What Does Your Property Management Agreement Contain?
Hiring a property manager for your property means that you’re allowing them to look after all the day-to-day activities related to your property and its tenants. A property manager can be of substantial help, allowing you to run your property and its related activities smoothly. However, hiring a property manager doesn’t come cheap. Property management services can be costly, depending on the scope of work that you want them to take care of.
Before a property manager can start looking after your property, you need to sign a property management agreement with them that officially binds them to you. If you’ve never worked with a property management company before, you may want to know what the essential contents of a property management agreement are. This blog post is focused on discussing the essential contents that every property management agreement comprises of.
What Duties Will the Property Manager Perform
A property manager is responsible for looking after all the tasks related to your property and the tenants. From marketing your property to finding the right tenants to basic maintenance and upkeep of your property to entertaining tenant complaints and finally rent collection, a property manager does it all. Every property management agreement lists down in black in white what the property manager will be responsible for doing. The property manager can be held accountable only for things that are a part of the agreement.
Another important component of a property management agreement is the fees that a landlord is required to pay the property manager. Most of the property managers charge a fixed fee. Some may charge based on the rent that is collected. You may also come across property managers whose charges vary with the size and type of property. The property management agreement will have it all mentioned clearly so that there is no source of confusion in the future.
Legal Liabilities of a Property Manager
A property manager can be held liable as per the law for issues like injuries, bed bugs, crimes or vandalism at the property. However, you can’t hold a property manager liable if your property management agreement doesn’t state so. Most property managers want the things they will be held liable for and the things they can’t be held liable for to be mentioned in clear words in the agreement. It saves trouble in the future, for both the landlord and the property manager.
If a certain situation arises at your property for which the law allows you to hold your property manager liable but your agreement doesn’t state so, you can’t take any action against your property manager. Do you see how important this part of the property management agreement is?
What Will the Owner Be Responsible For
Just like the responsibilities of a property manager are a part of the agreement, the responsibilities of the owner are also included. If there is anything that you wish for the property manager to do but miss out on it in the agreement, the responsibility will fall on your shoulders. You can’t ask your property manager to do something that isn’t mentioned in the document. Similarly, if there is something specific that you want to keep in your hands, make sure to include it under your responsibilities in black and white.
Terms of Contract
The terms of contract form one of the most critical parts of any property management agreement. The agreement should include all the dates, from the date when the contract period starts up till the date when it ends. Not only this, but your property management agreement should also have the grounds of contract termination listed down clearly. The point of including such critical points in the agreement is to ensure that things move smoothly throughout the contract term and goodwill persists between the landlord and the property manager.
You will only be able to tell if an agreement is complete if you know what it should contain. Understanding the contents of a property management agreement is important to ensure that you don’t miss out on any crucial points that may create problems in the future.