Property Management Contract Example Pdf

PROPERTY MANAGEMENT CONTRACT

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

THE OWNER: [Owner/Company Name], a [State of Organization/Entity Type], having its principal place of business at [Owner Address] (hereinafter referred to as the "Owner"), and

THE MANAGER: [Manager/Company Name], a [State of Organization/Entity Type], having its principal place of business at [Manager Address] (hereinafter referred to as the "Agent").

RECITALS

WHEREAS, the Owner is the lawful owner or leaseholder with the legal authority to lease and manage that certain real property located at [Property Address], including all improvements, appurtenant fixtures, and common areas situated thereon (collectively, the "Property"); and

WHEREAS, the Agent is a duly licensed real estate broker or professional property management entity possessing the requisite expertise, personnel, licenses, and operational capacity to lease, maintain, and operate residential/commercial real estate; and

WHEREAS, the Owner desires to retain the Agent to exclusively manage, operate, maintain, and lease the Property, and the Agent accepts such retention upon the terms, covenants, and conditions hereinafter set forth;

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

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SECTION 1: 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:

1.1. "Affiliate" means any legal entity that directly or indirectly controls, is controlled by, or is under common control with a Party, where "control" means the ownership of more than fifty percent (50%) of the voting securities or equity interests of such entity.

1.2. "Applicable Law" means all federal, state, county, and municipal statutes, codes, ordinances, regulations, administrative rulings, executive orders, and judicial decrees applicable to the leasing, operation, maintenance, and use of the Property.

1.3. "Disbursement Account" means the segregated, insured financial account established by the Agent pursuant to Section 3.4 for the deposit of all Rents and revenues collected from the Property and the payment of Property Expenses.

1.4. "Force Majeure Event" means any act of God, war, terrorism, civil unrest, riot, labor dispute, fire, flood, earthquake, epidemic, pandemic, governmental embargo, or any other cause beyond the reasonable control of the affected Party, which could not have been prevented by the exercise of reasonable diligence.

1.5. "Gross Receipts" means all cash revenues, rents, fees, security deposits forfeited in accordance with law, and other income collected from the operation of the Property, excluding refundable security deposits held in trust and proceeds from capital financing or insurance settlements.

1.6. "Management Fee" means the compensation payable to the Agent for its services rendered under this Agreement, calculated as set forth in Section 3.2.

1.7. "Operating Reserve" means the cash sum of [Dollar Amount] ($[0.00]) to be funded and maintained by the Owner with the Agent to cover operational shortfalls and emergency expenditures.

1.8. "Property Expenses" means all ordinary and necessary costs and expenses incurred by the Agent in the operation, maintenance, repair, and administration of the Property pursuant to this Agreement, including utilities, taxes, insurance premiums, contractor fees, and routine maintenance supplies.

1.9. "Rent" means all base rent, percentage rent, utility reimbursements, parking fees, storage fees, and other monetary obligations payable by tenants pursuant to Lease Agreements.

1.10. "Tenant" means any person or entity occupying any portion of the Property pursuant to a valid Lease Agreement executed by or on behalf of the Owner.

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SECTION 2: APPOINTMENT, TERM, AND SCOPE

2.1. Appointment and Acceptance. The Owner hereby grants to the Agent the sole and exclusive right to lease, manage, operate, and control the Property, and the Agent hereby accepts such appointment, subject to the terms and conditions of this Agreement. The Agent shall act as the Owner’s sole legal agent in the execution of its duties hereunder.

2.2. Initial Term. This Agreement shall commence on the Effective Date and shall continue in full force and effect for a period of [Number] years/months, expiring on [End Date] (the "Initial Term"), unless sooner terminated in accordance with Section 4.

2.3. Renewal Terms. Upon the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of [Number] year(s) (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 Initial Term or the then-current Renewal Term.

2.4. Licensing and Compliance. The Agent represents and warrants that it holds all requisite real estate broker licenses and regulatory permits required by Applicable Law in the jurisdiction where the Property is located to perform the services contemplated herein.

