settling disagreements through a referee or mediator.

  9. Entire Agreement : This section confirms that the agreement is the complete understanding between the parties and replaces any previous discussions or agreements. It's like saying that this document is the final word on the matter, and nothing else counts.

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