Property Management Contract Template Word

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 a principal place of business at [Owner Address] (hereinafter referred to as the "Owner"), and

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

RECITALS:

WHEREAS, Owner is the lawful fee simple owner or legally authorized lessee of certain real property located at [Property Street Address, City, State, Zip], more particularly described in Exhibit A attached hereto (hereinafter the "Subject Property"); and

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

WHEREAS, Agent possesses the requisite commercial expertise, licenses, and operational capacity to perform such property management services in accordance with the laws of the jurisdiction where the Subject Property is situated.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and undertakings set forth herein, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby mutually 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, and such definitions shall apply equally to the singular and plural forms of the terms defined:

1. "Affiliate" means any legal entity directly or indirectly controlling, controlled by, or under common control with Agent, where "control" means the ownership of more than fifty percent (50%) of the voting securities or equity interest of such entity.
2. "Applicable Law" means all federal, state, county, and municipal statutes, codes, ordinances, regulations, rules, orders, and judicial decrees applicable to the leasing, operation, maintenance, and use of the Subject Property.
3. "Base Fee" means the primary monthly compensation payable to Agent for standard management services, calculated as [Numeric Percentage]% of the gross monthly collections derived from the Subject Property, or a flat fee of [Dollar Amount], whichever is greater.
4. "Disbursement Account" means the segregated, FDIC-insured trust account established by Agent pursuant to Section 3.4 for the deposit and handling of all Owner funds, rents, and security deposits.
5. "Gross Collections" means all monies actually collected from tenants, lessees, or occupants of the Subject Property in the form of rent, parking fees, laundry revenue, storage fees, and utility reimbursements, excluding security deposits until such deposits are legally forfeited or applied as rent.
6. "Maintenance Threshold" means the maximum financial expenditure of [Dollar Amount] per single occurrence that Agent is authorized to disburse for ordinary repairs and maintenance without obtaining prior written or electronic consent from Owner, excepting Emergency Repairs.
7. "Emergency Repairs" means any capital or operational expenditure immediately necessary to preserve or protect the Subject Property from imminent structural damage, or to prevent immediate risk of personal injury to tenants, invitees, or the general public.
8. "Operating Reserve" means the initial and ongoing minimum cash balance of [Dollar Amount] to be maintained by Owner in the Disbursement Account to fund day-to-day operational liabilities and working capital requirements.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Appointment and Exclusivity

Owner hereby grants to Agent the exclusive right, power, and authority to rent, lease, operate, and manage the Subject Property during the Term of this Agreement. Agent accepts such appointment and agrees to use its commercially reasonable efforts, skill, judgment, and diligence in the management and operation of the Subject Property.

3.2 Agent Powers and Duties

Subject to the limitations set forth herein, Agent shall have the following operational powers and duties:

1. Marketing and Leasing: Market the Subject Property for lease; list vacant units; advertise via standard commercial channels; screen, evaluate, and vet prospective tenants through credit checks, criminal background checks, employment verification, and rental history audits; and negotiate, execute, renew, and terminate residential or commercial leases on behalf of Owner in compliance with Applicable Law.
2. Rent Collection: Demand, collect, receive, and issue receipts for all rents, fees, charges, and income generated by the Subject Property. All monies collected shall be deposited immediately into the Disbursement Account.
3. Tenant Relations: Serve as the primary point of contact for all tenant communications, handle routine complaints, enforce lease covenants, issue statutory notices of default, and institute eviction proceedings or legal collections actions through legal counsel approved by Owner.
4. Maintenance and Repairs: Supervise the cleaning, maintenance, painting, decorating, plumbing, carpentry, groundskeeping, and such other routine and extraordinary maintenance and repair work as may be necessary to maintain the Subject Property in a clean, safe, and habitable condition consistent with institutional property standards. Agent may engage independent contractors, vendors, and service providers for such purposes, provided that such third parties maintain adequate commercial general liability insurance.

3.3 Financial Management and Reporting

1. Accounting System: Agent shall maintain complete, accurate, and separate books of account regarding all financial transactions pertaining to the Subject Property utilizing standard accounting software.
2. Monthly Statements: On or before the [Day] day of each calendar month, Agent shall deliver to Owner a comprehensive accounting report detailing Gross Collections, itemized operating expenses, disbursements, maintenance logs, and the current balance of the Disbursement Account, accompanied by net proceeds remitted via electronic funds transfer (ACH) to Owner's designated bank account.
3. Tax Preparation Support: Agent shall cooperate with Owner's certified public accountants and tax professionals by providing annual summary reports (such as Form 1099 tracking data and general ledger summaries) necessary for the preparation of Owner’s federal, state, and local income tax returns.