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SECTION 3: SUBSTANTIVE TERMS AND OBLIGATIONS

3.1. Agent’s Duties and Authority. The Agent is authorized, empowered, and directed to perform the following operational duties with professional diligence:

• (a) Marketing and Leasing: To advertise the availability of the Property for rent; to list the Property on applicable multiple listing services and digital platforms; to vet prospective tenants through credit checks, criminal background checks, employment verification, and rental history audits; and to negotiate, execute, renew, and terminate Lease Agreements in the name of the Owner.
• (b) Rent Collection: To demand, collect, receive, and issue receipts for all Rents, security deposits, and other fees due from Tenants. The Agent shall deposit all collections promptly into the Disbursement Account.
• (c) Maintenance and Repairs: To inspect the Property on a regular basis; to contract for, supervise, and direct ordinary maintenance, janitorial services, landscaping, and routine repairs; and to engage third-party contractors and vendors, provided that any single repair or maintenance expenditure exceeding [Dollar Amount] ($[0.00]) shall require the prior written approval of the Owner, except in cases of emergency where immediate action is required to prevent injury to persons or structural damage to the Property.
• (d) Compliance with Law: To take all necessary steps to ensure that the Property complies with all Applicable Law, including housing codes, building codes, and environmental regulations. The Agent is authorized to sign and file notices required by local regulatory bodies on behalf of the Owner.
• (e) Accounting and Reporting: To maintain accurate, itemized books of account regarding all financial transactions pertaining to the Property. The Agent shall deliver to the Owner a monthly statement of receipts and disbursements, accompanied by copies of paid invoices, on or before the [Day] day of each calendar month following the reporting period.

3.2. Management Compensation.

• (a) Management Fee: In consideration of the services rendered by the Agent, the Owner shall pay to the Agent a monthly Management Fee equal to [Percentage]% of the Gross Receipts collected during each calendar month, or a flat fee of [Dollar Amount] ($[0.00]), whichever is greater.
• (b) Leasing Commissions: For each new Lease Agreement executed, the Owner shall pay the Agent a leasing commission equal to [Percentage]% of the first month’s rent or [Dollar Amount] ($[0.00]). For lease renewals, the Owner shall pay a renewal fee of [Dollar Amount] ($[0.00]).
• (c) Deduction of Fees: The Agent is expressly authorized to deduct its Management Fee, leasing commissions, and approved Property Expenses directly from the Gross Receipts deposited in the Disbursement Account prior to remitting the net proceeds to the Owner.

3.3. Owner’s Obligations and Representations.

• (a) Operating Reserve: The Owner shall fund and maintain the Operating Reserve with the Agent within five (5) business days of the Effective Date. If the Operating Reserve is depleted due to operational deficits, the Owner shall replenish it within ten (10) business days following receipt of written notice from the Agent.
• (b) Insurance Coverage: The Owner shall procure and maintain, at its sole cost and expense, comprehensive general liability insurance in an amount not less than [Dollar Amount] ($[0.00]) per occurrence, naming the Agent as an additional insured. The Owner shall also maintain property hazard and casualty insurance. Certificates of insurance shall be delivered to the Agent upon execution of this Agreement.
• (c) Legal Compliance of Property: The Owner represents and warrants that the Property is structurally sound, free from hazardous materials (including asbestos, lead paint, and mold), and fully compliant with all building, zoning, and safety codes. The Owner agrees to indemnify and hold harmless the Agent from any pre-existing environmental or structural liabilities.

3.4. Financial Administration. All funds collected by the Agent on behalf of the Owner, including Rents and security deposits, shall be deposited into a dedicated custodial trust account held in a federally insured financial institution, separate from the Agent’s corporate operating accounts, in compliance with applicable state real estate licensing laws. Security deposits shall be held in designated escrow accounts and returned or forfeited strictly in accordance with Applicable Law.

