Property Management Contract Template

PROPERTY MANAGEMENT CONTRACT TEMPLATE FREE

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:

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

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

RECITALS

WHEREAS, Owner is the lawful owner or authorized lessee of the real property described in Exhibit A attached hereto (the "Property"); and

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

NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions 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. "Affiliate" means any legal entity directly or indirectly controlling, controlled by, or under common control with Agent.
2. "Available Unit" means any residential, commercial, or industrial space within the Property that is not currently subject to an active, executed Lease Agreement.
3. "Default Rate" means the lesser of eighteen percent (18%) per annum or the maximum rate permitted by applicable law in the jurisdiction where the Property is located.
4. "Gross Receipts" means all monies, rents, revenues, and income of any kind derived directly or indirectly from the operation, leasing, and occupancy of the Property, excluding security deposits (until forfeited or applied pursuant to a Lease), utility reimbursements collected on behalf of third-party providers, and condemnation awards or insurance proceeds.
5. "Lease" or "Lease Agreement" means any formal written agreement executed by Agent on behalf of Owner (or executed directly by Owner) granting a third party the right to occupy space within the Property.
6. "Maintenance Reserve Fund" means the minimum operating balance of [Dollar Amount] to be maintained by Owner in the Designated Operating Account for emergency and routine repairs.
7. "Operating Expenses" means all reasonable and necessary costs incurred by Agent in the execution of its duties hereunder, including maintenance, utilities, payroll for on-site personnel, marketing, and vendor fees, but excluding Agent’s corporate overhead.
8. "Property" means the real property and all improvements thereon located at [Property Street Address, City, State, Zip], as more fully described in Exhibit A.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Appointment and Exclusivity

Owner hereby appoints Agent as its sole and exclusive managing agent for the Property. Owner grants to Agent the full power and authority to exercise all operational controls necessary for the leasing, maintenance, and day-to-day management of the Property, subject strictly to the limitations set forth in this Agreement.

3.2 Leasing and Tenant Relations

1. Marketing and Advertising: Agent shall actively market Available Units using commercially reasonable methods, including online listings, signage, and direct outreach.
2. Screening and Selection: Agent shall screen prospective tenants through credit checks, criminal background checks, income verification, and rental history reviews in strict compliance with federal, state, and local fair housing laws.
3. Execution of Leases: Agent is authorized to negotiate, execute, renew, modify, and terminate Leases on behalf of Owner. All Leases shall be executed on standard lease forms approved by Owner's legal counsel.

3.3 Rent Collection and Financial Administration

1. Collection of Funds: Agent shall use commercially reasonable efforts to collect all rent, fees, and other charges due from tenants under Leases. All collections shall be deposited into a dedicated custodial trust account (the "Operating Account") separate from Agent’s corporate funds.
2. Disbursements: From the Gross Receipts collected, Agent is authorized to pay Operating Expenses, including maintenance costs, vendor invoices, utility bills, and the Management Fee set forth in Section 3.4.
3. Owner Distributions: On or before the [Day, e.g., 15th] day of each calendar month, Agent shall remit to Owner the net proceeds of the preceding month, accompanied by a detailed, itemized monthly accounting statement.

3.4 Management Compensation

1. Management Fee: Owner shall pay Agent a monthly management fee equal to [Percentage, e.g., 6%] of the monthly Gross Receipts actually collected from the Property, or a flat fee of [Dollar Amount], whichever is greater.
2. Leasing Commissions: For each new Lease executed, Owner shall pay Agent a leasing commission equal to [Percentage, e.g., 50%] of one (1) month’s rent, or [Dollar Amount]. For Lease renewals, Owner shall pay Agent a renewal fee of [Dollar Amount].
3. Additional Services: Major capital improvements, property renovations, or eviction proceedings managed beyond the scope of standard operations shall be billed at an hourly rate of [Hourly Rate], subject to Owner’s prior written approval.