3.4 Trust Accounts and Security Deposits

Agent shall establish and maintain one or more designated trust accounts for the deposit of Owner funds, segregated from Agent’s corporate operating accounts, in compliance with the real estate licensing and trust account laws of [Jurisdiction]. Security deposits collected from tenants shall be held in dedicated escrow accounts in strict accordance with statutory interest-bearing or non-interest-bearing requirements.

3.5 Owner Representations and Responsibilities

1. Legal Authority: Owner represents and warrants that it holds unencumbered legal title to the Subject Property or possesses the legal authority to execute this Agreement, and that the execution and performance of this Agreement does not violate any superior mortgage, deed of trust, covenant, or contract.
2. Compliance with Laws: Owner warrants that the Subject Property, its structural components, and its current use fully comply with all Applicable Law, including environmental, zoning, building codes, and the Americans with Disabilities Act (ADA), where applicable.
3. Insurance Maintenance: Owner shall, at its sole cost and expense, maintain throughout the Term comprehensive general liability insurance in an amount not less than [Dollar Amount] per occurrence, property damage insurance, and umbrella liability coverage, naming Agent as an additional insured. Owner shall deliver certificates of insurance to Agent upon execution of this Agreement.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Term

This Agreement shall commence on the Effective Date and shall continue for an initial term of [Number] ([#]) years (the "Initial Term"). Following the expiration of the Initial Term, this Agreement shall automatically renew on a month-to-month basis unless either Party provides written notice of non-renewal at least sixty (60) calendar days prior to the expiration of the then-current term.

4.2 Termination for Cause

Either Party may terminate this Agreement immediately upon written notice if the other Party:

1. Commits a material breach of any substantive term, covenant, or condition of this Agreement and fails to cure such breach within thirty (30) business days following receipt of written notice detailing the specific default;
2. Files for bankruptcy, becomes insolvent, makes an assignment for the benefit of creditors, or has a receiver appointed for its assets; or
3. Loses, has suspended, or has revoked any professional real estate license or corporate charter required by Applicable Law to perform its obligations under this Agreement.

4.3 Termination Without Cause

Owner may terminate this Agreement without cause at any time upon providing sixty (60) calendar days' prior written notice to Agent, subject to the payment of an early termination fee equal to [Dollar Amount] or three (3) months' average Base Fee, whichever is greater, payable concurrently with the delivery of the termination notice.

4.4 Obligations Upon Termination

Upon the effective date of termination of this Agreement:

1. Final Accounting: Agent shall deliver to Owner a complete final accounting statement of all funds collected and disbursed within thirty (30) calendar days.
2. Fund Transfer: Agent shall transfer all balances remaining in the Disbursement Account (less verified outstanding operational expenses and unpaid management fees) and all security deposit escrow accounts to Owner or Owner's designated successor management agent.
3. Record Handover: Agent shall deliver all active tenant leases, keys, access codes, vendor contracts, operational records, and historical files pertaining to the Subject Property to 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, together with any exhibits or schedules explicitly incorporated herein by reference, constitutes the entire agreement between Owner and Agent pertaining to the subject matter hereof, and supersedes all prior oral or written negotiations, representations, understandings, or agreements between the Parties.

5.3 Force Majeure

Neither Party shall be held liable for any failure or delay in fulfilling or performing operational terms hereunder when such failure arises from acts of God, flood, fire, earthquake, explosion, war, terrorism, invasion, global pandemic, civil unrest, labor strikes, utility failures, or governmental restrictions beyond the reasonable control of the affected Party, provided that the affected Party gives prompt written notice to the other Party and uses diligent efforts to resume performance as soon as commercially practicable.

5.4 Governing Law and Venue

This Agreement, and all claims or causes of action arising out of or relating to it, 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. The Parties consent to the exclusive jurisdiction of the state and federal courts located within [County] County, [Jurisdiction], for the resolution of any legal proceedings.

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 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 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 litigation shall be entitled to recover its reasonable attorney's fees, expert witness costs, and administrative filing fees from the non-prevailing party.

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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 duly authorized officers, agents, or representatives as of the Effective Date first written above.

OWNER:

[Owner/Entity Name]

By: _____________________________________________
Name: [Authorized Signatory Name]
Title: [Signatory Title, e.g., Managing Member]
Date: [Date of Execution]

AGENT:

[Management Company/Entity Name]

By: _____________________________________________
Name: [Authorized Signatory Name]
Title: [Signatory Title, e.g., Chief Executive Officer]
Date: [Date of Execution]