Property Management Agreement
Edit Template
This Property Management Agreement (the “Agreement”) is made and effective [DATE],
BETWEEN: [YOUR COMPANY NAME] (the "Owner"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:
[YOUR COMPLETE ADDRESS]
AND: [AGENT NAME] (the "Agent"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:
[COMPLETE ADDRESS]
RECITALS
Owner holds title to the following-described real property:
[insert legal or other appropriate description], here referred to as the property.
Agent is experienced in the business of operating and managing real estate similar to the above-described property.
Owner desires to engage the services of agent to manage and operate the property, and agent desires to provide such services on the following terms and conditions.
In consideration of the mutual covenants contained herein, the parties agree:
EMPLOYMENT OF AGENT
Agent shall act as the exclusive agent of owner to manage, operate and maintain the property.
BEST EFFORTS OF AGENT
On assuming the management and operation of the property, agent shall thoroughly inspect the property and submit a written report to owner. The written report shall contain the opinion of agent concerning the present efficiency under which the property is being managed and operated, and recommended changes, if necessary, in the management structure of the property, in the rehabilitation of the property, and any other matters that will improve the efficient management and operation of the property. After conferring with owner and obtaining approval to make any necessary improvements, agent shall undertake completion of the improvements.
LEASING OF PROPERTY
Agent shall make reasonable efforts to lease available space of the property, and shall be responsible for all negotiations with prospective tenants. Agent shall also have the right to execute and enter into, on behalf of owner, month-to-month tenancies of units of the property. Agent may negotiate all extensions and renewals of such month-to-month tenancies and leases. Agent shall not, without the prior written consent of owner, enter into any lease for a term less than [NUMBER] months or more than [NUMBER] months. Agent shall have the right to make concessions, including rental concessions, as inducements to prospective tenants to occupy the property.
ADVERTISING AND PROMOTION
Agent shall advertise vacancies by all reasonable and proper means; provided, agent shall not incur expenses for advertising in excess of [AMOUNT] during any calendar quarter without the prior written consent of owner.
MAINTENANCE, REPAIRS AND OPERATIONS
Agent shall use its best efforts to insure that the property is maintained in an attractive condition and in a good state of repair. In this regard, agent shall use its best skills and efforts to serve the tenants of the property and shall purchase necessary supplies, make contracts for, or otherwise furnish, electricity, gas, fuel, water, telephone, window cleaning, refuse disposal, pest control, and any other utilities or services required for the operation of the property. Agent shall make or cause to be made and supervise necessary repairs and alterations and shall decorate and furnish the property. Expenditures for repairs, alterations, decorations or furnishings in excess of [AMOUNT] shall not be made without prior written consent of owner, except in the case of emergency, or if agent in good faith determines that such expenditures are necessary to protect the property from damage, to prevent injury to persons or loss of life, or to maintain services to tenants.
EMPLOYEES
Agent shall employ, discharge and supervise all on-site employees or contractors required for the efficient operation and maintenance of the property. All on-site personnel, except independent contractors and employees of independent contractors, shall be the employees of agent. Agent shall pay the salaries of such on-site employees and, to the extent there are revenues from the property available, pay all charges for services rendered by independent contractors and the employees of independent contractors.
All salaries (including all contributions of employer not listed in the paycheck) of such on-site employees shall be charged to owner. To the extent there are insufficient funds available from revenues received from the operation of the property to reimburse agent for such salaries, owner shall directly reimburse agent within [NUMBER] days after demand by agent for reimbursement. Agent shall not be responsible or liable to owner for any act, default or negligence of on-site personnel, or for any error of judgment or mistake of law or fact in connection with their employment, conduct or discharge except that agent shall be responsible for any such act, default or negligence that is due directly or indirectly to its own negligent act or omission in the hiring or supervision of any such on-site personnel.
On-site personnel shall include all resident personnel, including, but not limited to, managers and maintenance personnel, all recreational personnel (whether part-time or full-time), day-care center personnel, and all other individuals located, rendering services or performing activities on the property in connection with its operation.
GOVERNMENT REGULATIONS
Agent shall manage the property in full compliance with all laws and regulations of any federal, state, county or municipal authority having jurisdiction over the property.
INSURANCE
Agent shall obtain the following insurance at the expense of owner, and such insurance shall be maintained in force during the full term of this agreement:
Comprehensive public liability property insurance of [AMOUNT] single limit for bodily injury, death and property damage;
Fire and extended coverage hazard insurance in an amount equal to the full replacement cost of the structure and other improvements situated on the property; and
A fidelity bond in the amount of [AMOUNT] on each employee who handles cash, and workers’ compensation and employer liability insurance to cover the agents and employees of both employer and agent.
