Property Management Contract Template Pdf

PROPERTY MANAGEMENT CONTRACT TEMPLATE

1. DOCUMENT PREAMBLE & RECITALS

THIS PROPERTY MANAGEMENT CONTRACT (hereinafter referred to as the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (hereinafter the "Effective Date"), by and between:

OWNER: [Owner/Entity Name], having its principal place of residence or registered office at [Owner Address] (hereinafter referred to as the "Owner", which expression shall where the context so admits include its successors and permitted assigns), of the first part;

AND

MANAGER: [Management Company Name], a [State/Country of Incorporation] [Corporation/LLC/Partnership], having its principal place of business at [Manager Address] (hereinafter referred to as the "Manager", which expression shall where the context so admits include its successors and permitted assigns), of the second part.

RECITALS

WHEREAS, the Owner is the absolute legal and equitable owner of certain real property located at [Property Street Address, City, State, Zip], more particularly described in Schedule A attached hereto (hereinafter the "Property");

WHEREAS, the Owner desires to retain the Manager to provide professional property management, leasing, operational, and maintenance services for the Property, and the Manager represents that it possesses the requisite expertise, licenses, staff, and organizational capability to perform such services; and

WHEREAS, the parties intend for this Agreement to constitute a binding legal obligation setting forth the complete terms and conditions of their commercial relationship.

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 mutually acknowledged, the parties covenant and agree as follows:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms shall have the meanings assigned to them below:

1. "Applicable Law" means all federal, state, county, and municipal statutes, codes, ordinances, regulations, administrative rulings, and judicial decrees having jurisdiction over the Property, the Owner, or the Manager.
2. "Operating Account" means the segregated, dedicated bank account established by the Manager in the name of the Owner (or the Manager as agent for the Owner) into which all Gross Receipts are deposited and from which authorized Operating Expenses are disbursed.
3. "Operating Expenses" means all reasonable, necessary, and documented costs and expenses incurred by the Manager in the ordinary course of operating, maintaining, repairing, and servicing the Property pursuant to the approved Annual Budget.
4. "Gross Receipts" means all monies, revenues, rents, security deposits (to the extent forfeited or applied pursuant to Lease terms), parking fees, laundry income, and other income collected from the operation of the Property.
5. "Lease" means any residential, commercial, or mixed-use lease, sublease, or license agreement executed by the Manager or Owner for the occupancy of any space within the Property.
6. "Management Fee" means the compensation payable to the Manager for its services rendered hereunder, calculated as set forth in Section 3.
7. "Emergency" means any sudden, unexpected occurrence or condition at the Property that poses an immediate, catastrophic threat to human life, safety, structural integrity, or the continuous provision of essential utilities.
8. "Annual Budget" means the comprehensive financial projection of anticipated Gross Receipts and Operating Expenses for a given calendar or fiscal year, prepared by the Manager and approved in writing by the Owner.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Appointment and Exclusivity

The Owner hereby grants to the Manager the exclusive right, power, and authority to lease, manage, operate, and maintain the Property, and the Manager hereby accepts such appointment, subject to the terms and conditions set forth herein. The Manager shall act as the sole and exclusive leasing and managing agent for the Property during the Term.

3.2 Duties of the Manager

The Manager shall perform its duties with professional diligence, skill, and care in accordance with industry standards. Specific duties include:

1. Tenant Acquisition and Retention: Market the Property, advertise vacancies, screen prospective tenants through credit, criminal, and employment verification, negotiate and execute Leases, renewals, and modifications in accordance with Owner-approved criteria.
2. Rent Collection: Demand, collect, and receipt all Gross Receipts, rents, and other charges due under Leases, and take commercially reasonable steps, including the institution of legal proceedings in the name of the Owner, to enforce Lease covenants and collect delinquent accounts.
3. Maintenance and Repairs: Supervise the maintenance, repair, and upkeep of the Property; contract for and supervise third-party vendors for janitorial, landscaping, security, plumbing, electrical, and structural maintenance; and ensure compliance with all habitability and safety standards.
4. Financial Recordkeeping: Maintain accurate, complete books and accounts of all financial transactions arising from the operation of the Property using standard accounting software, accessible to the Owner upon reasonable notice.

3.3 Operating Account & Funds Management

1. The Manager shall establish a separate, insured bank account (the Operating Account) with a financial institution insured by the FDIC. Under no circumstances shall Manager commingle Owner funds with Manager's corporate operational funds.
2. The Manager is authorized to pay all legitimate Operating Expenses, debt service (if authorized in writing), taxes, and utility costs from the Operating Account.
3. Security deposits collected from tenants shall be maintained in a separate, dedicated escrow/trust account in strict compliance with Applicable Law governing security deposit retention and interest accrual.

3.4 Compensation and Management Fees

1. In consideration for the services rendered under this Agreement, the Owner shall pay to the Manager a Management Fee equal to [Percentage, e.g., 8]% of the monthly Gross Receipts collected from the Property.
2. In addition to the standard Management Fee, the Manager shall be entitled to a Leasing Commission equal to [Dollar Amount or Percentage] for each newly executed Lease, and [Dollar Amount or Percentage] for each Lease renewal.
3. All compensation due to the Manager shall be automatically deducted from the Operating Account on a monthly basis concurrently with the issuance of the monthly financial statement.

