Property Management Agreement for Short Term Rentals

PROPERTY MANAGEMENT AGREEMENT FOR SHORT-TERM RENTALS

1. DOCUMENT PREAMBLE & RECITALS

THIS PROPERTY MANAGEMENT AGREEMENT FOR SHORT-TERM RENTALS (the "Agreement") is entered into and made effective as of this _____ day of ______________, 20 (the "Effective Date"), by and between:

OWNER: __________________________________________________ [Insert Legal Name of Property Owner/Entity], having a primary address at __________________________________________________ [Insert Address] (hereinafter referred to as the "Owner"), and

MANAGER: __________________________________________________ [Insert Legal Name of Management Company], a __________________________________________________ [Insert State of Incorporation and Entity Type, e.g., Delaware corporation / limited liability company], having a primary place of business at __________________________________________________ [Insert Address] (hereinafter referred to as the "Manager").

RECITALS

WHEREAS, Owner is the lawful owner or holds authorized leasehold rights with full legal authority to lease and operate the real property and improvements located at __________________________________________________ [Insert Full Property Address] (the "Property");

WHEREAS, Manager is engaged in the professional business of operating, marketing, and managing residential real estate as short-term rental accommodations and possesses the requisite expertise, personnel, and operational infrastructure; and

WHEREAS, Owner desires to retain Manager to exclusively manage, market, maintain, and operate the Property as a short-term rental, and Manager accepts such retention under the terms and conditions set forth herein;

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

---

2. OPERATIONAL DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings ascribed below, and such definitions shall apply equally to the singular and plural forms of the terms defined:

1. "Gross Rental Revenue" means the total gross proceeds, income, and consideration actually collected from Guests for the occupancy of the Property, including nightly rental rates, cleaning fees, and resort fees, but expressly excluding state, county, and municipal occupancy taxes, transient occupancy taxes, and sales taxes collected and remitted directly by Third-Party Platforms.
2. "Management Fee" means the compensation due to Manager, calculated as ________ percent (________%) of the Monthly Gross Rental Revenue, payable in arrears pursuant to Section 3.
3. "Operating Reserve Fund" means the initial and replenishing monetary reserve established by the Owner in the amount of $__________________, held by Manager in a designated escrow or operating account to defray immediate expenses, emergency repairs, and operational outlays.
4. "Third-Party Platforms" means online travel agencies, booking channels, and distribution networks utilized for marketing and securing reservations for the Property, including but not limited to Airbnb, Vrbo, Booking.com, and the Manager's direct-booking website.
5. "Guest" means any transient consumer, licensee, or invitee who has executed a valid short-term rental agreement and occupies the Property for a term of less than thirty (30) consecutive days.
6. "Force Majeure Event" means acts of God, natural disasters, war, civil unrest, acts of terrorism, epidemic, pandemic, governmental travel restrictions, utility failures, or other catastrophic events beyond the reasonable control of the affected Party.
7. "Maintenance Threshold" means the maximum dollar expenditure ($__________________) Manager is authorized to incur for routine, non-emergency maintenance and repairs per single occurrence without securing prior written consent from Owner.

---

3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1. Appointment and Exclusivity

Owner hereby grants to Manager the sole and exclusive right to rent, market, manage, operate, and maintain the Property as a short-term rental during the Term of this Agreement. Owner covenants that it shall not list the Property on any Third-Party Platform independently, nor retain any other agent, broker, or property manager to perform similar services with respect to the Property.

3.2. Term

This Agreement shall commence on the Effective Date and shall continue for a period of ________ (________) years (the "Initial Term"). Upon the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of one (1) year each (each a "Renewal Term"), unless either Party provides written notice of non-renewal to the other Party at least sixty (60) days prior to the expiration of the then-current term.

3.3. Manager Duties and Operational Authority

Manager shall use commercially reasonable efforts to maximize Gross Rental Revenue and maintain the Property in a high-standard operating condition. Manager's operational duties shall include:

1. Marketing and Listing Optimization: Creating, publishing, and managing professional listings across Third-Party Platforms, including dynamic pricing optimization, professional photography coordination, and search engine positioning.
2. Reservation Management: Screening prospective Guests, processing reservations, collecting all rental fees and deposits, executing binding Guest occupancy agreements, and managing cancellation policies.
3. Guest Communication & Concierge Services: Providing 24/7 communication channels for Guests prior to, during, and immediately following their stay, including handling check-ins, troubleshooting operational inquiries, and managing emergency incidents.
4. Housekeeping and Turnover: Coordinating professional cleaning, laundry, staging, and restock services following the departure of each Guest, the costs of which shall be borne by the Guest or Owner as designated herein.
5. Maintenance and Repairs: Arranging for routine maintenance, minor repairs, and urgent remediation services utilizing licensed and insured third-party vendors.

3.4. Owner Representations, Warranties, and Covenants

Owner represents, warrants, and covenants to Manager that:

1. Legal Authority: Owner possesses absolute fee simple title or valid master leasehold rights to the Property, with full legal capacity and unencumbered authority to execute this Agreement and subject the Property to short-term rental operations.
2. Compliance with Laws: The Property complies with all applicable federal, state, and municipal zoning ordinances, building codes, health regulations, condominium/HOA bylaws, and short-term rental licensing requirements. Owner shall secure and maintain, at its sole expense, all required municipal short-term rental permits, licenses, and tax registration certificates.
3. Insurance: Owner shall maintain, at its sole expense, a comprehensive homeowner’s or commercial general liability insurance policy, inclusive of specific short-term rental endorsement coverage, with a minimum combined single limit of $__________________ per occurrence. Manager shall be named as an additional insured on said policy. Owner shall provide a Certificate of Insurance evidencing such coverage to Manager upon execution of this Agreement.
4. Safety Compliance: The Property is equipped with operational smoke detectors, carbon monoxide detectors, fire extinguishers, and meets all statutory life-safety standards.