All of the policies shall name agent and owner as co-insureds as their respective interests may appear. Agent shall deliver certificates evidencing such insurance coverage to owner within [NUMBER] days from the issuance and renewal of the policies. Owner shall cooperate with agent and any insurer in the making and delivery of all reports, notices, and other items required in connection with any of the insurance policies.
COLLECTION OF INCOME; INSTITUTION OF LEGAL ACTION
Agent shall use its best efforts to collect promptly all rents and other income issuing from the property when such amounts become due. It is understood that agent does not guarantee the collection of rents.
Agent shall, in the name of owner, execute and serve such notices and demands on delinquent tenants as agent may deem necessary or proper. Agent, in the name of owners, shall institute, settle or compromise any legal action and make use of such methods of legal process against a delinquent tenant or the property of a delinquent tenant as may be necessary to enforce the collection of rent or other sums due from the tenant, to enforce any covenants or conditions of any lease or month-to-month rental agreement, and to recover possession of any part of the property. No other form of legal action will be instituted and no settlement, compromise, or adjustment of any matters involved therein shall be made without the prior written consent of owner, except when agent determines that immediate action is necessary.
BANK ACCOUNTS
Agent shall deposit (either directly or in a depositary bank for transmittal) all revenues from the property into the general property management trust fund of agent, here referred to as the trust account. Agent shall not commingle any of the above-described revenues with any funds or other property of agent. From the revenues deposited in the trust account, agent shall pay all items with respect to the property for which payment is provided in this agreement, including the compensation of agent and deposits to the reserve accounts as provided for in Section Eleven. After such payments agent shall remit any balance of any monthly revenues to owner concurrently with the delivery of the monthly report referred to in Section Twelve.
RESERVE ACCOUNT
Agent shall establish a reserve account for the following items: taxes, assessments, debt service, insurance premiums, repairs (other than normal maintenance), replacement of personal property, and refundable deposits. Agent shall use its best judgment in transferring adequate funds from the trust account to the reserve account in order to pay the above items without incurring late pay interest fees, cancellations or forfeitures. If the reserve account contains inadequate funds to pay any of the above items, agent must obtain approval from owner before paying the items directly from the trust account. If owner determines that the funds in the reserve account are excessive, owner shall direct that agent return such excess funds to the trust account. The reserve account shall be maintained in an interest-bearing savings account in a national or state bank that is a member of the Federal Deposit Insurance Corporation.
Anything in this agreement to the contrary notwithstanding, agent shall not be liable for any failure or bankruptcy of any bank used as a depository of any funds maintained in the reserve account.
RECORDS AND REPORTS
Agent will keep books, accounts and records that reflect all revenues and all expenditures incurred in connection with the management and operation of the property. The books, accounts and records shall be maintained at the principal place of business of agent. Agent shall, during regular business hours, make the books, accounts and records required to be maintained hereunder available to owner or the representatives of owner for examination and audit by appointment on no less than [NUMBER] days’ prior notice. All such audits shall be at the expense of owner.
Agent shall furnish owner, no later than the end of the next succeeding month, a detailed statement of all revenues and expenditures for each preceding month, a summary of all concessions and rental concessions given to induce prospective tenants to occupy the property, the original copy of all invoices, statements, purchase orders and billings received and paid during such preceding month, as well as such other information relating to the operation or management of the property that, in the opinion of agent, requires the attention of owner. Owner shall retain for safekeeping and store all original invoices, statements, purchase orders, billings and other documents delivered by agent with respect to the property. Owner, on payment of reasonable costs incurred by it, shall make available to agent copies of all or any portion of any invoice, statement, purchase order, billing report or other document received from agent with respect to the property.
Within [NUMBER] days after the end of each calendar year, agent shall prepare and deliver to owner a detailed statement of revenues received and expenditures incurred and paid during the calendar year that result from operations of the property. Within [NUMBER] days, following expiration or termination of this agreement, agent shall deliver to owner all books, accounts and records pertaining to the property.
COMPENSATION OF AGENT
Agent shall receive a management fee equal to [%] of the gross receipts collected from the operation of the property. Gross receipts are defined as all revenues collected plus refundable deposits. Any management fee due agent hereunder shall be paid to agent within [NUMBER] days after the end of each month.
COMMISSIONS FOR NEGOTIATING LEASES OR MONTH-TO-MONTH RENTAL AGREEMENTS
Agent shall receive no commissions or additional compensation for negotiating leases or month-to-month rental agreements with tenants.
OFFICE SPACE FOR AGENT
Owner shall allow agent to occupy the office numbered [NUMBER], on the [NUMBER] floor of the property, rent-free for the duration of this agreement. [All expenses other than rent incurred by agent in the occupation and use of this office space shall be borne by agent.]
