Property Management Contract Sample Philippines

PROPERTY MANAGEMENT CONTRACT SAMPLE PHILIPPINES

1. Document Preamble & Recitals

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 CLIENT: [Client/Property Owner Name], [legal form, e.g., an individual / a corporation duly organized and existing under the laws of the Republic of the Philippines], with principal place of residence or business address at [Owner Complete Address], represented herein by [Representative Name, if applicable], hereinafter referred to as the "OWNER";

-and-

THE MANAGER: [Management Agency/Company Name], [legal form, e.g., a corporation duly organized and existing under the laws of the Republic of the Philippines], with principal office address at [Manager Complete Address], represented herein by its [Title, e.g., President / General Manager], [Representative Name], hereinafter referred to as the "PROPERTY MANAGER".

WITNESSETH:

WHEREAS, the OWNER is the registered and beneficial owner of certain real property located at [Complete Property Address in the Philippines] (the "Subject Property");

WHEREAS, the OWNER desires to retain the PROPERTY MANAGER to exclusively manage, operate, maintain, and lease the Subject Property, and the PROPERTY MANAGER desires to accept such appointment under the terms and conditions set forth herein;

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

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2. Operational Definitions

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

1. "Applicable Laws" means all laws, statutes, constitutions, decrees, regulations, ordinances, by-laws, judicial precedents, or administrative rulings of the Republic of the Philippines, including local government unit (LGU) ordinances and Bureau of Internal Revenue (BIR) regulations, applicable to the Subject Property and the performance of this Agreement.
2. "Disbursement Account" means the designated bank account established by the PROPERTY MANAGER for the deposit of gross revenues and the settlement of operating expenses related to the Subject Property.
3. "Effective Date" has the meaning ascribed to it in the preamble of this Agreement.
4. "Force Majeure" means any event beyond the reasonable control of a Party, including acts of God, natural disasters (such as typhoons, earthquakes, volcanic eruptions), epidemics, pandemics, civil unrest, war, strikes, or governmental restrictions, which prevent performance of obligations hereunder.
5. "Gross Revenues" means all monies, rents, issues, profits, and income collected from tenants, licensees, or occupants of the Subject Property, excluding security deposits held in trust.
6. "Management Fee" means the compensation payable to the PROPERTY MANAGER as defined in Section 3.4 of this Agreement.
7. "Operating Expenses" means all reasonable and necessary expenses incurred by the PROPERTY MANAGER in the operation, maintenance, repair, and administration of the Subject Property, explicitly excluding capital expenditures requiring prior OWNER approval.
8. "Subject Property" means the real property, inclusive of all permanent improvements, fixtures, and appurtenances situated at [Complete Property Address in the Philippines].

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3. Substantive Terms & Obligations

3.1 Appointment and Exclusivity

The OWNER hereby appoints the PROPERTY MANAGER as the exclusive manager of the Subject Property, and the PROPERTY MANAGER hereby accepts such appointment, with the authority to operate, maintain, lease, and supervise the Subject Property in accordance with the terms of this Agreement.

3.2 Term of Agreement

This Agreement shall commence on the Effective Date and shall remain in full force and effect for a period of [Number, e.g., one (1)] year(s) (the "Initial Term"), unless terminated earlier in accordance with Section 4. Upon expiration of the Initial Term, this Agreement shall automatically renew on a month-to-month basis under the same terms and conditions, unless either Party provides written notice of non-renewal at least sixty (60) calendar days prior to the expiration of the Initial Term.

3.3 Duties and Powers of the Property Manager

The PROPERTY MANAGER shall perform the following duties with professional diligence and fiduciary care:

1. Tenant Acquisition and Leasing: Market the Subject Property, screen prospective tenants (including background, credit, and employment verification), negotiate and execute lease agreements in the name of or as agent for the OWNER, and collect security deposits and advance rentals in compliance with Philippine law and BIR regulations.
2. Rent Collection and Financial Administration: Collect all Gross Revenues, issue official receipts (ORs) or acknowledgment receipts compliant with Philippine tax laws, deposit all collections into the Disbursement Account, and pay authorized Operating Expenses.
3. Maintenance and Repairs: Supervise ordinary maintenance, routine upkeep, and necessary repairs of the Subject Property. The PROPERTY MANAGER is authorized to incur expenses for emergency repairs up to the amount of [Philippine Peso Amount, e.g., PHP 50,000.00] per incident without prior OWNER consent, provided the OWNER is notified within forty-eight (48) hours.
4. Compliance and Reporting: Ensure compliance with national and local government regulations, including Barangay clearances, fire safety certificates, and real property tax monitoring (though actual payment of real property taxes remains the direct obligation of the OWNER unless funds are specifically advanced).
5. Accounting: Provide the OWNER with monthly financial statements, including income statements, expense vouchers, and bank reconciliation reports, on or before the [Day, e.g., 15th] day of the succeeding month.

3.4 Management Fee and Compensation

1. In consideration for the services rendered, the OWNER shall pay the PROPERTY MANAGER a Management Fee equal to [Percentage, e.g., eight percent (8%)] of the gross monthly collections derived from the Subject Property.
2. The PROPERTY MANAGER is authorized to deduct the Management Fee directly from the Gross Revenues collected prior to remitting the net proceeds to the OWNER on or before the [Day, e.g., 20th] day of each month.
3. Any value-added tax (VAT), withholding tax, or other governmental impositions applicable to the Management Fee shall be for the account of the PROPERTY MANAGER, or as otherwise mandated by the Bureau of Internal Revenue (BIR).

