Residential Property Management Contract Template

RESIDENTIAL PROPERTY MANAGEMENT CONTRACT TEMPLATE

THIS RESIDENTIAL 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/Entity Legal Name], having a principal place of residence or business located at [Owner Address] (hereinafter referred to as the "Owner"), and

THE AGENT: [Management Company Legal Name], a [State of Incorporation/Organization] [Corporation/LLC], having its principal place of business located at [Agent Address] (hereinafter referred to as the "Agent").

RECITALS

WHEREAS, the Owner is the fee simple owner of certain residential real property described in Section 1.3 herein (the "Property"); and

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

WHEREAS, the Parties intend this Agreement to constitute a binding legal relationship governed by the laws of the State of [Jurisdiction];

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

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SECTION 1. OPERATIONAL DEFINITIONS

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

1.1. "Affiliate" means any legal entity directly or indirectly controlling, controlled by, or under common control with the Agent, including subsidiaries and parent entities.

1.2. "Applicable Law" means all federal, state, county, and municipal statutes, codes, acts, ordinances, orders, rules, regulations, and decrees of any governmental or quasi-governmental authority having jurisdiction over the Property or the activities contemplated under this Agreement.

1.3. "Assigned Property" or "Property" means the single-family residential dwelling/multi-family residential complex located at [Street Address, City, State, Zip Code], including all appurtenances, fixtures, grounds, and personal property listed in the inventory attached hereto as Exhibit A.

1.4. "Default" means the failure of either Party to perform, observe, or comply with any material covenant, agreement, obligation, term, or condition contained within this Agreement after the expiration of any applicable cure period.

1.5. "Gross Receipts" means all monies, rents, issues, profits, and revenues collected from the operation of the Property, including tenant rents, late fees, parking fees, laundry income, utility reimbursements, and forfeited security deposits (where permitted by Applicable Law), excluding capital contributions or insurance proceeds.

1.6. "Maintenance Reserve Fund" means the minimum operating capital fund established by the Owner pursuant to Section 3.6 to be held in trust by the Agent for the payment of routine operational expenses and emergency repairs.

1.7. "Net Proceeds" means the Gross Receipts remaining after the deduction of operating expenses, management fees, debt service (if managed by Agent), and authorized reserves.

1.8. "Operating Expenses" means all reasonable and necessary costs and expenses incurred by the Agent in the management, operation, maintenance, and repair of the Property pursuant to the terms of this Agreement.

1.9. "Tenant" means any individual or entity occupying any portion of the Property pursuant to a valid written lease agreement executed by the Agent or the Owner.

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SECTION 2. APPOINTMENT, TERM, AND SCOPE OF AUTHORITY

2.1. Appointment and Acceptance. The Owner hereby grants to the Agent the exclusive right and sole authority to rent, lease, operate, manage, and maintain the Property, and the Agent hereby accepts such appointment, subject to the terms and conditions set forth herein.

2.2. Term. The initial term of this Agreement shall commence on the Effective Date and shall continue for a period of [Number, e.g., twelve (12)] months, expiring on [End Date] (the "Initial Term"). Upon the 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) days prior to the expiration of the then-current term.

2.3. Scope of Agency. The Agent is authorized to act as the Owner’s legal agent with respect to the leasing, management, and operation of the Property. The Agent's authority includes executing leases, collecting rents, instituting legal proceedings for eviction or collection, hiring and supervising maintenance personnel, and procuring necessary vendor services, all in accordance with the standards set forth in this Agreement.

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SECTION 3. SUBSTANTIVE TERMS AND OBLIGATIONS

3.1. Agent’s Obligations and Duties.

• (a) Marketing and Leasing: The Agent shall use commercially reasonable efforts to market the Property, list the Property for rent, advertise vacancies, screen prospective tenants (including credit, criminal background, and employment verification checks), and negotiate and execute lease agreements on behalf of the Owner in compliance with Applicable Law, including the Fair Housing Act.
• (b) Rent Collection: The Agent shall demand, collect, and receipt all rents and other charges due from Tenants. All monies collected shall be deposited into a designated, segregated trust account maintained by the Agent in accordance with state real estate commission regulations.
• (c) Maintenance and Repairs: The Agent shall maintain the Property in a habitable condition consistent with Applicable Law. The Agent is authorized to purchase supplies, contract for routine maintenance, and make emergency repairs up to the sum of $[Dollar Amount, e.g., 500.00] per occurrence without prior Owner approval. For non-emergency repairs exceeding this threshold, the Agent shall obtain the Owner's prior written consent, except in cases where the Agent reasonably determines that a failure to act would result in injury to persons, severe damage to the Property, or violation of Applicable Law.
• (d) Accounting and Reporting: The Agent shall maintain complete and accurate books of account regarding the operation of the Property. The Agent shall remit to the Owner Net Proceeds, accompanied by a detailed monthly statement of income and expenses, on or before the [Day, e.g., fifteenth (15th)] day of each calendar month following the reporting period.