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SECTION 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:

• (a) The failure of either Party to pay any monetary sum due under this Agreement within ten (10) business days following receipt of written notice demanding such payment.
• (b) The failure of either Party to perform, keep, or fulfill any non-monetary covenant, term, or condition of this Agreement within thirty (30) business days after receipt of written notice specifying the nature of the default.
• (c) The filing of a petition in bankruptcy or insolvency by or against a Party, the appointment of a receiver for all or substantially all of a Party's assets, or the execution of an assignment for the benefit of creditors.
• (d) The suspension, revocation, or expiration of the Agent’s real estate broker license required for the performance of this Agreement.

4.2. Termination for Cause. If an Event of Default occurs, the non-defaulting Party may terminate this Agreement immediately upon delivering written notice of termination to the defaulting Party, subject to any applicable cure periods set forth in Section 4.1.

4.3. Termination Without Cause. The Owner or the Agent may terminate this Agreement without cause at any time by providing at least sixty (60) days prior written notice to the other Party. Termination without cause shall not relieve the Owner of the obligation to pay any Management Fees or expenses incurred prior to the effective date of termination.

4.4. Post-Termination Obligations. Upon the effective date of termination of this Agreement:

• (a) The Agent shall deliver to the Owner all funds held in the Disbursement Account, less any outstanding fees, commissions, and valid expenses owed to the Agent.
• (b) The Agent shall transfer to the Owner all original Lease Agreements, keys, tenant files, access codes, and books of account pertaining to the Property.
• (c) The Owner shall assume all outstanding contracts and vendor agreements entered into by the Agent on behalf of the Owner in good faith pursuant to this Agreement, and shall indemnify the Agent for any ongoing liabilities arising therefrom.

4.5. Remedies Cumulative. All remedies provided in this Agreement are cumulative and shall be in addition to any other rights or remedies available to the Parties under Applicable Law or in equity.

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SECTION 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 shall remain in full force and effect.

5.2. Entire Agreement. This Agreement, together with any exhibits or addenda attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior oral or written agreements, understandings, negotiations, and representations between the Parties.

5.3. Force Majeure. Neither Party shall be liable for any failure to perform its obligations under this Agreement if such failure results from a Force Majeure Event, provided that the affected Party uses reasonable efforts to mitigate the effects of such event and resumes performance promptly upon the cessation thereof.

5.4. Governing Law and Venue. This Agreement shall be governed by, construed, and enforced in accordance with the substantive laws of the State of [State], without regard to its conflict of laws principles. Any legal action, proceeding, or arbitration arising out of this Agreement shall be brought exclusively in the state or federal courts located in [County] County, [State], and the Parties hereby consent to the personal jurisdiction of such courts.

5.5. Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, including its formation, interpretation, breach, or termination, shall be resolved through mandatory binding arbitration administered by the [Arbitration Association, e.g., American Arbitration Association] in accordance with its commercial arbitration rules. The place of arbitration shall be [City, State], and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The prevailing party in any such arbitration or litigation shall be entitled to recover its reasonable attorney's fees and costs.

5.6. Amendments and Waivers. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument executed by authorized representatives of both Parties. No failure or delay by either Party in exercising any right hereunder shall operate as a waiver thereof.

5.7. Notices. All notices, demands, or other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given: (a) upon personal delivery; (b) on the third business day following deposit in the United States mail, certified or registered, postage prepaid, return receipt requested; or (c) on the next business day following deposit with a nationally recognized overnight courier service, addressed to the respective Parties at the addresses set forth in the preamble (or to such other address as a Party may designate by notice pursuant to this Section).

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SECTION 6: FORMAL EXECUTION BLOCK

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

THE OWNER:

[Owner Entity Name]

By: _____________________________________
Name: [Signatory Name]
Title: [Signatory Title]
Date: ___________________________________

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THE AGENT:

[Manager Entity Name]

By: _____________________________________
Name: [Signatory Name]
Title: [Signatory Title]
Date: ___________________________________