3.5. Financial Accounting, Disbursements, and Compensation

1. Trust Accounts: Manager shall maintain all funds collected from Guests on behalf of Owner in a designated custodial or trust account segregated from Manager’s operating funds, in compliance with applicable state real estate brokerage laws.
2. Monthly Statements and Disbursements: On or before the fifteenth (15th) day of each calendar month, Manager shall provide Owner with an accounting statement detailing all Gross Rental Revenue collected, expenses incurred, taxes withheld, and the Management Fee deducted for the preceding calendar month, accompanied by the net disbursement via electronic funds transfer (ACH) to Owner's designated bank account.
3. Management Fee: Owner shall pay to Manager the Management Fee as defined in Section 2. The Management Fee shall be automatically deducted by Manager from Gross Rental Revenue prior to calculating the net monthly disbursement due to Owner.
4. Taxes: Manager shall collect and remit transient occupancy, sales, and lodging taxes directly to the applicable taxing authorities where such collection is automated by Third-Party Platforms. To the extent taxes are not remitted by platforms, Manager shall calculate and remit same on behalf of Owner, provided sufficient funds are available in the operating account.

---

4. DEFAULT, TERMINATION, AND REMEDIES

4.1. Events of Default

The occurrence of any of the following shall constitute a material breach and "Event of Default" under this Agreement:

1. Failure of either Party to pay any monetary sum due under this Agreement within ten (10) business days following receipt of written notice demanding the same.
2. Failure of either Party to perform, keep, or fulfill any material non-monetary covenant, undertaking, or obligation contained herein.
3. The filing of a petition in bankruptcy or insolvency by or against a Party, or an assignment for the benefit of creditors, or the appointment of a receiver.
4. Revocation, suspension, or material violation of any municipal short-term rental permit or license attributable to Owner’s acts or omissions.
5. Gross negligence, fraud, willful misconduct, or misappropriation of funds by either Party.

4.2. Notice and Cure Periods

Except as otherwise expressly set forth herein, if a Party commits an Event of Default, the non-defaulting Party shall provide written notice detailing the specific nature of the default. The defaulting Party shall have a period of thirty (30) business days from the receipt of such notice to cure the default. If the default is incapable of being cured within thirty (30) business days through the exercise of due diligence, and the defaulting Party commences and diligently pursues a cure within such period, the cure period shall be extended for an additional thirty (30) days, not to exceed sixty (60) total business days.

4.3. Termination Rights

1. Termination for Cause: If an Event of Default is not cured within the applicable cure period set forth in Section 4.2, the non-defaulting Party may terminate this Agreement immediately upon written notice to the defaulting Party.
2. Termination for Convenience: Owner may terminate this Agreement for convenience upon providing sixty (60) days prior written notice to Manager; provided, however, that such termination shall not affect any confirmed Guest reservations booked prior to the effective date of termination. Manager shall retain the right to service such confirmed reservations, or Owner shall assume liability for relocating Guests and reimbursing Manager for lost Management Fees associated with such cancellations.

4.4. Remedies and Legal Recourse

Upon termination or default, the non-defaulting Party may pursue any and all remedies available at law or in equity, including injunctive relief, specific performance, and recovery of actual monetary damages. In the event of litigation or arbitration arising out of this Agreement, the prevailing Party shall be entitled to recover all reasonable costs incurred, including reasonable attorneys' fees, court costs, and expert witness fees.

---

5. BOILERPLATE LEGAL PROVISIONS

5.1. Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court or arbitrator of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable. The remaining provisions of this Agreement shall remain in full force and effect and shall not be affected, impaired, or invalidated.

5.2. Entire Agreement

This Agreement, together with any attached exhibits, schedules, and addenda, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior oral or written agreements, negotiations, commitments, and understandings between Owner and Manager. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless executed in writing by both Parties.

5.3. Force Majeure

Neither Party shall be held liable or deemed in default for any failure or delay in fulfilling or performing obligations under this Agreement when such failure or delay results directly from a Force Majeure Event. The performance obligations of the affected Party shall be suspended for the duration of such event, provided that the affected Party uses commercially reasonable efforts to mitigate the effects of the event and resumes performance as soon as practicable.

5.4. Governing Law and Jurisdiction

This Agreement shall be construed, interpreted, and governed by the laws of the State of __________________ [Insert State], without regard to its conflict of laws principles. The Parties irrevocably submit to the exclusive personal jurisdiction of the state and federal courts located within __________________ County, __________________ [Insert State].

5.5. Dispute Resolution and Arbitration

Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement, including the breach, termination, or validity thereof, shall be finally resolved by binding arbitration administered by the American Arbitration Association (AAA) under its Commercial Arbitration Rules. The place of arbitration shall be __________________ [Insert City, State]. The arbitration shall be conducted by a single neutral arbitrator, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

5.6. Notices

All notices, demands, or requests required or permitted under this Agreement must be in writing and shall be deemed sufficiently given if delivered personally, sent by nationally recognized overnight courier with tracking, or transmitted via confirmed electronic mail to the respective addresses set forth in the Preamble of this Agreement.

---

6. FORMAL EXECUTION BLOCK

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

OWNER:

---

[Insert Legal Name of Owner / Entity]

By: ______________________________________________
Name: ____________________________________________
Title: _____________________________________________
Date: _____________________________________________

MANAGER:

---

[Insert Legal Name of Management Company]

By: ______________________________________________
Name: ____________________________________________
Title: _____________________________________________
Date: _____________________________________________