3.5 Maintenance, Repairs, and Capital Expenditures

1. Routine Maintenance: Agent is authorized to contract for routine cleaning, painting, decorating, plumbing, carpentry, and general maintenance necessary to preserve the Property in its current condition, provided that individual work orders do not exceed [Dollar Amount] without prior Owner consent.
2. Emergency Repairs: In the event of an emergency posing an immediate threat to life, safety, or structural integrity of the Property, Agent is authorized to incur any expense deemed reasonably necessary, regardless of cost limit, and shall notify Owner within twenty-four (24) hours thereafter.

3.6 Owner Representations and Warranties

Owner represents and warrants that:

1. Owner holds good, marketable, and legal title to the Property, with full power and authority to execute this Agreement and encumber or lease the Property.
2. The Property complies with all applicable local, state, and federal zoning codes, environmental regulations, building codes, and accessibility standards (including the Americans with Disabilities Act and Fair Housing Act).
3. Owner shall maintain comprehensive general liability insurance in an amount not less than [Dollar Amount, e.g., $1,000,000] per occurrence, naming Agent as an additional insured.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Termination for Convenience

Either Party may terminate this Agreement without cause upon providing at least thirty (30) business days' prior written notice to the other Party.

4.2 Termination for Cause (Breach)

1. Events of Default: A Party shall be in default under this Agreement if it:
   • Fails to pay any monetary sum due under this Agreement within ten (10) business days of receiving written notice of non-payment;
   • Materially breaches any non-monetary covenant, duty, or representation contained herein; or
   • Files for bankruptcy, enters receivership, or becomes insolvent.
2. Cure Period: The non-defaulting Party shall provide written notice detailing the alleged breach. The defaulting Party shall have thirty (30) business days from the receipt of such notice to cure the default. If the default cannot reasonably be cured within thirty (30) business days, the defaulting Party must initiate substantial curative actions within such period and diligently pursue completion.

4.3 Remedies Upon Default

Upon the occurrence of an uncured Event of Default:

1. The non-defaulting Party may terminate this Agreement immediately upon written notice.
2. Owner shall pay Agent all accrued management fees, leasing commissions, and unreimbursed Operating Expenses up to the effective date of termination.
3. Agent shall immediately deliver to Owner all keys, tenant files, accounting records, unexpended operating funds, and security deposits held on behalf of Owner.
4. The non-defaulting Party reserves all other rights and remedies available at law or in equity, including injunctive relief and damages.

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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. If modification is not possible, the provision shall be deemed severed, and the remaining provisions shall continue in full force and effect.

5.2 Entire Agreement

This Agreement, including any attached exhibits, constitutes the final, complete, and exclusive statement of the agreement between the Parties pertaining to the management of the Property and supersedes all prior or contemporaneous oral or written negotiations, understandings, proposals, and agreements.

5.3 Force Majeure

Neither Party shall be liable for any failure to perform its obligations under this Agreement if such failure stems from acts of God, war, terrorism, civil unrest, epidemics, pandemics, government restrictions, electrical grid failures, fires, floods, or other natural disasters beyond the reasonable control of the affected Party, provided that the affected Party uses diligent 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 substantive laws of the State of [Jurisdiction], 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 (Arbitration)

Any claim, dispute, or controversy arising out of or relating to this Agreement, including its breach, termination, or validity, shall be settled by binding arbitration administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules. The place of arbitration shall be [City, State]. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The prevailing party in any such arbitration or court proceeding 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 executed in writing and signed by authorized representatives of both Parties. No failure or delay by either Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof.

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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 officers as of the Effective Date first written above.

OWNER:

[Owner Entity Name]

By: _____________________________________________
Name: [Signatory Name]
Title: [Signatory Title, e.g., Managing Member / Owner]
Date: [Date]

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AGENT:

[Management Company Name]

By: _____________________________________________
Name: [Signatory Name]
Title: [Signatory Title, e.g., Vice President / Broker]
Date: [Date]