Contract for Property Management Template

CONTRACT FOR PROPERTY MANAGEMENT TEMPLATE

1. Document Preamble & Recitals

This Contract for Property Management (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and between:

Owner: [Owner/Entity Name], having its principal place of business/residence at [Owner Address] (hereinafter referred to as the "Owner"), and

Manager: [Property Management Company Name], a [State of Incorporation, e.g., Delaware corporation], having its principal place of business at [Manager Address] (hereinafter referred to as the "Manager").

Recitals

WHEREAS, Owner is the lawful owner or authorized leaseholder of certain real property located at [Property Address], more particularly described in Exhibit A attached hereto (the "Property"); and

WHEREAS, Owner desires to retain Manager to provide comprehensive leasing, operational, maintenance, and administrative management services for the Property, and Manager desires to accept such appointment under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants, representations, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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2. Operational Definitions

For purposes of this Agreement, the following terms shall have the meanings ascribed below:

1. "Gross Receipts" means all monies, revenues, rents, issues, and profits collected from the operation of the Property, including but not limited to base rent, percentage rent, utility reimbursements, parking fees, application fees, laundry and vending machine income, and forfeiture of security deposits, excluding only refundable security deposits prior to application, condemnation awards, and proceeds from the sale or refinancing of the Property.
2. "Operating Expenses" means all reasonable and necessary costs and expenses incurred by Manager in the day-to-day operation, maintenance, upkeep, and management of the Property pursuant to the approved Annual Operating Budget, including utilities, routine maintenance, payroll taxes, on-site personnel wages, vendor fees, and ordinary legal or accounting costs directly associated with Property operations.
3. "Reserve Fund" means the minimum operating capital account established by Owner in the amount of [Dollar Amount] maintained in a designated segregated custodial bank account for the payment of emergency, immediate, and operational expenses of the Property.
4. "Lease" means any residential, commercial, or mixed-use lease agreement, tenancy-at-sufferance, or occupancy license executed by Manager on behalf of Owner, or by Owner directly with Manager's concurrence, relating to space within the Property.
5. "Force Majeure Event" means acts of God, natural disasters, war, civil unrest, terrorism, epidemics, pandemics, government decrees, strikes, failure of utility services, or other unforeseen events beyond the reasonable control of the affected Party, rendering performance commercially impracticable.
6. "Annual Operating Budget" means the detailed forecast of projected income and Operating Expenses for the upcoming fiscal year, prepared by Manager and approved in writing by Owner pursuant to Section 3.

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3. Substantive Terms & Obligations

3.1 Appointment and Authority

Owner hereby grants to Manager the exclusive right, power, and authority to lease, manage, operate, and maintain the Property, and to collect all Gross Receipts therefrom. Manager accepts this appointment and agrees to use its commercially reasonable efforts, skill, and judgment in the execution of its duties hereunder.

3.2 Leasing and Tenant Relations

1. Marketing & Advertising: Manager shall actively market vacant units utilizing standard commercial advertising channels, digital listings, and local signage, incurring reasonable marketing costs within the approved Annual Operating Budget.
2. Screening & Execution: Manager shall vet all prospective tenants through standard background, credit, criminal, and employment verification checks. Manager is authorized to execute, renew, modify, or terminate Leases on behalf of Owner in compliance with applicable federal, state, and local fair housing laws.
3. Rent Collection: Manager shall collect all rents, fees, and other charges due from tenants. All collections shall be deposited promptly into the designated Trust Account established pursuant to Section 3.6.

3.3 Maintenance, Repairs, and Capital Improvements

1. Routine Maintenance: Manager shall maintain the Property in a clean, safe, and habitable condition, contracting for necessary janitorial, landscaping, painting, and general repair services.
2. Emergency Repairs: Manager is authorized to expend up to [Dollar Amount] per single occurrence without prior Owner approval for emergency repairs immediately necessary to protect the structural integrity of the Property, prevent injury to persons, or avoid imminent property damage.
3. Capital Expenditures: Any single repair, alteration, or capital improvement exceeding [Dollar Amount] shall require the prior written consent of Owner, except where mandated by governmental authorities or required under emergency circumstances.

3.4 Financial Management and Reporting

1. Budget Preparation: No later than [Number] days prior to the commencement of each fiscal year, Manager shall submit a proposed Annual Operating Budget to Owner for written approval.
2. Accounting & Records: Manager shall maintain complete, accurate, and separate books of account regarding all financial transactions of the Property using standard accounting software. Owner or its authorized representatives shall have the right to inspect and audit such books upon reasonable prior written notice.
3. Monthly Statements: Manager shall deliver to Owner, on or before the [Day, e.g., 15th] day of each calendar month, an accounting statement detailing all Gross Receipts, Operating Expenses, disbursements, and net cash flow for the preceding month, accompanied by the net disbursement check or electronic wire transfer payable to Owner.

3.5 Management Compensation

1. Management Fee: Owner shall pay Manager a monthly management fee equal to [Percentage, e.g., 6%] of the Gross Receipts collected during that calendar month, or a flat fee of [Dollar Amount], whichever is greater.
2. Leasing Commissions: For each new Lease executed, Owner shall pay Manager a leasing commission equal to [Percentage/Amount]. For Lease renewals, Owner shall pay [Percentage/Amount].
3. Timing of Payment: Management fees and commissions shall be deducted directly by Manager from the operational proceeds deposited in the Trust Account prior to monthly remittances to Owner.