3.5 Representations and Warranties

1. Owner Representations: The Owner warrants that it holds fee simple absolute title to the Property, has full legal capacity and authority to execute this Agreement, and that the Property is free from any encumbrances that would materially impair the performance of this Agreement.
2. Manager Representations: The Manager warrants that it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation, holds all requisite real estate broker and operational licenses required by Applicable Law, and maintains professional liability and commercial general liability insurance as required under Section 3.6.

3.6 Insurance and Indemnification

1. The Manager shall maintain, at its sole cost and expense, Commercial General Liability Insurance with limits of not less than [Dollar Amount, e.g., $1,000,000] per occurrence and [Dollar Amount, e.g., $2,000,000] aggregate, Workers’ Compensation insurance as required by Applicable Law, and Errors & Omissions / Professional Liability insurance. The Owner shall be named as an additional insured on the Commercial General Liability policy.
2. Indemnification: The Manager shall indemnify, defend, and hold harmless the Owner, its directors, officers, employees, and agents from and against any and all claims, liabilities, losses, damages, costs, or expenses (including reasonable attorneys' fees) arising out of the gross negligence, willful misconduct, fraud, or material breach of this Agreement by the Manager.
3. The Owner shall indemnify, defend, and hold harmless the Manager from and against any and all claims, liabilities, losses, damages, costs, or expenses arising out of environmental contamination existing prior to the Effective Date, pre-existing structural defects, or actions taken by the Manager at the express written direction of the Owner.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Breach Classifications

A default under this Agreement shall occur if either party:

1. Fails to pay any monetary sum due under this Agreement within ten (10) calendar days of receiving written demand;
2. Fails to perform or observe any material non-monetary covenant, condition, or obligation contained herein;
3. Becomes insolvent, makes an assignment for the benefit of creditors, files a petition in bankruptcy, or has an involuntary bankruptcy petition filed against it which is not dismissed within sixty (60) days.

4.2 Notice and Cure Periods

Except as otherwise provided herein, if a party commits a material default, the non-defaulting party shall provide written notice specifying the exact nature of the default. The defaulting party shall have a period of thirty (30) business days from the date of receipt of such notice to cure said default (the "Cure Period"). If the default is capable of cure but cannot reasonably be cured within thirty (30) business days using diligent efforts, the Cure Period shall be extended for an additional reasonable timeframe, provided the defaulting party commences and diligently pursues curative action.

4.3 Termination Rights

1. Termination for Cause: If a defaulting party fails to cure a material default within the designated Cure Period, the non-defaulting party may immediately terminate this Agreement by providing written notice of termination, effective upon receipt.
2. Termination Without Cause: The Owner or the Manager may terminate this Agreement without cause upon providing [Number, e.g., 60] days prior written notice to the other party.
3. Post-Termination Obligations: Upon termination of this Agreement for any reason, the Manager shall within fourteen (14) business days:
   • Deliver to the Owner all keys, access codes, books, records, accounting files, and tenant files relating to the Property.
   • Transfer all remaining balances in the Operating Account (less verified reserves for outstanding, approved obligations) to an account designated by the Owner.
   • Execute all necessary assignments of vendor contracts and Leases as requested by the Owner.

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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 arbitrator of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable. If modification is impossible, the offending provision shall be excised, and the remaining provisions of this Agreement shall remain in full force and effect.

5.2 Entire Agreement

This Agreement, including any attached Schedules and Exhibits, constitutes the entire agreement between the Owner and the Manager with respect to the subject matter hereof, and supersedes all prior oral or written negotiations, understandings, representations, and agreements. This Agreement may only be amended, modified, or supplemented by a written instrument duly executed by authorized representatives of both parties.

5.3 Force Majeure

Neither party shall be held liable for any failure, delay, or default in performing its obligations under this Agreement (excluding the obligation to pay money) if such failure arises from acts of God, war, terrorism, civil unrest, natural disasters, epidemics, pandemics, government restrictions, utility blackouts, or other extraordinary events beyond the reasonable control of the affected party, provided the affected party gives prompt written notice to the other party and uses commercially reasonable efforts to mitigate the impact of the event.

5.4 Governing Law and Jurisdiction

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

5.5 Dispute Resolution

Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof, 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], and the proceedings shall be conducted by a single neutral arbitrator. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party in any such dispute shall be entitled to recover its reasonable attorneys' fees, expert witness costs, and administrative arbitration fees.

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6. FORMAL EXECUTION BLOCK

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

OWNER:

[Owner Entity Name]

By: _________________________________________
Name: [Signatory Name]
Title: [Signatory Title]
Date: [Date]

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MANAGER:

[Management Company Name]

By: _________________________________________
Name: [Signatory Name]
Title: [Signatory Title]
Date: [Date]