3.2. Owner’s Obligations and Representations.

• (a) Representations and Warranties: The Owner represents and warrants that they are the sole owner of record of the Property with full legal capacity and authority to execute this Agreement and encumber or lease the Property. The Owner warrants that the Property is free from any structural defects, environmental hazards, or code violations that would render it uninhabitable or non-compliant with Applicable Law.
• (b) Provision of Legal Documents: The Owner shall provide the Agent with all existing leases, warranties, insurance policies, keys, security codes, and any documentation concerning homeowners' associations or condominium bylaws affecting the Property.
• (c) Legal and Financial Compliance: The Owner shall maintain comprehensive general liability insurance naming the Agent as an additional insured, in an amount not less than $[Dollar Amount, e.g., 1,000,000.00] per occurrence.

3.3. Management Compensation and Fees.

• (a) Management Fee: The Owner shall pay to the Agent a monthly management fee equal to [Percentage, e.g., eight percent (8%)] of the Gross Receipts collected during that calendar month, or a flat fee of $[Dollar Amount], whichever is greater.
• (b) Leasing / Placement Fee: For each new tenant procured and placed by the Agent, the Owner shall pay a leasing fee equal to [Percentage, e.g., one hundred percent (100%)] of one month's rent.
• (c) Renewal Fee: Upon the renewal or extension of any lease agreement with an existing Tenant, the Owner shall pay a lease renewal fee of $[Dollar Amount] or [Percentage]% of the renewed term's value.

3.4. Indemnification.

• (a) By Owner: The Owner agrees to indemnify, defend, and hold harmless the Agent, its officers, directors, employees, agents, and Affiliates from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorney's fees) arising out of or related to the management, leasing, or condition of the Property, bodily injury, property damage, or the Owner’s breach of any representation or warranty under this Agreement, except to the extent caused by the gross negligence or willful misconduct of the Agent.
• (b) By Agent: The Agent agrees to indemnify, defend, and hold harmless the Owner from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorney's fees) arising out of the gross negligence, willful misconduct, or ultra vires acts of the Agent outside the scope of its authority under this Agreement.

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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 Default under this Agreement:

• (a) The failure of either Party to pay any monetary sum due under this Agreement within ten (10) days of receiving written notice that such sum is past due;
• (b) The failure of either Party to observe, perform, or comply with any non-monetary material covenant, term, or condition of this Agreement;
• (c) The filing of a petition in bankruptcy or insolvency by or against either Party, the appointment of a receiver for all or substantially all of a Party's assets, or an assignment for the benefit of creditors.

4.2. Notice and Cure Periods. In the event of any Default under this Agreement, the non-defaulting Party shall provide written notice to the defaulting Party specifying the exact nature of the Default. The defaulting Party shall have thirty (30) business days from the receipt of such notice to cure said Default (the "Cure Period"); provided, however, that if the Default is non-monetary and cannot reasonably be cured within thirty (30) business days through the exercise of due diligence, the defaulting Party shall not be in Default if they commence the cure within the thirty (30) business day period and diligently prosecute the same to completion.

4.3. Termination for Cause. If a Default is not cured within the applicable Cure Period set forth in Section 4.2, the non-defaulting Party may terminate this Agreement immediately upon written notice to the defaulting Party, without prejudice to any other legal or equitable rights or remedies available under Applicable Law.

4.4. Termination Without Cause. Either Party 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, commissions, or operational expenses accrued up to the effective date of termination.

4.5. Post-Termination Obligations. Upon the expiration or termination of this Agreement:

• (a) The Agent shall deliver to the Owner all funds held in trust for the Owner (after deducting outstanding fees, costs, and authorized reserves) within thirty (30) days of termination.
• (b) The Agent shall transfer all tenant security deposits, accounting records, keys, and executed leases to the Owner or the Owner's designated successor agent.
• (c) The Owner shall assume all outstanding contracts, vendor agreements, and leasing commitments lawfully entered into by the Agent on behalf of the Owner prior to termination.

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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 or arbitrator 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 and shall not be affected thereby.

5.2. Entire Agreement. This Agreement, together with any exhibits or attachments expressly incorporated herein, constitutes the entire agreement between the Owner and the Agent pertaining to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written. 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.

5.3. Force Majeure. Neither Party shall be held liable or deemed in Default for any failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by, resulting from, or connected with acts of God, extreme weather events, fires, floods, earthquakes, pandemics, epidemics, acts of war, terrorism, civil unrest, labor strikes, utility failures, or any other catastrophic event beyond the reasonable control of the affected Party (a "Force Majeure Event"). The time for performance shall be extended for a period equal to the duration of the Force Majeure Event.

5.4. Governing Law and Venue. This Agreement shall be construed, interpreted, and governed by the laws of the State of [Jurisdiction], without regard to its conflict of laws principles. Any legal action, proceeding, or alternative dispute resolution arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located within [County Name] County, [Jurisdiction], and the Parties hereby irrevocably consent to the personal jurisdiction and venue of such courts.

5.5. Dispute Resolution / Arbitration. Any claim, controversy, or dispute arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation, or validity thereof, shall be settled by binding arbitration administered by the [Name of Arbitration Provider, e.g., American Arbitration Association] 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, costs, and expert witness fees from the non-prevailing party.

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SECTION 6. FORMAL EXECUTION BLOCK

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

OWNER:

[Owner/Entity Legal Name]

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

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AGENT:

[Management Company Legal Name]

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