3.5 Representations and Warranties

1. OWNER Representations: The OWNER represents and warrants that:
   • They possess legal title to or lawful authority over the Subject Property with full capacity to execute this Agreement.
   • The Subject Property complies with all current structural, environmental, and safety codes under Applicable Laws.
   • No encumbrances, litigation, or administrative actions pending or threatened would impair the performance of this Agreement.
2. PROPERTY MANAGER Representations: The PROPERTY MANAGER represents and warrants that:
   • It is duly registered to conduct business in the Philippines and possesses all necessary licenses, permits, and professional qualifications required by law.
   • It shall perform its duties in strict compliance with Applicable Laws and the ethical standards of its profession.

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4. Default, Termination, and Remedies

4.1 Events of Default

The occurrence of any of the following shall constitute an "Event of Default" under this Agreement:

1. Failure of the OWNER to pay any undisputed fee, reimbursement, or compensation due to the PROPERTY MANAGER within fifteen (15) calendar days following receipt of written demand.
2. Failure of the PROPERTY MANAGER to remit net collections to the OWNER or maintain the Disbursement Account in accordance with this Agreement.
3. Breach by either Party of any material representation, warranty, or covenant contained herein.
4. Insolvency, bankruptcy, or commencement of corporate rehabilitation or liquidation proceedings against either Party.

4.2 Notice and Cure Period

In the event of a default, the non-defaulting Party shall provide the defaulting Party with written notice specifying the exact nature of the default. The defaulting Party shall have thirty (30) business days from receipt of such notice to cure the default (the "Cure Period").

4.3 Termination Rights

1. Termination for Cause: If the defaulting Party fails to cure the default within the thirty (30) business day Cure Period, the non-defaulting Party may terminate this Agreement immediately upon written notice, without prejudice to any other legal remedies available.
2. Termination for Convenience: Either Party may terminate this Agreement without cause by providing at least sixty (60) calendar days prior written notice to the other Party.

4.4 Post-Termination Obligations

Upon termination of this Agreement for any reason:

1. The PROPERTY MANAGER shall deliver to the OWNER all keys, access cards, tenant files, accounting records, unexpended funds, and original lease agreements pertaining to the Subject Property within ten (10) business days.
2. The PROPERTY MANAGER shall render a final accounting statement and remit any remaining balance in the Disbursement Account to the OWNER, less any outstanding fees or authorized expenses.
3. The OWNER shall honor all legitimate lease commissions or commitments entered into by the PROPERTY MANAGER with third parties prior to the effective date of termination.

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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 or administrative body 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.

5.2 Entire Agreement

This Agreement constitutes the entire understanding between the OWNER and the PROPERTY MANAGER with respect to the subject matter hereof and supersedes all prior discussions, negotiations, representations, or agreements, whether oral or written.

5.3 Force Majeure

Neither Party shall be liable for any failure or delay in performance under this Agreement (other than the obligation to pay money) if such failure or delay is caused by an event of Force Majeure. The affected Party shall notify the other Party in writing within seven (7) calendar days of the occurrence of the Force Majeure event and shall use commercially reasonable efforts to resume performance as soon as practicable.

5.4 Governing Law and Venue

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the Republic of the Philippines. Any legal action, suit, or proceeding arising out of or relating to this Agreement shall be brought exclusively before the proper courts of [City/Municipality, e.g., Makati City], to the exclusion of all other courts.

5.5 Dispute Resolution and Arbitration

In the event of any dispute, controversy, or claim arising out of or relating to this Agreement, the Parties shall first use their best efforts to settle such dispute amicably through good-faith negotiations within thirty (30) calendar days from receipt of written notice of dispute by one Party from the other. If the dispute cannot be resolved amicably, it shall be submitted to final and binding arbitration in accordance with the Philippine Dispute Resolution Center, Inc. (PDRCI) Arbitration Rules in force at the time of commencement. The place of arbitration shall be [City, Philippines], and the proceedings shall be conducted in the English language.

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6. Formal Execution Block

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

THE OWNER:

[Client/Property Owner Entity Name or Individual Name]

By:

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[Signatory Name]
[Signatory Title, e.g., Owner / Authorized Attorney-in-Fact]
Date: [Date of Execution]

THE PROPERTY MANAGER:

[Management Agency/Company Name]

By:

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[Signatory Name]
[Signatory Title, e.g., President / General Manager]
Date: [Date of Execution]

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ACKNOWLEDGMENT

(Notary Public Execution Block)

REPUBLIC OF THE PHILIPPINES)
CITY/MUNICIPALITY OF ___________) S.S.

BEFORE ME, a Notary Public for and in the city/municipality aforesaid, personally appeared the following persons with their competent evidence of identity:

Known to me and to me known to be the same persons who executed the foregoing Property Management Contract, consisting of [Number] pages, including this page where the Acknowledgment is written, and acknowledged to me that the same is their free and voluntary act and deed as well as that of the entities they respectively represent.

WITNESS MY HAND AND SEAL this [Day] day of [Month], [Year] at [Location], Philippines.

Doc. No. _______;
Page No. _______;
Book No. ___;
Series of 20.