ADDITIONAL DUTIES AND RIGHTS OF AGENT
In addition to the foregoing, agent shall perform all services that are necessary and proper for the operation and management of the property, and shall report to owner promptly any conditions concerning the property that, in the opinion of agent, require the attention of owner.
In order to properly perform the services required by this agreement, agent is authorized to engage, on behalf of owner, any entity that is an affiliate of agent, provided that the compensation paid for the services shall be competitive with nonaffiliated entities providing the same or similar services.
TERMINATION AND RENEWAL
This agreement shall be for a term commencing on [date], and ending on [date]. At the termination of this agreement, it shall be renewed automatically on a month-to-month basis that may be terminated by either party by giving not less than [NUMBER] days’ notice in writing to the other party.
TERMINATION FOR CAUSE
If agent breaches any of the terms of this agreement, owner shall give agent written notice of such breach. If agent fails to remedy the breach within [NUMBER] days after receiving the above-described notice, owner may terminate this agreement.
SALE OF PROPERTY
On the voluntary sale of the property by owner and the delivery of the deed of conveyance therefore, this agreement shall automatically terminate. Owner shall notify agent of the sale of the property as soon as such sale is negotiated.
CONDEMNATION
This agreement shall terminate in the event of a total condemnation of the property. If there is a partial condemnation of the property, this agreement may be terminated at the option of owner. If such a partial condemnation of the property reduces the compensation of agent by more than [%], agent may terminate this agreement. Owner shall be entitled to all consequential damages awarded as a result of any eminent domain proceeding.
BANKRUPTCY
If bankruptcy proceedings, whether voluntary or involuntary, are commenced against either owner or agent, or if either party enters into a composition agreement with its creditors, either party may terminate this agreement by giving [NUMBER] days’ written notice to the other party.
NO PROPERTY INTEREST CREATED
Nothing contained in this agreement shall be deemed to create or shall be construed as creating in agent any property interest in or to the property.
LICENSING OF AGENT
Agent shall at all times during the term of this agreement maintain such licenses and permits as are required for any of the various services to be performed by agent on behalf of owner.
RELATIONSHIP OF THE PARTIES
Agent is an independent contractor and not an employee of owner for any purpose.
COVENANTS AND CONDITIONS
All of the terms and conditions of this agreement are expressly intended to be construed as covenants as well as conditions.
NOTICE
All notices, requests, demands or other communications hereunder shall be in writing, and shall be deemed to have been duly given if delivered in person, or within [NUMBER] days after deposited in the mail, postage prepaid, certified, with return receipt requested, or otherwise actually delivered to owner at
ATTN. [NAME], [YOUR COMPANY NAME], [YOUR COMPLETE ADDRESS], [YOUR FAX NUMBER].
or to agent at
ATTN. [NAME], [COMPANY NAME], [COMPLETE ADDRESS], [FAX NUMBER].
Either party hereto may change the address at which it receives written notices by so notifying the other party hereto in writing.
PARTIES BOUND; ASSIGNMENT
This agreement shall be binding on and inure to the benefit of the successors and assigns of the parties hereto, and their respective successors and assigns; provided, however, that this agreement may not be assigned by agent without prior written consent of owner, or by owner without prior written consent of agent. Anything in the foregoing to the contrary notwithstanding, agent may, without the consent of owner, delegate the performance of (but not responsibility for) any duties and obligations of agent to any independent contractor or entity.
EFFECT OF PARTIAL INVALIDITY
Should any section or any part of any section of this agreement be rendered void, invalid or unenforceable for any reason by any court of law exercising competent jurisdiction, such a determination shall not render void, invalid or unenforceable any other section or any part of any section in this agreement.
GOVERNING LAW
This agreement has been made and entered into in the [State/Province] of [STATE/PROVINCE], and the laws of such state shall govern the validity and interpretation of this agreement and the performance due hereunder.
INTEGRATION
The drafting, execution and delivery of this agreement by the parties have been induced by no representations, statements, warranties or agreements other than those expressed in this agreement. This agreement embodies the entire understanding of the parties, and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof unless expressly referred to in this agreement.
ARBITRATION
In case of any dispute regarding any terms or performance of the terms of this agreement, the dispute shall be subject to arbitration in accordance with the rules and regulations then obtaining under the [ASSOCIATION/ORGANIZATION].
ATTORNEY FEES
Should either party bring suit to enforce any of the terms of this agreement, the prevailing party shall be entitled to recover court costs and reasonable attorney fees.
MODIFICATION
This agreement may not be modified unless such modification is in writing and signed by both parties to this agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
LESSOR LESSEE
Authorized Signature Authorized Signature
Print Name and Title Print Name and Title