3.6 Trust Accounts

All monies collected by Manager on behalf of Owner (including security deposits and rents) shall be deposited into a dedicated custodial trust account held at an FDIC-insured financial institution separate from Manager’s corporate accounts, designated as [Trust Account Name/Number]. Security deposits shall be handled strictly in accordance with applicable [Jurisdiction] statutory requirements.

3.7 Representations and Warranties

1. Owner Representations: Owner represents and warrants that it holds fee simple or leasehold title to the Property, possesses full legal capacity to enter into this Agreement, and that the Property complies with all applicable zoning, building, environmental, and safety codes.
2. Manager Representations: Manager represents and warrants that it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation, holds all necessary real estate broker licenses required by [Jurisdiction], and possesses the requisite expertise to perform the services outlined herein.

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4. Default, Termination, and Remedies

4.1 Breach Classifications

A Party shall be in default under this Agreement upon the occurrence of any of the following:

1. Financial Default: Failure by Owner to pay management fees, replenish the Reserve Fund, or fund approved operating shortfalls within [Number, e.g., 10] calendar days of written notice; or failure by Manager to remit collected rents due to Owner within the timeframe specified in Section 3.4.
2. Performance Default: Material breach by either Party of any non-financial covenant, obligation, or representation contained herein.

4.2 Notice and Cure Periods

Except as otherwise provided herein, the non-defaulting Party shall provide written notice of default specifying the exact nature of the breach. The defaulting Party shall have a period of thirty (30) business days from the receipt of such notice to cure said default (the "Cure Period"). If the default is not susceptible to cure within thirty (30) business days through the exercise of diligent commercial efforts, but the defaulting Party has commenced and is actively prosecuting a cure, the Cure Period may be extended for an additional period not to exceed [Number] days, upon written agreement of the Parties.

4.3 Termination Rights

1. Termination for Cause: Either Party may terminate this Agreement immediately upon written notice if the other Party commits an uncured material default following the expiration of the applicable Cure Period, or in the event of bankruptcy, insolvency, receivership, or assignment for the benefit of creditors of the other Party.
2. Termination Without Cause: Owner or Manager may terminate this Agreement without cause upon providing [Number, e.g., 60] days' prior written notice to the other Party.

4.4 Obligations upon Termination

Upon the effective date of termination of this Agreement:

1. Manager shall deliver to Owner all books, records, accounts, keys, security deposit records, active Leases, and unexpended funds belonging to Owner within [Number, e.g., 10] business days.
2. Manager shall submit a final accounting statement and transfer all balances remaining in the Trust Account (less any legitimate final management fees, outstanding expenses, and contractual closeout costs) to an account designated by Owner.
3. Owner shall assume all outstanding legal contracts and vendor agreements entered into by Manager on behalf of Owner in good faith pursuant to this Agreement, provided such contracts were approved or authorized within the Annual Operating Budget.

4.5 Legal Recourse and Remedies

In the event of a breach, the non-defaulting Party shall be entitled to exercise all remedies available at law or in equity, including specific performance, injunctive relief, and recovery of actual damages. The prevailing Party in any legal action, arbitration, or proceeding arising out of this Agreement shall be entitled to recover its reasonable attorneys' fees, court costs, and expert witness fees.

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5. Boilerplate Legal Provisions

5.1 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions of this Agreement shall remain in full force and effect.

5.2 Entire Agreement

This Agreement, including any exhibits and attachments referenced herein, constitutes the entire agreement between Owner and Manager regarding the subject matter hereof, and supersedes all prior oral or written agreements, negotiations, commitments, and understandings between the Parties. No modification, amendment, or waiver of any provision shall be valid unless executed in writing by both Parties.

5.3 Force Majeure

Neither Party shall be liable for any failure to perform its obligations under this Agreement if such failure stems from a Force Majeure Event, provided that the affected Party gives prompt written notice to the other Party detailing the cause and expected duration. Performance obligations shall be suspended for the duration of the Force Majeure Event, but if such event continues for more than [Number, e.g., 60] consecutive days, either Party may terminate this Agreement upon written notice.

5.4 Governing Law and Venue

This Agreement shall be construed, interpreted, and governed by the laws of the State of [Jurisdiction], without regard to its conflict of laws principles. Any legal suit, action, or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the state or federal courts located in [County, State], and each Party irrevocably submits to the exclusive personal jurisdiction of such courts.

5.5 Dispute Resolution (Mediation and Arbitration)

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled first by good-faith negotiation between the principals. If such negotiations fail within thirty (30) days, the dispute shall be submitted to binding arbitration administered by the [Arbitration Body, e.g., American Arbitration Association] in accordance with its commercial arbitration rules. The place of arbitration shall be [City, State], and the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

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6. Formal Execution Block

IN WITNESS WHEREOF, the Parties hereto have caused this Contract for Property Management to be executed by their respective duly authorized officers or representatives as of the Effective Date written above.

OWNER:

[Owner Entity Name]

Signature: [Signature]
Name: [Authorized Signatory Name]
Title: [Title, e.g., Managing Member]
Date: [Date]

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MANAGER:

[Property Management Company Name]

Signature: [Signature]
Name: [Authorized Signatory Name]
Title: [Title, e.g., President / Principal Broker]
Date: [Date]